HB248 Alabama 2026 Session

Summary

Primary Sponsor

David FaulknerRepresentative

Republican

Session

2026 Regular Session

Title

Alabama Business and Nonprofit Entities Code; revisions made to clarify procedures, make technical corrections, and codify common law

Summary

HB248 updates Alabama's Business and Nonprofit Entities Code to clarify procedures, codify common law, and add new rules on corporate opportunities and records access.

What This Bill Does

It revises multiple code sections to clarify internal affairs, codify common-law principles, and provide a new process to correct or nullify filing instruments. It creates Division G with Section 10A-2A-8.70 to govern corporate opportunities and the duties around disclosing or disclaiming a business opportunity. It adds nonprofit-specific provisions (Sections 10A-3A-6.14, 10A-3A-8.61, and 10A-3A-8.62) addressing conflicts of interest and corporate opportunities for membership and nonmembership nonprofits. It updates rights to inspect and copy records for stockholders, members, and dissociated parties, and establishes expedited court review for noncompliance; it also tightens rules for foreign entity withdrawals and requires physical office presence for registered agents.

Who It Affects

• Stockholders and members (and dissociated members) of corporations and nonprofit corporations, who gain clarified and expanded rights to inspect records and protections around corporate opportunities.
• Directors, officers, and qualified directors of corporations and nonprofits, who face new corporate-opportunity duties, conflict-of-interest rules, and potential safe harbors.
• Domestic and foreign entities (corporations, nonprofits, LLCs, and partnerships) operating in Alabama, who face updated filing, withdrawal, and governance provisions.
• Registered agents and filing officers (Secretary of State), who must enforce the new physical-office requirement and updated filing-correction processes.

Key Provisions

• Adds Division G corporate opportunities (10A-2A-8.70) establishing disclosure and disclaimer procedures for directors and officers when a corporate opportunity arises.
• Creates nonprofit-specific governing rules (10A-3A-6.14; 10A-3A-8.61; 10A-3A-8.62) to manage conflicts of interest and corporate opportunities for membership and nonmembership nonprofits.
• Allows a new process to correct or nullify filing instruments via certificates of correction or nullification (Sections 10A-1-4.21, 10A-1-4.23, 10A-1-4.24, 10A-1-4.25).
• Reconciles and moves financial-statement-related provisions into updated records-access sections (10A-2A-16.02-04 and 10A-3A-4.02-04) while repealing 10A-2A-16.10 and 10A-3A-4.20.
• Requires registered agents to have a physical Alabama office (no virtual office) and updates related to foreign entity withdrawal (including notice and service provisions).
• Establishes expedited court review for records requests and clarifies allocation of disputed records among involved parties.
• Sets effective date of August 1, 2026.

AI-generated summary using openai/gpt-5-nano-2025-08-07 on Apr 2, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Businesses & Financial Institutions