SB187 Alabama 2026 Session

Summary

Primary Sponsor

Sam GivhanSenator

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

SB187 updates Alabama's Business and Nonprofit Entities Code to clarify governance, codify common law, and modernize filing, records, proxy, and corporate-opportunity rules.

What This Bill Does

SB187 revises the Alabama Business and Nonprofit Entities Code to include technical corrections and codify common law, clarifying internal affairs and entity governance. It adds a new procedure to correct or nullify filing instruments, and requires registered agents to have a physical office rather than operate virtually. It rewrites and consolidates stockholder and member access to financial information, expands records-access rights with expedited court review, and tightens rules around conflicts of interest and corporate opportunities for directors, officers, and controlling persons. It also updates foreign entity withdrawals, forum selection, and proxy provisions in bylaws.

Who It Affects

• Stockholders and members of Alabama domestic and foreign corporations and nonprofit entities, who gain expanded rights to inspect records and obtain financial information on demand and who face updated confidentiality rules.
• Directors, officers, controlling stockholders, and board committees of these entities, who face clarified duties, new safe harbors for conflicts of interest and corporate opportunities, and procedural changes governing related-party transactions and record-keeping.

Key Provisions

• Codifies internal affairs doctrine and common-law concepts to clarify how domestic entities are governed.
• Establishes a Corporate Opportunities Division for for-profit and nonprofit entities, with rules on conflicts of interest, required disclosures, approvals, and safe harbors.
• Revises related-party/conflicting-interest transaction rules, including quorum, approval standards, and remedies.
• Repeals former financial-statement disclosure requirements and consolidates stockholder/member access to financial information into updated sections (stockholders: 16.02-16.04; members: 4.02-4.04).
• Creates new procedures to correct or nullify filing instruments (certificates of correction/nullification) with expedited court review and defined effective dates.
• Requires registered agents to maintain a physical office in Alabama and prohibits purely virtual operation.
• Details the withdrawal process for foreign entities, including service of process provisions and tax/administrative requirements.
• Clarifies proxy matters and forum-selection provisions in bylaws for both business and nonprofit corporations.
• Provides expedited court review for records requests and allows allocation of disputes among parties to the review.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Businesses & Financial Institutions