HB267 Alabama 2023 Session

Summary

Primary Sponsor

Tim WadsworthRepresentative

Republican

Session

Regular Session 2023

Title

Relating to the Alabama Business and Nonprofit Entity Code; to add Chapter 3A to Title 10A, Code of Alabama 1975, by revising the Alabama Nonprofit Corporation Law to reflect the national standards set by the Model Nonprofit Corporation Act of 2021 and the Delaware General Corporation Law; and to make conforming changes throughout the Alabama Business and Nonprofit Entity Code in order to effectuate the changes to the Alabama Nonprofit Corporation Law and conform with the other entities governed by the Alabama Business and Nonprofit Entity Code by amending Sections 10A-1-1.03, 10A-1-1.08, 10A-1-3.32, 10A-1-8.01, 10A-1-8.02, 10A-1-9.01, 10A-2A-1.40, 10A-2A-1.43, 10A-2A-1.51, 10A-2A-2.02, 10A-2A-2.06, 10A-2A-7.04, 10A-2A-7.20, 10A-2A-7.32, 10A-2A-8.10, 10A-2A-8.21, 10A-2A-8.22, 10A-2A-8.24, 10A-2A-10.06, 10A-2A-10.07, 10A-2A-10.08, 10A-2A-11.02, 10A-2A-11.06, 10A-2A-12.02, and 10A-2A-14.13, Code of Alabama 1975; adding Sections 10A-2A-10.00 and 10A-2A-10.10 to the Code of Alabama 1975; and amending Sections 10A-5A-2.03, 10A-5A-10.07, 10A-8A-9.08, 10A-9A-2.02, and 10A-9A-10.08, Code of Alabama 1975.

Summary

HB267 overhauls Alabama's nonprofit law by creating Chapter 3A to align with the Model Nonprofit Corporation Act (2021) and Delaware General Corporation Law, updating governance, records, mergers, conversions, and dissolution for Alabama nonprofits.

What This Bill Does

Creates the Alabama Nonprofit Corporation Law as Chapter 3A of Title 10A and revises broad nonprofit rules to mirror Model Act 2021 and related entity laws. Establishes new definitions and governance structures for nonprofit entities, including membership and nonmembership nonprofits, voting groups, and director/officer roles, with enhanced recordkeeping and inspection rights. Expands and clarifies processes for notices (including electronic), meetings (including remote participation), and financial reporting, and it lays out detailed rules for mergers, conversions, restatements, and dissolutions, plus transitional provisions that phase the new framework in through 2025.

Who It Affects

• Nonprofit corporations in Alabama (both membership and nonmembership) and their members, directors, and officers, who would be subject to new governance rules, voting structures, and fiduciary duties.
• Foreign nonprofit corporations operating in Alabama and the Alabama Secretary of State, which would handle filings, notices, and cross-border provisions related to mergers, conversions, restatements, and dissolution.

Key Provisions

• Adds Chapter 3A (Alabama Nonprofit Corporation Law) to Title 10A and revises provisions to reflect Model Nonprofit Corporation Act 2021 and Delaware General Corporation Law, with conforming changes across the Alabama Business and Nonprofit Entity Code.
• Defines core terms (certificate of incorporation, bylaws, board, member, private organizational documents, etc.) and distinguishes between membership and nonmembership nonprofits, including voting groups and transfer rules.
• Imposes and clarifies duties and standards for directors and officers, including fiduciary duties, indemnification, advancement of expenses, conflicts of interest, and related party rules.
• Expands rights of members to access information: inspection of records, annual financial statements, and lists of members; permits remote participation in meetings and establishes confidentiality protections around disclosures.
• Outlines comprehensive procedures for mergers, including required approvals by stockholders or members (as applicable), notices, plan details, and effects on assets, liabilities, and continuity of rights; requires filing statements of merger and allows for post-merger amendments.
• Outlines procedures for conversions and restatements of certificates of incorporation, including approvals, plan terms, and effects on organizational documents and ownership interests; provides for restated certificates to consolidate amendments.
• Provides for voluntary and judicial dissolution, wind-up, handling of known claims, and distribution of assets, with specifics on claim deadlines and court processes; includes provisions for revocation and reinstatement of dissolutions.
• Adds transitional provisions to govern the phased implementation: starting 2024 for new or electing nonprofits, with full applicability to existing nonprofits by 2025.
• Introduces parallel provisions across related chapters to ensure consistency with other entity types and enables electronic notices and signatures to align with broader state and federal frameworks.

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