HB209 Alabama 2022 Session

Summary

Primary Sponsor

Tim WadsworthRepresentative

Republican

Session

Regular Session 2022

Title

Corporations, stock, issuance in fractional shores reg., issuance of scrip in bearer form prohibited, Sec. 10A-2A-6.04 am'd.

Summary

HB209 would change how Alabama corporations issue fractional shares by banning bearer-form scrip and requiring registration of fractional-scrip, with rules for uncertificated scrip notices.

What This Bill Does

If enacted, the bill would prohibit issuing scrip in bearer form and require all fractional-scrip to be registered. It allows fractions to be paid in cash or issued as certificated or uncertificated scrip that can be exchanged for a full share, subject to conditions. It requires scrip certificates to be labeled and meet notice requirements, and sets that stockholder rights accrue only if the scrip provides them. It also lets boards set conditions on scrip, including voiding it if not exchanged by a deadline and directing proceeds to scripholders if stock is sold.

Who It Affects

• Alabama corporations that issue fractional shares, which must stop using bearer-form scrip and ensure any fractional-scrip is registered and properly labeled
• Investors or shareholders who hold fractional shares or scrip, whose rights depend on the terms of the scrip and who may receive notices and potential proceeds under certain conditions

Key Provisions

• Prohibits issuing scrip in bearer form and requires registration of all issued fractional-scrip
• Allows fractional shares to be issued as certificated or uncertificated scrip that enables exchange for a full share, with bearer-scrip prohibited
• Requires each scrip certificate to be labeled 'scrip' and to include information required by law; mandates notice provisions for uncertificated scrip issued or transferred without a certificate
• Holders of fractional stock may exercise shareholder rights only if the scrip provides those rights
• Authorizes the board to impose conditions on scrip, such as voiding the scrip if not exchanged by a set date and directing stock sales proceeds to scripholders

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Corporations