SB245 Alabama 2023 Session

Summary

Primary Sponsor

Sam GivhanSenator

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

SB245 updates Alabama nonprofit law by creating Chapter 3A to align with Model Nonprofit Corporation Act 2021 and Delaware law, modernizing governance, records, dissolution, merger, and conversion rules across the code.

What This Bill Does

Adds Chapter 3A to Title 10A establishing the Alabama Nonprofit Corporation Law and revising numerous existing sections to reflect Model Act standards. It reorganizes governance around membership, voting groups, notices, and records, and strengthens member rights to inspect records and receive financial statements. It updates duties and liability rules for directors and officers, including indemnification and conflict-of-interest rules. It provides a full framework for dissolutions, mergers, and conversions involving nonprofits and other entities, with required approvals and formal filings.

Who It Affects

• Members of nonprofit corporations (membership nonprofits) gain enhanced rights to participate in governance, inspect records, receive financial statements, and have voice in major actions such as dissolution, merger, and conversion.
• Directors and officers of nonprofit corporations (and related entities) are subject to new duties, liability standards, indemnification rules, conflict-of-interest safeguards, and formal processes for approvals, resignations, and removals.

Key Provisions

• Adopts the Model Nonprofit Corporation Act 2021 standards via Chapter 3A, reorganizing Alabama's nonprofit law with updated definitions, governance, and filing rules.
• Creates a comprehensive framework for nonprofit corporate actions (dissolutions, mergers, conversions) that requires specific approvals, detailed notice and record-access requirements, and formal filings to align with national standards.

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