SB104 Alabama 2022 Session

Summary

Primary Sponsor

Sam GivhanSenator

Republican

Co-Sponsor

Rodger Smitherman

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

SB104 updates Alabama law on fractional stock by clarifying how fractions are issued and transferred and banning bearer-form scrip certificates.

What This Bill Does

It allows fractions to be issued as cash, scrip, or through other arrangements. Scrip certificates must be labeled and may not be issued in bearer form, with required notice after issuance or transfer. Fractional-share holders receive voting, dividend, and dissolution rights only if the scrip documents grant them. The board may set conditions on scrip, such as voiding it if not exchanged for full shares or directing the sale of stock with proceeds paid to scripholders; the act becomes law three months after passage and governor approval.

Who It Affects

• Shareholders who hold fractional shares or scrip, as their rights and benefits depend on the terms of the scrip and whether it grants those rights.
• Corporations issuing fractional shares and their boards, who must label scrip certificates, avoid bearer-form scrip, follow notice requirements, and may impose conditions on scrip (e.g., void dates, sales provisions).

Key Provisions

• Amends Section 10A-2A-6.04 to revise how corporations issue or transfer fractional stock, allowing cash payment, issuance of scrip, or other dispositions.
• Scrip certificates must be conspicuously labeled 'scrip' and cannot be issued in bearer form; notice requirements apply after issuance or transfer of scrip without a certificate.
• Holders of fractional shares have stock rights (vote, dividends, dissolution distributions) only if the scrip provides those rights.
• The board may authorize scrip with conditions, including voiding it if not exchanged for full stock by a date and directing that the underlying stock sale proceeds go to the scripholders.
• The act becomes effective on the first day of the third month after passage and governor approval.

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