HB200 Alabama 2025 Session

Updated Feb 22, 2026

Notable

Summary

Primary Sponsor: Cynthia Lee AlmondAlabama Public Service Commission
Republican
Session: 2025 Regular Session
Title: Alabama Business and Nonprofit Entity Code revised; makes technical changes and corrects references, and codifies practices relating to electronic filing and name reservations
Summary: HB200 updates Alabama's business and nonprofit entity laws to modernize filings, clarify merger and conversion rules, and simplify ownership transfers upon death or disqualification.
What This Bill Does
It makes technical corrections, codifies electronic filing and name reservation practices, and establishes the doctrine of independent legal significance. It clarifies and standardizes how merger, conversion, and stock exchange documents are approved, authorized, and named, including ratification for documents that were not properly approved. It also provides a simplified buyout process for the death or disqualification of a stockholder or member in professional entities, allowing transfer of transferable interests with protections for creditors and charging orders. Additionally, it sets out valuation procedures and timelines for buyouts when prices are not fixed by governing documents, and it outlines creditor rights in these processes.

Who It Affects
Owners and managers of Alabama-based professional corporations, limited liability companies, and partnerships (including general and limited partnerships) whose ownership interests may transfer or be bought out upon death or disqualification.
Creditors and state filing authorities (including the Secretary of State) involved in name reservations, electronic filings, and the administration of mergers, conversions, and related documents to protect creditor rights and ensure proper filings.

Key Provisions
Codifies independent legal significance across the Alabama Business and Nonprofit Entity Code.
Creates technical corrections and codifies practices for electronic filing and name reservations.
Clarifies and standardizes approval, authorization, and naming of merger, conversion, and stock exchange documents, including a ratification process for previously approved documents.
Clarifies termination fees and other consequences in merger agreements.
Provides a simplified purchase/buyout process for death or disqualification of stockholders or members in professional entities (professional corporations, LLCs, and partnerships), with transfer of transferable interests subject to charging orders and creditors' rights.
Establishes valuation procedures (including balance sheets and income statements) and timelines for completing transfers when price is not fixed by governing documents.
Protects creditor rights by allowing charging orders and by detailing court processes for resolving disputes over fair value.

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