HB 267 — 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.

Page 19 HB267 Enrolled (b) The person executing the filing instrument shall sign it and state beneath or opposite the person's signature the person's name and the capacity in which the filing instrument is signed.

(ii) a determination or action by any person or body, including the nonprofit corporation or any other party to a Page 20 HB267 Engrossed plan or filing instrument;

Page 20 HB267 Enrolled (4) The following provisions of a plan or filing instrument may not be made dependent on facts outside the plan or filed document:

(5) If a provision of a filing instrument is made dependent on a fact ascertainable outside of the filing instrument, and that fact is neither ascertainable by reference to a source described in subsection (c)(2)(i) or a document that is a matter of public record, nor have the affected members, if any, and if none, the affected directors, received notice of the fact from the nonprofit corporation, then the nonprofit corporation shall deliver to the Secretary Page 21 HB267 Engrossed of State for filing a certificate of amendment to the filing instrument setting forth the fact promptly after the time when the fact referred to is first ascertainable or thereafter changes.

A certificate of amendment under this subsection is deemed to be authorized by the authorization of the original filing instrument to which it relates and may be filed by the Page 21 HB267 Enrolled nonprofit corporation without further action by the board of directors or the members.

and Page 22 HB267 Engrossed (5) other facts of record in the office of the Secretary of State that are specified by the person requesting the certificate.

(b) The Secretary of State, upon request and payment of the requisite fee, shall furnish to any person a certificate of registration for a foreign nonprofit corporation if the Page 22 HB267 Enrolled writings filed in the office of the Secretary of State show that the Secretary of State has filed an application for registration for authority to transact business in this state and the registration has not been revoked, withdrawn, or terminated.

(c) Subject to any qualification stated in the certificate, a certificate of existence or certificate of registration issued by the Secretary of State is conclusive evidence that the nonprofit corporation is in existence or the foreign nonprofit corporation is authorized to transact Page 23 HB267 Engrossed business in this state.

(1) "CORPORATE ACTION" means any action taken by or on behalf of the nonprofit corporation, including any action Page 23 HB267 Enrolled taken by the incorporator, the board of directors, a committee of the board of directors, an officer or agent of the nonprofit corporation, or the members, if any.

(i) membership interests of a class in excess of the Page 24 HB267 Engrossed number, if any, of membership interests of a class the nonprofit corporation has the power to issue under its certificate of incorporation or bylaws at the time of issuance;

or (ii) membership interests of any class that is not then authorized for issuance by the certificate of incorporation or Page 24 HB267 Enrolled bylaws.

and (ii) the time at which any certificate of validation Page 25 HB267 Engrossed filed in accordance with Section 10A-3A-1.26 becomes effective.

Page 25 HB267 Enrolled §10A-3A-1.21.

or (2) the effectiveness of any other corporate action under this article ratifying the authorization, designation, Page 26 HB267 Engrossed or creation of a membership interest.

(a) To ratify a defective corporate action under this section (other than the ratification of an election of the initial board of directors under subsection (b)), the board of Page 26 HB267 Enrolled directors shall take action ratifying the action in accordance with Section 10A-3A-1.23, stating:

(2) the earlier of the date on which those persons first took the action or were purported to have been elected Page 27 HB267 Engrossed as the initial board of directors;

(c) If any provision of this chapter, the certificate of incorporation or bylaws, any corporate resolution, or any plan or agreement to which a membership nonprofit corporation Page 27 HB267 Enrolled is a party in effect at the time action under subsection (a) is taken requires member approval or would have required member approval at the date of the occurrence of the defective corporate action, the ratification of the defective corporate action approved in the action taken by the directors under subsection (a) shall be submitted to the members for approval in accordance with Section 10A-3A-1.23.

(e) Unless otherwise provided in the action taken by the board of directors under subsection (a), after the action by the board of directors has been taken and, if required, approved in accordance with subsection (c) or subsection (d), the board of directors may abandon the ratification at any Page 28 HB267 Engrossed time before the validation effective time without further action of the members, if any, or the person or group of persons, if any, specified in the certificate of incorporation.

(a) The quorum and voting requirements applicable to a Page 28 HB267 Enrolled ratifying action by the board of directors under Section 10A-3A-1.22(a) shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time the ratifying action is taken.

The notice must state that the purpose, or one of the purposes, of the meeting, is to consider ratification of a defective corporate action and must be accompanied by (i) either a copy of the action taken by the board of directors in accordance with Section 10A-3A-1.22(a) or the information required by Section 10A-3A-1.22(a)(1) through (a)(4), and (ii) a statement that any claim that the Page 29 HB267 Engrossed ratification of the defective corporate action and any putative membership interest issued as a result of the defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within 120 days from the applicable validation effective time.

(c) Except as provided in subsection (d) with respect Page 29 HB267 Enrolled to the voting requirements to ratify the election of a director, the quorum and voting requirements applicable to the approval by the members, if any, and if none, by the directors shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time of the member or director approval.

(f) If the approval under this section of putative membership interests would result in an overissue, in addition to the approval required by Section 10A-3A-1.22, approval of Page 30 HB267 Engrossed an amendment to the certificate of incorporation under Article 9 to increase the number of membership interests of an authorized class or to authorize the creation of a class of membership interests so there would be no overissue shall also be required.

(g) If the ratification of the defective corporate Page 30 HB267 Enrolled action requires approval by a person or group of persons specified in the certificate of incorporation, the directors shall provide that person or group of persons with (i) either a copy of the action taken by the board of directors in accordance with Section 10A-3A-1.22(a) or the information required by Section 10A-3A-1.22(a)(1) through (a)(4), and (ii) a statement that any claim that the ratification of the defective corporate action and any putative membership interest issued as a result of the defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within 120 days from the applicable validation effective time.

and (ii) the date of the defective corporate action ratified, provided that notice shall not be required to be given to holders of a valid and Page 31 HB267 Engrossed putative membership interest whose identities or addresses for notice cannot be determined from the records of the nonprofit corporation.

(i) either a copy of the action taken by the board of directors in accordance with Section 10A-3A-1.22(a) or (b) or Page 31 HB267 Enrolled the information required by Section 10A-3A-1.22(a)(1) through (a)(4) or Section 10A-3A-1.22(b)(1) through (b)(3), as applicable;

(a) Each defective corporate action ratified in accordance with Section 10A-3A-1.22 shall not be void or voidable as a result of the failure of authorization Page 32 HB267 Engrossed identified in the action taken under Section 10A-3A-1.22(a) or (b) and shall be deemed a valid corporate action effective as of the date of the defective corporate action;

(b) The issuance of each putative membership interest purportedly issued pursuant to a defective corporate action identified in the action taken under Section 10A-3A-1.22 shall Page 32 HB267 Enrolled not be void or voidable, and each putative membership interest shall be deemed to be an identical membership interest as of the time it was purportedly issued;

Page 33 HB267 Engrossed (b) The certificate of validation must set forth:

(3) the defective corporate action that is the subject of the certificate of validation (including, in the case of Page 33 HB267 Enrolled any defective corporate action involving the issuance of putative membership interests, the number and type of shares of putative membership interests issued and the date or dates upon which that putative membership interest was purported to have been issued);

(1) if a filing was previously made in respect of the defective corporate action and no changes to that filing are required to give effect to the ratification of that defective Page 34 HB267 Engrossed corporate action in accordance with Section 10A-3A-1.22, the certificate of validation must set forth (i) the name, title, and filing date of the filing previously made and any certificate of correction to that filing, and (ii) a statement that a copy of the filing previously made, together with any certificate of correction to that filing, is attached as an Page 34 HB267 Enrolled exhibit to the certificate of validation;

or (3) if a filing was not previously made in respect of the defective corporate action and the defective corporate action ratified under Section 10A-3A-1.22 would have required a filing under any other section of this chapter, the certificate of validation must set forth (i) a statement that a filing containing all of the information required to be included under the applicable section or sections of this chapter to give effect to that defective corporate action is Page 35 HB267 Engrossed attached as an exhibit to the certificate of validation, and (ii) the date and time that filing is deemed to have become effective.

(a) Upon application by the nonprofit corporation, any Page 35 HB267 Enrolled successor entity to the nonprofit corporation, a director of the nonprofit corporation, any member (if applicable) of the nonprofit corporation, including any member as of the date of the defective corporate action ratified under Section 991 10A-3A-1.22, the person or group of persons (if applicable) specified in the certificate of incorporation, or any other person claiming to be substantially and adversely affected by a ratification under Section 10A-3A-1.22, the designated court, and if none, the circuit court for the county in which the nonprofit corporation's principal office is located in 991 this state, and if none in this state, the circuit court for the county in which the nonprofit corporation's most recent registered office, is located, may:

Page 36 HB267 Engrossed (b) In connection with an action under this section, the court may make findings or orders, and take into account any factors or considerations, regarding any matters as it deems proper under the circumstances.

(c) Service of process of the application under subsection (a) on the nonprofit corporation may be made in any Page 36 HB267 Enrolled manner provided by statute of this state or by rule of the applicable court for service on the nonprofit corporation, and no other party need be joined in order for the court to adjudicate the matter.

(1) Section 10A-3A-2.02(b)(6), is not a director (i) to whom the limitation or elimination of the duty of an officer to offer potential business opportunities to the nonprofit corporation would apply, or (ii) who has a material Page 37 HB267 Engrossed relationship with any other person to whom the limitation or elimination would apply;

(2) Section 10A-3A-8.53 or Section 10A-3A-8.55 (i) is not a party to the proceeding, (ii) is not a director as to whom a transaction is a director's conflicting interest transaction or who sought a disclaimer of the nonprofit Page 37 HB267 Enrolled corporation's interest in a business opportunity under Section 10A-2A-8.60, which transaction or disclaimer is challenged, and (iii) does not have a material relationship with a director described in either clause (i) or clause (ii) of this subsection (a)(2);

and (2) "MATERIAL INTEREST" means an actual or potential Page 38 HB267 Engrossed benefit or detriment (other than one which would devolve on the nonprofit corporation or the members generally) that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken.

(c) The presence of one or more of the following Page 38 HB267 Enrolled circumstances shall not automatically prevent a director from being a qualified director:

(2) the membership nonprofit corporation addresses the notice, report, or statement to those members either as a Page 39 HB267 Engrossed group or to each of those members individually or to the members in a form to which each of those members has consented;

Page 39 HB267 Enrolled (b) A consent described in subsection (a)(2) or (a)(3) shall be revocable by any members who deliver written notice of revocation to the membership nonprofit corporation.

(1) the incorporation and internal affairs of the Page 40 HB267 Engrossed foreign nonprofit corporation;

Page 40 HB267 Enrolled (b) A foreign nonprofit corporation is not precluded from registering to do business in this state because of any difference between the law of the foreign nonprofit corporation's jurisdiction of formation and the law of this state.

Page 41 HB267 Engrossed (3) that the nonprofit corporation is incorporated under this chapter;

or (ii) if the nonprofit corporation will not have Page 41 HB267 Enrolled members, a statement to that effect.

(viii) provisions granting inspection rights to a Page 42 HB267 Engrossed person or group of persons under Section 10A-3A-4.07;

(3) any provision that under this chapter is permitted to be set forth in the certificate of incorporation or Page 42 HB267 Enrolled required or permitted to be set forth in the bylaws;

(6) a provision limiting or eliminating any duty of a director or any other person to offer the nonprofit corporation the right to have or participate in any, or one or Page 43 HB267 Engrossed more classes or categories of, corporate opportunities, before the pursuit or taking of the opportunity by the director or other person;

provided that the application of that provision to an officer or a related person of that officer (i) also requires approval of that application by the board of directors, subsequent to the effective date of the provision, Page 43 HB267 Enrolled by action of the disinterested or qualified directors taken in compliance with the same procedures as are set forth in Section 10A-3A-8.60, and (ii) may be limited by the authorizing action of the board of directors;

(iv) an entity (other than the nonprofit corporation or an entity controlled by the nonprofit corporation) controlled by the individual or any person Page 44 HB267 Engrossed specified above in this definition;

(v) a domestic or foreign (A) business or nonprofit corporation (other than the nonprofit corporation or an entity controlled by the nonprofit corporation) of which the individual is a director, (B) unincorporated entity of which the individual is a general partner or a member of the governing authority, or (C) Page 44 HB267 Enrolled individual, trust or estate for whom or of which the individual is a trustee, guardian, personal representative, or like fiduciary;

Page 45 HB267 Engrossed (1) if initial directors are named in the certificate of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the nonprofit corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting;

or Page 45 HB267 Enrolled (2) if initial directors are not named in the certificate of incorporation, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators:

(c) The bylaws are a part of a binding contract between the nonprofit corporation and (i) the members in a membership Page 46 HB267 Engrossed nonprofit corporation and (ii) the directors in a nonmembership nonprofit corporation, subject to the provisions of this chapter.

(a) Unless the certificate of incorporation provides otherwise, bylaws may be adopted to be effective only in an Page 46 HB267 Enrolled emergency defined in subsection (d).

Page 47 HB267 Engrossed §10A-3A-2.07.

(a) The certificate of incorporation or the bylaws may require that any or all internal corporate claims shall be brought exclusively in any specified court or courts of this state and, if so specified, in any additional courts in this state or in any other jurisdictions with which the nonprofit Page 47 HB267 Enrolled corporation has a reasonable relationship.

(d) "Internal corporate claim" means, for the purposes of this section, (i) any claim that is based upon a violation of a duty under the laws of this state by a current or former Page 48 HB267 Engrossed director, officer, or member in their capacities as such, (ii) any action asserting a claim arising pursuant to any provision of this chapter or the certificate of incorporation or bylaws, or (iii) any action asserting a claim governed by the internal affairs doctrine that is not included in (i) through (ii) above.

Page 48 HB267 Enrolled ARTICLE 3.

(e) Whenever 10 or more wholesale merchants wish to form a nonprofit association, cooperative society, or Page 49 HB267 Engrossed corporation in the sense of paying interest or dividends on stock, but for mutual benefit through the application of cooperation or other economic principles, they may become a body corporate in the manner provided in this chapter.

Unless its certificate of incorporation provides Page 49 HB267 Enrolled otherwise, every nonprofit corporation has perpetual duration and succession in its corporate name and has the same powers as an individual to do all things necessary or convenient to carry out its activities and affairs, including all entity powers provided in Section 10A-1-2.11, Section 10A-1-2.12, and Section 10A-1-2.13.

and (2) one or more officers of the nonprofit corporation present at a meeting of the board of directors may be deemed Page 50 HB267 Engrossed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.

Page 50 HB267 Enrolled (1) binds the nonprofit corporation;

(c) In a proceeding by a member or a director under subsection (b)(1) to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all Page 51 HB267 Engrossed affected persons are parties to the proceeding, and may award damages for loss (other than anticipated profits) suffered by the nonprofit corporation or another party because of enjoining the unauthorized corporate act.

Page 51 HB267 Enrolled §10A-3A-4.01.

(b) A nonprofit corporation shall maintain all annual financial statements prepared for the nonprofit corporation for its last three fiscal years (or such shorter period of Page 52 HB267 Engrossed existence) and any audit or other reports with respect to those financial statements.

(d) A membership nonprofit corporation must maintain a Page 52 HB267 Enrolled record of its current members in alphabetical order by class of membership showing the address for each member to which notices and other communications from the membership nonprofit corporation are to be sent.

Page 53 HB267 Engrossed §10A-3A-4.02.

(a) A member of a membership nonprofit corporation is entitled to inspect and copy, during regular business hours at the membership nonprofit corporation's principal office, any of the records of the membership nonprofit corporation described in Section 10A-3A-4.01(a), excluding minutes of Page 53 HB267 Enrolled meetings of, and records of actions taken without a meeting by, the membership nonprofit corporation's board of directors and board committees established under Section 10A-3A-8.25, if the member gives the membership nonprofit corporation a signed written notice of the member's demand at least five business days before the date on which the member wishes to inspect and copy.

and (3) excerpts from minutes of any meeting of, or records Page 54 HB267 Engrossed of any actions taken without a meeting by, the board of directors and board committees maintained in accordance with Section 10A-3A-4.01(a);

(c) A member may inspect and copy the records described Page 54 HB267 Enrolled in subsection (b) only if:

(d) The membership nonprofit corporation may impose reasonable restrictions and conditions on access to and use of the records to be inspected and copied under subsections (a) and (b), including designating information confidential and imposing nondisclosure and safeguarding, and may further keep confidential from its members and other persons, for a period of time as the membership nonprofit corporation deems reasonable any information that the membership nonprofit corporation reasonably believes to be in the nature of a trade secret or other information the disclosure of which the membership nonprofit corporation in good faith believes is not in the best interest of the membership nonprofit corporation or could damage the membership nonprofit corporation or its activities or affairs, or that the membership nonprofit Page 55 HB267 Engrossed corporation is required by law or by agreement with a third party to keep confidential.

(e) For any meeting of members for which the record Page 55 HB267 Enrolled date for determining members entitled to vote at the meeting is different than the record date for notice of the meeting, any person who becomes a member subsequent to the record date for notice of the meeting and is entitled to vote at the meeting is entitled to obtain from the membership nonprofit corporation upon request the notice and any other information provided by the membership nonprofit corporation to members in connection with the meeting, unless the membership nonprofit corporation has made that information generally available to members by posting it on its website or by other generally recognized means.

or Page 56 HB267 Engrossed (2) the power of a court, independently of this chapter, to compel the production of corporate records for examination and to impose reasonable restrictions as provided in Section 10A-3A-4.04(c), provided that, in the case of production of records described in subsection (b) of this section at the request of the member, the member has met the Page 56 HB267 Enrolled requirements of subsection (c) of this section.

Page 57 HB267 Engrossed (a) If a membership nonprofit corporation does not allow a member who complies with Section 10A-3A-4.02(a) to inspect and copy any records required by that section to be available for inspection, the designated court, and if none, the circuit court for the county in which the membership nonprofit corporation's principal office is located in this Page 57 HB267 Enrolled state, and if none in this state, the circuit court for the county in which the membership nonprofit corporation's most recent registered office is located may summarily order inspection and copying of the records demanded at the membership nonprofit corporation's expense upon application of the member.

(c) If the court orders inspection and copying of the records demanded under Section 10A-3A-4.02(b), it may impose reasonable restrictions on their confidentiality, use or Page 58 HB267 Engrossed distribution by the demanding member and it shall also order the membership nonprofit corporation to pay the member's expenses incurred to obtain the order unless the membership nonprofit corporation establishes that it refused inspection in good faith because the membership nonprofit corporation had:

Page 58 HB267 Enrolled (1) a reasonable basis for doubt about the right of the member to inspect the records demanded;

(b) The designated court, and if none, the circuit court for the county in which the nonprofit corporation's principal office is located in this state, and if none in this state, the circuit court for the county in which the nonprofit corporation's most recent registered office is located may order inspection and copying of the books, records, and documents at the nonprofit corporation's expense, upon application of a director who has been refused inspection rights, unless the nonprofit corporation establishes that the Page 59 HB267 Engrossed director is not entitled to inspection rights.

(c) If an order is issued, the court may include provisions protecting the nonprofit corporation from undue burden or expense, and prohibiting the director from using Page 59 HB267 Enrolled information obtained upon exercise of the inspection rights in a manner that would violate a duty to the nonprofit corporation, and may also order the nonprofit corporation to reimburse the director for the director's expenses incurred in connection with the application.

Page 60 HB267 Engrossed §10A-3A-4.07.

If the certificate of incorporation provides approval rights to a person or group of persons as authorized in Section 10A-3A-2.02(b)(ix), then the certificate of incorporation may grant inspection rights to that person or Page 60 HB267 Enrolled group of persons.

Page 61 HB267 Engrossed (b) A membership nonprofit corporation shall deliver, or make available and provide written notice of availability of, the financial statements required under subsection (a) to the requesting member within five business days of delivery of the written request to the membership nonprofit corporation.

(c) Notwithstanding the provisions of subsections (a) Page 61 HB267 Enrolled and (b) of this section:

(1) The requesting member may apply to the designated court, and if none, the circuit court for the county in which the membership nonprofit corporation's principal office is located in this state, and if none in this state, the circuit court for the county in which the membership nonprofit corporation's most recent registered office is located for an order requiring delivery of or access to the requested Page 62 HB267 Engrossed financial statements.

(3) In the proceeding, if the membership nonprofit Page 62 HB267 Enrolled corporation has declined to deliver or make available the financial statements because the member had been unwilling to agree to restrictions proposed by the membership nonprofit corporation on the confidentiality, use, and distribution of the financial statements, the membership nonprofit corporation shall have the burden of demonstrating that the restrictions proposed by the membership nonprofit corporation were reasonable.

(5) If the court orders delivery or access to the requested financial statements, it shall order the membership nonprofit corporation to pay the member's expenses incurred to obtain the order unless the membership nonprofit corporation establishes that it had refused delivery or access to the requested financial statements because the member had refused to agree to reasonable restrictions on the confidentiality, Page 63 HB267 Engrossed use, or distribution of the financial statements or that the membership nonprofit corporation had reasonably determined that the member's request was not made in good faith or for a proper purpose.

Page 63 HB267 Enrolled §10A-3A-6.01.

(b) Except as otherwise provided in this chapter or in the certificate of incorporation, if the certificate of incorporation of a nonprofit corporation states that the nonprofit corporation will have members, but that nonprofit corporation has in fact no members entitled to vote on a matter, then any provision of this chapter or any other provision of law requiring notice to, the presence of, or the vote, consent, or other action by members of that nonprofit corporation in connection with the matter shall be satisfied by notice to, the presence of, or the vote, consent, or other Page 64 HB267 Engrossed action by the board of directors of the nonprofit corporation.

(c) Except as otherwise provided in the certificate of incorporation, if the certificate of incorporation of a nonprofit corporation states that the nonprofit corporation will not have members, then notice to, the presence of, or the vote, consent, or other action by board of directors of the Page 64 HB267 Enrolled nonprofit corporation in connection with the matter shall be satisfied by notice to, the presence of, or the vote, consent, or other action by the board of directors of the nonprofit corporation.

(d) A person is not a member of a nonmembership nonprofit corporation, regardless of whether the nonmembership Page 65 HB267 Engrossed nonprofit corporation designates or refers to the person as a member.

Unless otherwise provided by law or in the certificate of incorporation or bylaws of a membership nonprofit corporation, the board of directors shall establish conditions Page 65 HB267 Enrolled for admission of members (for such contribution, if any, as the board of directors may determine), admit members, and issue memberships.

Page 66 HB267 Engrossed A member of a nonprofit corporation is not personally liable for any liabilities of the nonprofit corporation (including liabilities arising from acts of the nonprofit corporation).

Page 66 HB267 Enrolled (a) A membership nonprofit corporation may levy dues, assessments, fees, fines, late charges, interest, penalties, and other such sums on its members to the extent authorized in the certificate of incorporation or bylaws.

(c) The certificate of incorporation or bylaws may provide reasonable means to enforce the collection of dues, assessments, fees, fines, late charges, interest, penalties, and other such sums, including, but not limited to, Page 67 HB267 Engrossed termination, suspension, or reinstatement of membership.

(b) The resignation of a member does not relieve the Page 67 HB267 Enrolled member from any obligations incurred or commitments made prior to resignation.

Page 68 HB267 Engrossed If the board of directors does not fix a record date for determining members entitled to a distribution, the record date is the date the board of directors authorizes the distribution.

Page 68 HB267 Enrolled (1) the nonprofit corporation would not be able to pay its debts as they become due in the usual course of its activities and affairs;

(g) This section shall not apply to a contract or transaction with a member, director, or officer, which Page 69 HB267 Engrossed contract or transaction is authorized pursuant to Section 10A-3A-8.60.

A nonprofit corporation may pay reasonable compensation, reasonable payments made in the ordinary course of the nonprofit corporation's activities and affairs, or Page 69 HB267 Enrolled reimburse reasonable expenses to its members, directors, or officers for services rendered and may confer reasonable benefits upon its members or nonmembers in conformity with its purposes.

Page 70 HB267 Engrossed DIVISION A.

(a) Unless otherwise provided in the certificate of incorporation, a membership nonprofit corporation shall hold a meeting of members annually at a time stated in or fixed in Page 70 HB267 Enrolled accordance with the certificate of incorporation or bylaws.

(a) Special meetings of the members in a membership nonprofit corporation may be called by the board of directors or by the person or persons as may be authorized by the Page 71 HB267 Engrossed certificate of incorporation or by the bylaws.

(b) In the event that the certificate of incorporation or bylaws of a membership nonprofit corporation allow members to demand a special meeting of the members, then if not otherwise fixed under Section 10A-3A-7.03 or Section 10A-3A-7.07, the record date for determining members entitled Page 71 HB267 Enrolled to demand a special meeting shall be the first date on which a signed member's demand is delivered to the membership nonprofit corporation.

(d) Only business within the purpose or purposes described in the meeting notice required by Section 10A-3A-7.05(c) may be conducted at a special meeting of Page 72 HB267 Engrossed members.

(a) The designated court, and if none, the circuit court for the county in which the membership nonprofit corporation's principal office is located in this state, and, if none in this state, the circuit court for the county in Page 72 HB267 Enrolled which the membership nonprofit corporation's most recent registered office is located may summarily order a meeting to be held:

(b) The court may fix the time and place of the meeting, determine the members entitled to participate in the meeting, specify a record date or dates for determining Page 73 HB267 Engrossed members entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting (or direct that the members represented at the meeting constitute a quorum for action on those matters), and enter other orders necessary to accomplish the purpose or purposes Page 73 HB267 Enrolled of the meeting.

(b) If not otherwise fixed under Section 10A-3A-7.07 and if prior action by the board of directors is not required respecting the action to be taken without a meeting, the record date for determining the members entitled to take action without a meeting shall be the first date on which a signed written consent is delivered to the membership Page 74 HB267 Engrossed nonprofit corporation.

No written consent shall be effective to take the Page 74 HB267 Enrolled corporate action referred to therein unless, within 60 days of the earliest date on which a consent is delivered to the membership nonprofit corporation as required by this section, written consents signed by sufficient members to take the action have been delivered to the membership nonprofit corporation.

Unless the certificate of incorporation, bylaws, or a resolution of the board of directors provides for a reasonable delay to permit tabulation Page 75 HB267 Engrossed of written consents, the action taken by written consent shall be effective when written consents signed by sufficient members to take the action have been delivered to the membership nonprofit corporation.

(d) If action is taken by less than unanimous written consent of the voting members, the membership nonprofit Page 75 HB267 Enrolled corporation shall give its nonconsenting voting members written notice of the action not more than 10 days after (i) written consents sufficient to take the action have been delivered to the membership nonprofit corporation, or (ii) any later date that tabulation of consents is completed pursuant to an authorization under subsection (c).

If the board of directors has authorized participation by means of remote communication pursuant to Section 10A-3A-7.09 for any class of Page 76 HB267 Engrossed members or voting group, the notice to that class of members or voting group must describe the means of remote communication to be used.

Unless Page 76 HB267 Enrolled the certificate of incorporation requires otherwise, the membership nonprofit corporation is required to give notice only to members entitled to vote at the meeting as of the record date for determining the members entitled to notice of the meeting.

(e) Unless the certificate of incorporation or bylaws require otherwise, if an annual, regular, or special meeting of the members is adjourned to a different place, if any, date, or time, notice need not be given of the new place, if Page 77 HB267 Engrossed any, date, or time if the new place, if any, date, or time is announced at the meeting before adjournment.

If a new record date for the adjourned meeting is or must be fixed under Section 10A-3A-7.07, however, notice of the adjourned meeting shall be given under this section to members entitled to vote at the adjourned meeting as of the record date fixed for Page 77 HB267 Enrolled notice of the adjourned meeting.

(a) The certificate of incorporation or bylaws may fix or provide the manner of fixing the record date or dates for one or more voting groups of members to determine the members Page 78 HB267 Engrossed entitled to notice of a members' meeting, to demand a special meeting, to vote, or to take any other action.

(b) A record date fixed under this section may not be Page 78 HB267 Enrolled more than 70 days before the meeting or action requiring a determination of members and may not be retroactive.

Page 79 HB267 Engrossed (b) At each meeting of members, the order of business and the rules for the conduct of the meeting must be:

(2) in the absence of a provision in the certificate of incorporation or bylaws, established by the board of Page 79 HB267 Enrolled directors;

Page 80 HB267 Engrossed (b) Members participating in a members' meeting by means of remote communication shall be deemed present and may vote at that meeting if the membership nonprofit corporation has implemented reasonable measures:

and Page 80 HB267 Enrolled (2) to provide the members participating remotely a reasonable opportunity to participate in the meeting and to vote on matters submitted to the members, including an opportunity to communicate, and to read or hear the proceedings of the meeting, substantially concurrently with the proceedings.

Page 81 HB267 Engrossed (3) provide an opportunity to vote for, or withhold a vote for, each candidate for election as a director, if any;

(c) Approval by ballot pursuant to this section of Page 81 HB267 Enrolled action other than election of directors is valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.

(a) After fixing a record date for a meeting, a membership nonprofit corporation shall prepare an alphabetical list of the names of all its members who are entitled to Page 82 HB267 Engrossed notice of and to vote at the members' meeting.

Each list must be arranged by voting group (and within each voting group by class) and contain the address of, and number and class of members and votes held by, each member, and if the notice or other communications regarding the meeting have been or will be sent by the membership nonprofit corporation to a member by Page 82 HB267 Enrolled electronic mail or other electronic transmission, the electronic mail or other electronic transmission address of that member.

A member, or the member's agent or attorney, is entitled on written demand to inspect and, subject to the Page 83 HB267 Engrossed requirements of Section 10A-3A-4.02(c), to copy a list of members, during regular business hours and at the member's expense, during the period it is available for inspection.

A member and the Page 83 HB267 Enrolled member's agent or attorney who inspects or is furnished a copy of a list of members under this subsection (b) or who copies the list under this subsection (b) may use the information on that list only for purposes related to the meeting and its subject matter and must keep the information on that list confidential.

Page 84 HB267 Engrossed (e) Instead of making the list of members available as provided in subsection (b), a membership nonprofit corporation may state in a notice of meeting that the membership nonprofit corporation has elected to proceed under this subsection (e).

If a membership nonprofit corporation has elected to proceed under this subsection (e), a member of that membership Page 84 HB267 Enrolled nonprofit corporation must state in that member's demand for inspection a proper purpose for which inspection is demanded.

Page 85 HB267 Engrossed §10A-3A-7.21.

Unless so limited, enlarged, or denied, each member, regardless of class, shall be entitled to Page 85 HB267 Enrolled one vote on each matter submitted to a vote of members.

(d) An appointment of a proxy is revocable unless the appointment form or electronic transmission states that it is Page 86 HB267 Engrossed irrevocable and the appointment is coupled with an interest.

(e) The death or incapacity of the member appointing a proxy does not affect the right of the membership nonprofit corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy Page 86 HB267 Enrolled exercises authority under the appointment.

(b) If the name signed on a vote, ballot, consent, Page 87 HB267 Engrossed waiver, member demand, or proxy appointment does not correspond to the name of its member, the membership nonprofit corporation, if acting in good faith, is nevertheless entitled to accept the vote, ballot, consent, waiver, member demand, or proxy appointment and give it effect as the act of the member if:

Page 87 HB267 Enrolled (1) the member is an entity and the name signed purports to be that of an officer or agent of the entity;

or Page 88 HB267 Engrossed (5) two or more persons are the members as co-tenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all the co-owners.

(c) The membership nonprofit corporation is entitled to reject a vote, ballot, consent, waiver, member demand, or Page 88 HB267 Enrolled proxy appointment if the person authorized to accept or reject that instrument, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the member.

(f) If an inspector of election has been appointed Page 89 HB267 Engrossed under Section 10A-2A-7.28, the inspector of election also has the authority to request information and make determinations under subsections (a), (b), and (c).

Page 89 HB267 Enrolled §10A-3A-7.24.

(d) An amendment of the certificate of incorporation or Page 90 HB267 Engrossed bylaws adding, changing, or deleting a quorum or voting requirement for a voting group greater than specified in subsection (a) or subsection (c) is governed by Section 10A-3A-7.26.

(e) If a meeting cannot be organized because a quorum is not present, those members present may adjourn the meeting Page 90 HB267 Enrolled to a time and place as they may determine.

Page 91 HB267 Engrossed §10A-3A-7.26.

Page 91 HB267 Enrolled (b) An amendment to the certificate of incorporation or bylaws that adds, changes, or deletes a quorum or voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever is greater.

If no inspector or alternate is able to act at a meeting of members, the person presiding at the meeting may appoint one or more inspectors to Page 92 HB267 Engrossed act at the meeting.

The inspectors may appoint or retain other persons to assist the inspectors in the performance of the duties of Page 92 HB267 Enrolled inspector under subsection (b), and may rely on information provided by those persons and other persons, including those appointed to count votes, unless the inspectors believe reliance is unwarranted.

(c) No ballot, proxies, or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the designated court, and if none, the circuit court for the county in which the membership nonprofits corporation's principal office is located in this state, and if none in this state, in the circuit court for the county in which the Page 93 HB267 Engrossed membership nonprofit corporation's most recent registered office is located, upon application by a member, shall determine otherwise.

(1) the proxy appointment forms and any other Page 93 HB267 Enrolled information provided in accordance with Section 10A-3A-7.22;

(a) Except as provided in the certificate of Page 94 HB267 Engrossed incorporation or bylaws, two or more members may provide for the manner in which they will vote by signing a written agreement for that purpose.

(b) A voting agreement created under this section is specifically enforceable, except that a voting agreement is Page 94 HB267 Enrolled not enforceable to the extent that enforcement of the agreement would violate the purposes of the membership nonprofit corporation.

Page 95 HB267 Engrossed §10A-3A-8.02.

Qualifications may include not being or having been subject to specified Page 95 HB267 Enrolled criminal, civil, or regulatory sanctions or not having been removed as a director by judicial action or for cause.

Page 96 HB267 Engrossed (a) A board of directors shall consist of one or more individuals, with the number specified in or fixed in accordance with the certificate of incorporation or bylaws.

Page 96 HB267 Enrolled §10A-3A-8.04.

A class or multiple Page 97 HB267 Engrossed classes of members entitled to elect one or more directors is a separate voting group for purposes of the election of directors.

If a term is not specified in Page 97 HB267 Enrolled the certificate of incorporation or bylaws, the term of a director is one year.

(a) A director may resign at any time by delivering a Page 98 HB267 Engrossed written notice of resignation to the board of directors or its chair, to the secretary, or to the nonprofit corporation.

Page 98 HB267 Enrolled §10A-3A-8.08.

Page 99 HB267 Engrossed (1) did not satisfy the qualifications for directors as set forth in the certificate of incorporation or bylaws at the time that director was nominated, elected, appointed, or designated to that director's current term, if the decision that the director failed to satisfy a qualification is made by the vote of a majority of the directors who meet all of the Page 99 HB267 Enrolled required qualifications;

(i) the director engaged in fraudulent conduct with respect to the nonprofit corporation or its members, grossly abused the position of Page 100 HB267 Engrossed director, or intentionally inflicted harm on the nonprofit corporation;

Page 100 HB267 Enrolled (a) Except as otherwise provided in subsection (b), the certificate of incorporation, or the bylaws, if a vacancy occurs on the board of directors, including a vacancy resulting from an increase in the number of directors:

or (3) designated in the certificate of incorporation or Page 101 HB267 Engrossed bylaws, may only be filled as specified in the certificate of incorporation or bylaws.

(c) A vacancy that will occur at a specific later time (by reason of a resignation effective at a later time under Section 10A-3A-8.07(b) or otherwise) may be filled before the vacancy occurs but the new director may not take office until Page 101 HB267 Enrolled the vacancy occurs.

(a) Except to the extent that the certificate of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this chapter to be taken by the board of directors may be taken without a meeting if each director signs a consent in a Page 102 HB267 Engrossed record describing the action to be taken and delivers it to the nonprofit corporation.

Any director executing a consent may provide, whether through Page 102 HB267 Enrolled instruction to an agent or otherwise, that the consent will be effective at a future time, including a time determined upon the happening of an event, occurring not later than 60 days after the instruction is given or the provision is made, if evidence of the instruction or provision is provided to the nonprofit corporation.

The notice need not describe the purpose of the special meeting Page 103 HB267 Engrossed unless required by the certificate of incorporation or bylaws.

Except as provided by subsection (b), the waiver must be in writing, Page 103 HB267 Enrolled signed by the director entitled to the notice, and delivered to the nonprofit corporation for filing by the nonprofit corporation with the minutes or corporate records.

(c) If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act Page 104 HB267 Engrossed of the board of directors unless the certificate of incorporation or bylaws require the vote of a greater number of directors or unless otherwise expressly provided in this chapter.

(d) A director who is present at a meeting of the board of directors or a committee when corporate action is taken is Page 104 HB267 Enrolled deemed to have assented to the action taken unless:

(b) Unless this chapter, the certificate of incorporation, or the bylaws provide otherwise, the establishment of a committee and appointment of directors to Page 105 HB267 Engrossed it must be approved by the greater of:

Page 105 HB267 Enrolled (c) Sections 10A-3A-8.20 through 10A-3A-8.24 apply to board committees and their members.

If the certificate of incorporation, bylaws, or the action creating a board committee so provides, the member or members present at any board committee meeting and not disqualified from voting may, Page 106 HB267 Engrossed by unanimous action, appoint another director to act in place of an absent or disqualified member during that member's absence or disqualification.

Page 106 HB267 Enrolled An advisory committee:

(c) In discharging board of directors or board committee duties, a director shall disclose, or cause to be disclosed, to the other board of directors or board committee members information not already known by them but known by the director to be material to the discharge of their Page 107 HB267 Engrossed decision-making or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule.

(d) In discharging board of directors or board Page 107 HB267 Enrolled committee duties, a director who does not have knowledge that makes reliance unwarranted is entitled to rely on the performance by any of the persons specified in subsection (f)(1) or subsection (f)(3) to whom the board of directors may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board of directors' functions that are delegable under applicable law.

(2) legal counsel, public accountants, or other persons Page 108 HB267 Engrossed retained by the nonprofit corporation as to matters involving skills or expertise the director reasonably believes are matters (i) within the particular person's professional or expert competence, or (ii) as to which the particular person merits confidence;

or (3) a board committee of which the director is not a Page 108 HB267 Enrolled member if the director reasonably believes the committee merits confidence.

Page 109 HB267 Engrossed (A) which the director did not reasonably believe to be in the best interests of the nonprofit corporation, or (B) as to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances;

or (iii) a lack of objectivity due to the director's Page 109 HB267 Enrolled familial, financial or business relationship with, or a lack of independence due to the director's domination or control by, another person having a material interest in the challenged conduct:

or (v) receipt of a financial benefit to which the director was not entitled or any other breach of the director's duties to deal fairly with the nonprofit Page 110 HB267 Engrossed corporation and its members that is actionable under applicable law.

(i) harm to the nonprofit corporation or its members Page 110 HB267 Enrolled has been suffered, and (ii) the harm suffered was proximately caused by the director's challenged conduct;

Page 111 HB267 Engrossed (3) affect any rights to which a director may be entitled under another statute of this state or the United States;

Page 111 HB267 Enrolled §10A-3A-8.32.

Page 112 HB267 Engrossed (1) the liability of a director under subsection (a) is barred unless it is commenced within two years after the date on which the distribution was made;

or (2) contribution or recoupment under subsection (b) is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under Page 112 HB267 Enrolled subsection (a).

Page 113 HB267 Engrossed (d) Unless the certificate of incorporation or bylaws provide otherwise, the same individual may simultaneously hold more than one office in a nonprofit corporation.

Each officer has the authority and shall perform the functions set forth in the certificate of incorporation or Page 113 HB267 Enrolled bylaws or, to the extent consistent with the certificate of incorporation or bylaws, the functions prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the functions of other officers.

(1) to inform the superior officer to whom, or the board of directors or the board committee to which, the officer reports of information about the affairs of the nonprofit corporation known to the officer, within the scope of the officer's functions, and known to the officer to be material to the superior officer, board of directors, or board Page 114 HB267 Engrossed committee;

and (2) to inform the officer's superior officer, or another appropriate person within the nonprofit corporation, or the board of directors, or a board committee, of any actual or probable material violation of law involving the nonprofit corporation or material breach of duty to the nonprofit Page 114 HB267 Enrolled corporation by an officer, employee, or agent of the nonprofit corporation, that the officer believes has occurred or is likely to occur.

(2) information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by one or more officers or employees, one or more volunteers of the nonprofit corporation, or one or more other persons associated with the nonprofit corporation, whom the officer reasonably believes to be reliable and competent in the matters presented, or legal counsel, public accountants, or other persons retained by the nonprofit corporation as to matters involving skills or expertise the Page 115 HB267 Engrossed officer reasonably believes are matters:

(d) An officer is not liable to the nonprofit Page 115 HB267 Enrolled corporation or its members for any decision to take or not to take action, or any failure to take any action, as an officer, if the duties of the office are performed in compliance with this section.

Page 116 HB267 Engrossed (b) An officer may be removed at any time with or without cause by (i) the board of directors;

Page 116 HB267 Enrolled (c) In this section, "appointing officer" means the officer (including any successor to that officer) who appointed the officer resigning or being removed.

A director or officer is considered to be serving an employee benefit plan at the nonprofit Page 117 HB267 Engrossed corporation's request if the individual's duties to the nonprofit corporation also impose duties on, or otherwise involve services by, the individual to the plan or to participants in or beneficiaries of the plan.

"Director" or "officer" includes, unless the context requires otherwise (i) the estate or personal representative of a director or officer Page 117 HB267 Enrolled and (ii) with respect to a director, an individual designated, elected, or appointed by that or any other name or title.

(6) "PROCEEDING" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative and Page 118 HB267 Engrossed whether formal or informal.

Page 118 HB267 Enrolled (1)(i) the director conducted himself or herself in good faith;

(c) The termination of a proceeding by judgment, order, Page 119 HB267 Engrossed settlement, or conviction, or upon a plea of nolo contendere or its equivalent, is not, of itself, determinative that the director did not meet the relevant standard of conduct described in this section.

(d) Unless ordered by a court under Section 10A-3A-8.54(a)(3), a nonprofit corporation may not indemnify a Page 119 HB267 Enrolled director:

(a) A nonprofit corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding Page 120 HB267 Engrossed by an individual who is a party to the proceeding because that individual is a director if the director delivers to the nonprofit corporation a signed written undertaking of the director to repay any funds advanced if (i) the director is not entitled to mandatory indemnification under Section 10A-3A-8.52 and (ii) it is ultimately determined under Section Page 120 HB267 Enrolled 10A-3A-8.54 or Section 10A-3A-8.55 that the director is not entitled to indemnification.

Page 121 HB267 Engrossed §10A-3A-8.54.

After receipt of Page 121 HB267 Enrolled an application and after giving any notice it considers necessary, the court shall:

(b) If the court determines that the director is Page 122 HB267 Engrossed entitled to indemnification under subsection (a)(1) or to indemnification or advance for expenses under subsection (a)(2), it shall also order the nonprofit corporation to pay the director's expenses incurred in connection with obtaining court-ordered indemnification or advance for expenses.

If the court determines that the director is entitled to Page 122 HB267 Enrolled indemnification or advance for expenses under subsection (a)(3), it may also order the nonprofit corporation to pay the director's expenses to obtain court-ordered indemnification or advance for expenses.

or Page 123 HB267 Engrossed (ii) if there are fewer than two qualified directors, selected by the board of directors (in which selection directors who are not qualified directors may participate);

or (3) by the members, but membership interests owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the Page 123 HB267 Enrolled determination.

and (2) if he or she is an officer but not a director, to such further extent as may be provided by the certificate of incorporation or the bylaws, or by a resolution adopted or a contract approved by the board of directors or members except for (i) liability in connection with a proceeding by the nonprofit corporation other than for expenses incurred in connection with the proceeding, or Page 124 HB267 Engrossed (ii) liability arising out of conduct that constitutes (A) receipt by the officer of a financial benefit to which the officer is not entitled, (B) an intentional infliction of harm on the nonprofit corporation or the members, or (C) an intentional violation of criminal law.

Page 124 HB267 Enrolled (b) Subsection (a)(2) shall apply to an officer who is also a director if the person is made a party to the proceeding based on an act or omission solely as an officer.

A nonprofit corporation may purchase and maintain insurance on behalf of an individual who is a director or officer of the nonprofit corporation, or who, while a director or officer of the nonprofit corporation, serves at the nonprofit corporation's request as a director, officer, partner, trustee, employee, or agent of another corporation or foreign corporation or a joint venture, trust, employee benefit plan, or other entity, against liability asserted against or incurred by the individual in that capacity or Page 125 HB267 Engrossed arising from the individual's status as a director or officer, regardless of whether the nonprofit corporation would have power to indemnify or advance expenses to the individual against the same liability under this Division E of this Article 8.

Page 125 HB267 Enrolled application of division.

(b) A right of indemnification or to advances for expenses created by this Division E of this Article 8 or under subsection (a) and in effect at the time of an act or omission shall not be eliminated or impaired with respect to the act or omission by an amendment of the certificate of incorporation, Page 126 HB267 Engrossed bylaws, or a resolution of the board of directors or members, adopted after the occurrence of the act or omission, unless, in the case of a right created under subsection (a), the provision creating the right and in effect at the time of the act or omission explicitly authorizes elimination or impairment after the act or omission has occurred.

Page 126 HB267 Enrolled (c) Any provision pursuant to subsection (a) shall not obligate the nonprofit corporation to indemnify or advance expenses to a director of a predecessor of the nonprofit corporation, pertaining to conduct with respect to the predecessor, unless otherwise expressly provided.

(f) This Division E of this Article 8 does not limit a Page 127 HB267 Engrossed nonprofit corporation's power to indemnify, advance expenses to or provide or maintain insurance on behalf of an employee, agent, or volunteer.

A nonprofit corporation may provide indemnification or advance expenses to a director or an officer only as permitted Page 127 HB267 Enrolled by this Division E of this Article 8.

or Page 128 HB267 Engrossed (2) The material facts as to the director's or officer's relationship or interest and as to the contract or transaction are disclosed or are known to (i) the members in a membership nonprofit corporation entitled to vote thereon or (ii) the qualified directors of the board of directors in a membership nonprofit corporation, and the contract or Page 128 HB267 Enrolled transaction is specifically approved in good faith by vote of the members in a membership nonprofit corporation or the qualified directors of the board of directors in a membership nonprofit corporation;

(a) A nonprofit corporation may amend its certificate of incorporation at any time to add or change a provision that Page 129 HB267 Engrossed is required or permitted in the certificate of incorporation as of the effective date of the amendment or to delete a provision that is not required to be contained in the certificate of incorporation.

Page 129 HB267 Enrolled (b) Neither (i) a member of a membership nonprofit corporation nor (ii) a person having rights under the certificate of incorporation, has a vested property right resulting from any provision in the certificate of incorporation, including provisions relating to management, control, purpose, or duration of the nonprofit corporation.

Page 130 HB267 Engrossed (b) Except as provided in subsection (g) and Sections 10A-3A-9.07 and 10A-3A-9.08, the amendment shall then be approved by the members entitled to vote on the amendment.

In submitting the proposed amendment to the members for approval, the board of directors shall recommend that the members approve the amendment, unless the board of directors makes a Page 130 HB267 Enrolled determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors must inform the members of the basis for that determination.

(e) Unless the certificate of incorporation, or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater quorum, approval of the amendment requires the approval of the members at a meeting at which a quorum consisting of a majority of the votes entitled to be cast on the amendment exists, and, if any class of members is entitled to vote as a separate group on the amendment, except Page 131 HB267 Engrossed as provided in Section 10A-3A-9.04(d), the approval of each separate voting group at a meeting at which a quorum of the voting group exists consisting of a majority of the votes entitled to be cast on the amendment by that voting group.

(f) In addition to the adoption and approval of an amendment by the board of directors and members as required by Page 131 HB267 Enrolled this section, an amendment must also be approved by a person or group of persons, if any, whose approval is required by the certificate of incorporation in accordance with Section 10A-3A-9.30.

Page 132 HB267 Engrossed Except as provided in the certificate of incorporation or bylaws:

(a) If a membership nonprofit corporation has more than one class of members, the members of each class are entitled to vote as a separate voting group (if member voting is otherwise required by this chapter) on a proposed amendment to Page 132 HB267 Enrolled the certificate of incorporation if the amendment would:

(b) If a class of members will be divided into two or more classes by an amendment to the certificate of Page 133 HB267 Engrossed incorporation, the amendment must be approved by a majority of the members of each class that will be created.

Page 133 HB267 Enrolled (d) If a proposed amendment that entitles the holders of two or more classes of memberships to vote as separate voting groups under this section would affect those two or more classes in the same or a substantially similar way, the holders of the memberships of all the classes so affected shall vote together as a single voting group on the proposed amendment, unless added as a condition by the board of directors pursuant to Section 10A-3A-9.03(c).

(a) After an amendment to the certificate of Page 134 HB267 Engrossed incorporation has been adopted and approved in the manner required by this chapter, the certificate of incorporation, and bylaws, the nonprofit corporation must deliver to the Secretary of State, for filing, a certificate of amendment, which must set forth:

Page 134 HB267 Enrolled (2) the text of each amendment adopted or the information required by Section 10A-3A-1.04(c)(5);

and Page 135 HB267 Engrossed (7) the unique identifying number or other designation as assigned by the Secretary of State.

Page 135 HB267 Enrolled (a) A membership nonprofit corporation's board of directors may restate its certificate of incorporation at any time, without member approval, to consolidate all amendments into a single document.

(4) if a new amendment is included in the restated certificate of incorporation, the statements required under Page 136 HB267 Engrossed Section 10A-3A-9.06 with respect to the new amendment;

(d) The duly adopted restated certificate of incorporation supersedes the original certificate of incorporation and all amendments to the certificate of Page 136 HB267 Enrolled incorporation.

(5) a statement that the court had jurisdiction of the Page 137 HB267 Engrossed proceeding under federal statute;

(c) This section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes Page 137 HB267 Enrolled unrelated to consummation of the reorganization plan.

(a) A restated certificate of incorporation takes effect when the filing of the restated certificate of incorporation takes effect as provided by Article 4 of Chapter Page 138 HB267 Engrossed 1.

(b) On the date and time the restated certificate of incorporation takes effect, the original certificate of incorporation and each prior amendment or restatement of the certificate of incorporation is superseded and the restated certificate of incorporation is the effective certificate of Page 138 HB267 Enrolled incorporation.

Bylaw increasing quorum or voting requirement for directors or requiring a meeting place in a Page 139 HB267 Engrossed membership nonprofit corporation.

Page 139 HB267 Enrolled (1) if originally adopted by the members, only by the members, unless the bylaw otherwise provides;

(1) Section 10A-3A-6.10 providing that some of the Page 140 HB267 Engrossed members shall have different rights or obligations than other members with respect to voting, dissolution, transfer of memberships, or other matters;

(3) Section 10A-3A-6.21 relating to the termination or Page 140 HB267 Enrolled suspension of members;

(d) If a class of members will be divided into two or Page 141 HB267 Engrossed more classes by an amendment to the bylaws, the amendment must be approved by a majority of the members of each class that will be created.

Page 141 HB267 Enrolled (a) The certificate of incorporation of a membership nonprofit corporation may require that an amendment to the certificate of incorporation, including amendments under Section 10A-3A-9.03(g), be approved in writing by a specified person or group of persons in addition to the board of directors and members.

(c) A requirement in the certificate of incorporation or bylaws described in Section 10A-3A-9.30(a) or (b) may only be amended with the approval in writing of the specified Page 142 HB267 Engrossed person or group of persons.

In a membership nonprofit corporation, no approval of the members is required, unless the certificate of Page 142 HB267 Enrolled incorporation otherwise provides:

A membership nonprofit corporation will Page 143 HB267 Engrossed conclusively be deemed to have retained a significant continuing activity if it retains an activity that represented, for the membership nonprofit corporation and its subsidiaries on a consolidated basis, at least (i) 25 percent of total assets at the end of the most recently completed fiscal year, and (ii) either 25 percent of either income from Page 143 HB267 Enrolled continuing operations before taxes or 25 percent of revenues from continuing operations, in each case for the most recently completed fiscal year.

(d) If a disposition is required to be approved by the members under subsection (a), and if the approval is to be given at a meeting, the membership nonprofit corporation shall notify each member entitled to vote on the matter of the meeting of members at which the disposition is to be submitted Page 144 HB267 Engrossed for approval.

Page 144 HB267 Enrolled (e) Unless the certificate of incorporation, bylaws, or the board of directors acting pursuant to subsection (c) requires a greater vote or a greater quorum, the approval of a disposition by the members shall require the approval of the members at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the disposition.

As used in this subsection, "subsidiary" means any entity wholly owned and controlled, directly or indirectly, by the membership nonprofit corporation and includes, without limitation, nonprofit corporations, business corporations, partnerships (including Page 145 HB267 Engrossed limited liability partnerships), limited partnerships (including limited liability limited partnerships), limited liability companies, and/or statutory trusts, whether domestic or foreign.

(i) In addition to the approval of a disposition of assets by the board of directors and members as required by Page 145 HB267 Enrolled this section, the disposition must also be approved in writing by a person or group of persons whose approval is required under the certificate of incorporation in accordance with Section 10A-3A-10.04.

(a) The certificate of incorporation of a membership Page 146 HB267 Engrossed nonprofit corporation may require that a disposition of assets under Section 10A-3A-10.02 be approved in writing by a specified person or group of persons in addition to the board of directors and members.

(b) The certificate of incorporation of a nonmembership nonprofit corporation may require that a disposition of assets Page 146 HB267 Enrolled under Section 10A-3A-10.03 be approved in writing by a specified person or group of persons in addition to the board of directors.

Page 147 HB267 Engrossed (5) that the net assets of the nonprofit corporation remaining after winding up have been distributed;

Page 147 HB267 Enrolled §10A-3A-11.02.

(d) If the approval of the members is to be given at a meeting, the membership nonprofit corporation shall notify each member entitled to vote on the dissolution, of the meeting of members at which the dissolution is to be submitted Page 148 HB267 Engrossed for approval.

Page 148 HB267 Enrolled (e) Unless the certificate of incorporation, the bylaws, or the board of directors acting pursuant to subsection (c), requires a greater vote, a greater quorum, or a vote by voting groups, adoption of the proposal to dissolve shall require the approval of the members at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the proposal to dissolve.

Except as otherwise provided in the certificate of Page 149 HB267 Engrossed incorporation:

and (2) the dissolution of the nonmembership nonprofit corporation approved by the board of directors under this section must also be approved by those persons whose approval Page 149 HB267 Enrolled is required by the certificate of incorporation in accordance with Section 10A-3A-11.04.

(a) At any time after dissolution is authorized, the nonprofit corporation may dissolve by delivering to the Secretary of State for filing a certificate of dissolution Page 150 HB267 Engrossed setting forth:

(3) if dissolution of a membership nonprofit corporation was approved in accordance with Section 10A-3A-11.02, a statement that the proposal to dissolve was Page 150 HB267 Enrolled duly approved in the manner required by this chapter and by the certificate of incorporation;

(c) For purposes of this Division A of this Article 11, Page 151 HB267 Engrossed "dissolved nonprofit corporation" means a nonprofit corporation whose certificate of dissolution has become effective and includes a successor entity to which the remaining assets of the nonprofit corporation are transferred subject to its liabilities for purposes of liquidation.

Page 151 HB267 Enrolled (a) A nonprofit corporation may revoke its dissolution within 120 days after its effective date and be reinstated.

Page 152 HB267 Engrossed (4) if the nonprofit corporation's board of directors (or incorporators) revoked the dissolution and effected the reinstatement, a statement to that effect;

(5) if the nonprofit corporation's board of directors revoked a dissolution and effected the reinstatement as authorized by the members and any specified person or group of Page 152 HB267 Enrolled persons set forth in the certificate of incorporation in accordance with Section 10A-3A-11.04, a statement that revocation and reinstatement was permitted by action by the board of directors alone pursuant to that authorization;

Revocation of dissolution and reinstatement is effective upon Page 153 HB267 Engrossed the effective date of the certificate of revocation of dissolution and reinstatement.

and each right inuring Page 153 HB267 Enrolled to, and each debt, obligation, and liability incurred by, the nonprofit corporation after the dissolution shall be determined as if the dissolution had never occurred.

(a) A dissolved nonprofit corporation continues its existence as a nonprofit corporation but may not carry on any activity except as is appropriate to wind up and liquidate its Page 154 HB267 Engrossed activities and affairs, including:

Page 154 HB267 Enrolled (4) distributing its remaining property among as required by law, its certificate of incorporation, bylaws, and as approved when the dissolution was authorized;

(i) quorum or voting requirements for its board of Page 155 HB267 Engrossed directors or members;

Page 155 HB267 Enrolled (5) abate or suspend a proceeding pending by or against the nonprofit corporation on the effective date of dissolution;

(4) state the deadline, which may not be fewer than 120 Page 156 HB267 Engrossed days from the effective date of the notice, by which the dissolved nonprofit corporation must receive the claim;

(c) Unless sooner barred by any other statute limiting actions, a claim against a dissolved nonprofit corporation is Page 156 HB267 Enrolled barred:

Page 157 HB267 Engrossed (1) be published at least one time in a newspaper of general circulation in the county in which the dissolved nonprofit corporation's principal office is located or, if it has none in this state, in the county in which the nonprofit corporation's most recent registered office is located;

(2) describe the information that must be included in a Page 157 HB267 Enrolled claim and provide a mailing address to which the claim is to be sent;

and (3) a claimant whose claim is contingent at the effective date of the dissolution of the nonprofit corporation, or is based on an event occurring after the effective date of the dissolution of the nonprofit Page 158 HB267 Engrossed corporation.

and Page 158 HB267 Enrolled (2) except as provided in subsection (h), if the assets of a dissolved nonprofit corporation have been distributed after dissolution, against any person, other than a creditor of the dissolved nonprofit corporation, to whom the nonprofit corporation distributed its property to the extent of the distributee's pro rata share of the claim or the corporate assets distributed to the distributee in liquidation, whichever is less, but a distributee's total liability for all claims under this section may not exceed the total amount of assets distributed to the distributee.

(e) A dissolved nonprofit corporation that published a notice under this section may file an application with the circuit court for the county in which the dissolved nonprofit corporation's principal office is located in this state and if the dissolved nonprofit corporation does not have a principal office within this state, with the circuit court for the county in which the dissolved nonprofit corporation's most recent registered office is located, for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved nonprofit corporation or that are based on an event occurring after the effective date of the dissolution of the Page 159 HB267 Engrossed nonprofit corporation but that, based on the facts known to the dissolved nonprofit corporation, are reasonably estimated to arise after the effective date of the dissolution of the nonprofit corporation.

Page 159 HB267 Enrolled (f) Within 10 days after the filing of the application provided for in subsection (e), notice of the proceeding shall be given by the dissolved nonprofit corporation to each potential claimant as described in subsection (e).

(i) Nothing in this section shall be deemed to extend Page 160 HB267 Engrossed any otherwise applicable statute of limitations.

(j) If a claim has been satisfied, disposed of, or barred under Section 10A-3A-11.08, this section, or other law, the person or persons designated to wind up the affairs of a dissolved nonprofit corporation, and the distributees receiving assets from the dissolved nonprofit corporation, Page 160 HB267 Enrolled shall not be liable for that claim.

(1) in a proceeding by the Attorney General if it is Page 161 HB267 Engrossed established that:

(2) in a proceeding by a director, or members holding Page 161 HB267 Enrolled at least 25 percent of the aggregate voting power of all of the members entitled to vote on dissolution, unless the certificate of incorporation reduces or eliminates that percentage requirement, if it is established that:

or Page 162 HB267 Engrossed (vii) the nonprofit corporation has abandoned its activities and affairs and has failed within a reasonable time to liquidate and distribute its assets and dissolve;

(i) the creditor's claim has been reduced to judgment, Page 162 HB267 Enrolled the execution on the judgment returned unsatisfied, and the nonprofit corporation is insolvent;

Venue Page 163 HB267 Engrossed for a proceeding brought by any other party named in Section 10A-3A-11.20 lies in circuit court for the county in which the nonprofit corporation's principal office is located in this state, and if none in this state, in the circuit court for the county in which the nonprofit corporation's most recent registered office is located.

Page 163 HB267 Enrolled (b) It is not necessary to make members or directors parties to a proceeding to dissolve a nonprofit corporation unless relief is sought against them individually.

The court appointing a receiver or custodian has Page 164 HB267 Engrossed jurisdiction over the nonprofit corporation and all of its property wherever located.

The court may require the receiver or custodian Page 164 HB267 Enrolled to post bond, with or without sureties, in an amount the court directs.

If the custodian determines that the nonprofit corporation should not be dissolved, the custodian shall prepare and present to the court a plan of operation which Page 165 HB267 Engrossed shall set forth:

(ii) that the continuation of the activities and affairs of the nonprofit corporation will not be in Page 165 HB267 Enrolled contravention of the certificate of incorporation or bylaws of the nonprofit corporation;

(e) The court from time to time during the receivership or custodianship may order compensation paid and expenses paid or reimbursed to the receiver or custodian from the assets of the nonprofit corporation or proceeds from the sale of the Page 166 HB267 Engrossed assets.

(a) If after a hearing the court determines that one or more grounds for judicial dissolution described in Section 10A-3A-11.20 exist, the court may enter a decree dissolving the nonprofit corporation and specifying the effective date of Page 166 HB267 Enrolled the dissolution.

If the court approves an amendment to the certificate of incorporation in accordance with Section 10A-3A-11.22(c)(3), then the court's decree shall also set forth that amendment, specifying the effective date of that amendment, and the clerk of the court shall deliver a Page 167 HB267 Engrossed certified copy of the decree to the Secretary of State for filing.

Assets of a dissolved nonprofit corporation that should be transferred to a creditor, claimant, or a person designated to receive the assets of the nonprofit corporation who cannot Page 167 HB267 Enrolled be found or who is not competent to receive them shall be reduced to cash and deposited with the State Treasurer or other appropriate state official for safekeeping.

Page 168 HB267 Engrossed nonprofit corporation;

(A) for a general partnership or foreign general partnership, its partnership agreement and if applicable, its Page 168 HB267 Enrolled registration as a limited liability partnership or a foreign limited liability partnership;

(F) for a nonprofit corporation or foreign nonprofit corporation, its certificate of incorporation, bylaws, and other agreements that are authorized by its governing statute, Page 169 HB267 Engrossed or comparable writings as provided in its governing statute;

and Page 169 HB267 Enrolled (H) for any other organization, the basic writings that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it.

(1) the name, type of organization, and mailing address of the principal office of each constituent organization, the Page 170 HB267 Engrossed jurisdiction of the governing statute of each constituent organization, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each constituent organization;

(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the Page 170 HB267 Enrolled unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving organization, the jurisdiction of the governing statute of the surviving organization, and, if the surviving organization is created pursuant to the merger, a statement to that effect;

(c) In connection with a merger, rights, securities, or interests, if any, in a constituent organization may be exchanged for or converted into cash, property, rights, securities, or interests, if any, in the surviving organization, or, in addition to or in lieu thereof, may be Page 171 HB267 Engrossed exchanged for or converted into cash, property, rights, securities, or interests, if any, in another organization, or may be cancelled.

Page 171 HB267 Enrolled (e) Terms of a plan of merger may be made dependent on facts objectively ascertainable outside the plan in accordance with Section 10A-3A-1.04(c)(5).

(ii) the certificate of incorporation of any nonprofit corporation, foreign nonprofit corporation, business corporation, foreign business corporation or the Page 172 HB267 Engrossed organizational documents of any other organization, that will be the surviving organization, except for changes permitted by Section 10A-3A-9.03(g) or by comparable provisions of the governing statute of the foreign nonprofit corporation, business corporation, foreign business corporation, or other organization;

or Page 172 HB267 Enrolled (iii) any of the other terms or conditions of the plan if the change would adversely affect the interest holders in any material respect.

Page 173 HB267 Engrossed (d) If the plan of merger is required to be approved by the members, and if the approval is to be given at a meeting, the membership nonprofit corporation shall notify each member who is entitled to vote, of the meeting of the members at which the plan of merger is to be submitted for approval.

The notice must state that the purpose, or one of the purposes, of Page 173 HB267 Enrolled the meeting is to consider the plan of merger and must contain or be accompanied by a copy or summary of the plan of merger.

(e) Unless the certificate of incorporation, or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater quorum, approval of the plan of merger requires the approval of the members entitled to vote Page 174 HB267 Engrossed at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the plan of merger, and, if any class of membership interests entitled to vote as a separate group on the plan of merger, the approval of each separate voting group at a meeting at which a quorum of the voting group is present consisting of a majority of the votes Page 174 HB267 Enrolled entitled to be cast on the merger by that voting group.

(g) The certificate of incorporation may expressly limit or eliminate the separate voting rights provided in subsection (f)(1)(i) and subsection (f)(2) as to any class of membership, except when the plan of merger includes what is or Page 175 HB267 Engrossed would be in effect an amendment subject to subsection (f)(1)(ii).

(1) the membership nonprofit corporation will survive Page 175 HB267 Enrolled the merger;

In the case of a merger of a nonmembership nonprofit Page 176 HB267 Engrossed corporation the plan of merger shall be adopted in the following manner:

and (b) A plan of merger adopted by the board of directors under this section must also be approved in writing by a Page 176 HB267 Enrolled person or group of persons, if any, whose approval is required under Section 10A-3A-12.08.

Page 177 HB267 Engrossed (4) if the surviving organization is to be created pursuant to the merger:

or (B) if it will be an organization other than a nonprofit corporation, any organizational document that Page 177 HB267 Enrolled creates the organization that is required to be in a public writing or in the case of a limited liability partnership, its statement of limited liability partnership;

(9) if the plan of merger required approval by the members of a membership nonprofit corporation that is a constituent organization, a statement that the plan was duly approved by the members and, if voting by any separate voting group was required, by each separate voting group, in the manner required by this chapter, the certificate of Page 178 HB267 Engrossed incorporation or bylaws;

Page 178 HB267 Enrolled (11) if the plan of merger did not require approval by the members of a membership nonprofit corporation that is a constituent organization, a statement to that effect;

Page 179 HB267 Engrossed (e) A statement of merger filed under this section may be combined with any filing required under the governing statute governing any domestic organization involved in the transaction if the combined filing satisfies the requirements of this section, the other governing statute, and Article 4 of Chapter 1.

Page 179 HB267 Enrolled (f) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any constituent organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee.

(3) except as provided in the plan of merger, all Page 180 HB267 Engrossed property owned by, and every contract right possessed by, each constituent organization that ceases to exist vests in the surviving organization without transfer, reversion, or impairment and the title to any property and contract rights vested by deed or otherwise in the surviving organization shall not revert, be in any way impaired, or be deemed to be a Page 180 HB267 Enrolled transfer by reason of the merger;

(8) except as otherwise agreed, if a constituent organization that is a nonprofit corporation ceases to exist, Page 181 HB267 Engrossed the merger does not dissolve the nonprofit corporation;

or (B) if it is an organization other than a nonprofit Page 181 HB267 Enrolled corporation, the organizational documents that create the organization becomes effective;

(A) except as provided in the plan of merger, all property and contract rights of the surviving organization Page 182 HB267 Engrossed remain its property and contract rights without transfer, reversion, or impairment;

and (C) except as provided by law other than this chapter or the plan of merger, the surviving organization continues to Page 182 HB267 Enrolled hold all of its rights, privileges, franchises, immunities, powers and purposes.

(a) After a plan of merger has been adopted and approved as required by this Article 12, and before the statement of merger has become effective, the plan may be Page 183 HB267 Engrossed abandoned by a nonprofit corporation that is a party to the plan without action by its members, if any, or a person or group of persons under Section 10A-3A-12.08, if any, in accordance with any procedures set forth in the plan of merger or, if no procedures are set forth in the plan, in the manner determined by the board of directors.

Page 183 HB267 Enrolled (b) If a merger is abandoned under subsection (a) after the statement of merger has been delivered to the Secretary of State for filing but before the merger has become effective, a statement of abandonment signed by all the parties that signed the statement of merger shall be delivered to the Secretary of State for filing before the statement of merger becomes effective.

(b) The certificate of incorporation of a nonmembership Page 184 HB267 Engrossed nonprofit corporation may require that a merger under this article or under Article 8 of Chapter 1 be approved in writing by a specified person or group of persons in addition to the board of directors.

(c) A requirement in the certificate of incorporation described in subsections (a) or (b) of this section may only Page 184 HB267 Enrolled be approved by the written approval of the specified person or group of persons.

limited Page 185 HB267 Engrossed liability company;

(A) for a general partnership or foreign general Page 185 HB267 Enrolled partnership, its partnership agreement and if applicable, its registration as a limited liability partnership or a foreign limited liability partnership;

(F) for a nonprofit corporation or foreign nonprofit corporation, its certificate of incorporation, bylaws, and Page 186 HB267 Engrossed other agreements that are authorized by its governing statute, or comparable writings as provided in its governing statute;

(G) for a professional corporation or foreign professional corporation, its certificate of incorporation, bylaws, and other agreements among its stockholders that are authorized by its governing statute or comparable writings as Page 186 HB267 Enrolled provided in its governing statute;

Page 187 HB267 Engrossed (1) the name, type of organization, and mailing address of the principal office of the converting organization and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;

(2) the name, type of organization, and mailing address of the principal office of the converted organization after Page 187 HB267 Enrolled conversion;

Page 188 HB267 Engrossed §10A-3A-13.03.

(a) The plan of conversion shall first be adopted by Page 188 HB267 Enrolled the board of directors.

The notice must include or be accompanied by a copy of the organizational documents of the converted organization which Page 189 HB267 Engrossed are to be in writing as they will be in effect immediately after the conversion.

(e) Unless the certificate of incorporation or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater quorum, approval of the plan of conversion requires (i) the approval of the members entitled Page 189 HB267 Enrolled to vote at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the plan of conversion, and (ii) the approval of each class of members voting as a separate voting group at a meeting at which a quorum of the voting group exists consisting of a majority of the votes entitled to be cast on the plan of conversion by that voting group.

and (b) A plan of conversion adopted by the board of directors under this section must also be approved in writing by a person or group of persons, if any, whose approval is Page 190 HB267 Engrossed required under Section 10A-3A-13.08.

(1) if the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, the converting organization shall file a Page 190 HB267 Enrolled statement of conversion in accordance with subsection (c), which statement of conversion must be signed in accordance with Section 10A-1-4.01 and which must include:

(H) a statement that a copy of the plan of conversion will be furnished by the converted organization, on request Page 191 HB267 Engrossed and without cost, to any owner of the converting organization;

and Page 191 HB267 Enrolled (2) if the converted organization is a nonprofit corporation, the converting organization shall deliver for filing a certificate of incorporation in accordance with subsection (d), which certificate of incorporation must include, in addition to the information required by Section 10A-3A-2.02:

and (2) if the converted organization is not a nonprofit corporation, as provided by the governing statute of the Page 192 HB267 Engrossed converted organization.

Page 192 HB267 Enrolled (d) If the converted organization is a nonprofit corporation, then, the converting organization shall deliver for filing the certificate of incorporation required under subsection (a)(2) to the Secretary of State.

and (4) the name of the converted organization complies Page 193 HB267 Engrossed with Division A of Article 5 of Chapter 1 or Section 10A-1-7.07, as the case may be;

then notwithstanding Division B of Article 5 of Chapter 1, no name reservation shall be required and the converted organization shall for all purposes of this title be entitled to utilize the name of the converting organization without any further action by the Page 193 HB267 Enrolled converting organization or the converted organization.

or Page 194 HB267 Engrossed (2) in the manner provided in the plan, except that if the plan has been approved by the members that were entitled to vote on, consent to, or approve of the plan, then those members are entitled to vote on, consent to, or approve of any amendment of the plan that will change:

(i) the amount or kind of interests, if any, or other Page 194 HB267 Enrolled securities, obligations, rights to acquire interests, if any, or other securities, cash, other property, or any combination of the foregoing, to be received by the members, if any, of the converting nonprofit corporation under the plan;

Page 195 HB267 Engrossed (c) If a conversion is abandoned after the statement of conversion has been delivered to the Secretary of State for filing and before the statement of conversion becomes effective, a statement of abandonment, signed by the converting organization, must be delivered to the Secretary of State for filing before the statement of conversion becomes Page 195 HB267 Enrolled effective.

Page 196 HB267 Engrossed (3) an action or proceeding pending by or against the converting organization continues as if the conversion had not occurred and the name of the converted organization may, but need not, be substituted for the name of the converting organization in any pending action or proceeding;

(4) except as prohibited by law other than this Page 196 HB267 Enrolled chapter, all of the rights, privileges, immunities, powers, and purposes of the converting organization remain vested in the converted organization;

(8) if the converted organization is a nonprofit corporation, for all purposes of the laws of this state, the nonprofit corporation shall be deemed to be the same organization as the converting organization, and the Page 197 HB267 Engrossed conversion shall constitute a continuation of the existence of the converting organization in the form of a nonprofit corporation;

(9) if the converted organization is a nonprofit corporation, the existence of the nonprofit corporation shall be deemed to have commenced on the date the converting Page 197 HB267 Enrolled organization commenced its existence in the jurisdiction in which the converting organization was first created, formed, organized, incorporated, or otherwise came into being;

and (12) the interests, if any, of the converting organization are reclassified into interests or other securities, obligations, rights to acquire interests or other securities, cash, or other property in accordance with the terms of the conversion, and the interest holders, if any, of the converting organization are entitled only to the rights provided to them by those terms and to any rights they may have under the governing statute of the converting Page 198 HB267 Engrossed organization.

(b) A converted organization that is a foreign entity consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability for which the converting nonprofit corporation, is liable if, before the conversion, the converting nonprofit corporation was subject Page 198 HB267 Enrolled to suit in this state on the debt, obligation, or other liability.

(c) A requirement in the certificate of incorporation Page 199 HB267 Engrossed described in subsections (a) or (b) of this section may only be approved by the written approval of the specified person or group of persons.

This article does not preclude a nonprofit corporation from converting under law Page 199 HB267 Enrolled other than this chapter.

Page 200 HB267 Engrossed (1) the nonprofit corporation is not required to amend its certificate of incorporation to comply with Section 10A-3A-2.02(a)(5);

(2) if on December 31, 2023, the certificate of Page 200 HB267 Enrolled incorporation or bylaws of a nonprofit corporation in existence on that date provides members with the right to cumulate their votes for the election of directors, that right to cumulate their votes shall continue unless the certificate of incorporation or bylaws of the nonprofit corporation are amended to deny that right.

Page 201 HB267 Engrossed A foreign nonprofit corporation registered or authorized to transact business in this state on January 1, 2024, is subject to this chapter and is deemed to be registered to transact business in this state, and is not required to renew its registration to transact business under Article 7 of Chapter 1, except as required by Article 7 of Page 201 HB267 Enrolled Chapter 1.

Page 202 HB267 Engrossed §10A-3A-14.04.

If any provision of this chapter or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to Page 202 HB267 Enrolled this end the provisions of this chapter are severable.

Page 203 HB267 Engrossed (b) As used in this title, except as provided in subsection (a) of this section or where the context otherwise requires, the following terms mean:

An affiliate of an individual includes the spouse, or a parent or sibling Page 203 HB267 Enrolled thereof, of the individual, or a child, grandchild, sibling, parent, or spouse of any thereof, of the individual, or an individual having the same home as the individual, or a trust or estate of which an individual specified in this sentence is a substantial beneficiary;

(C) the person's spouse or a relative of the person related by consanguinity or affinity within the fifth degree Page 204 HB267 Engrossed who resides with the person;

Includes, but is not limited to, an unincorporated nonprofit association as defined in Chapter 17 and an unincorporated professional association as defined in Page 204 HB267 Enrolled Article 1 of Chapter 30.

provided that a restated certificate of formation and an amendment of an original or restated certificate of formation shall not be deemed to be a certificate of formation Page 205 HB267 Engrossed for purposes of Section 10A-1-4.31.

Duly authenticated by Page 205 HB267 Enrolled the proper officer or filing officer of the jurisdiction the laws of which govern the internal affairs of an entity.

(A) the continuance of a domestic entity as a foreign Page 206 HB267 Engrossed entity of any type;

An entity resulting from a Page 206 HB267 Enrolled conversion.

Page 207 HB267 Engrossed (20) DEBTOR IN BANKRUPTCY.

or (B) a comparable order under federal, state, or foreign Page 207 HB267 Enrolled law governing insolvency.

An entity governed as to its Page 208 HB267 Engrossed internal affairs by this title.

An electronic signature as Page 208 HB267 Enrolled that term is defined in the Alabama Electronic Transactions Act, Chapter 1A of Title 8, or any successor statute.

Page 209 HB267 Engrossed (34) FILING OFFICER.

Page 209 HB267 Enrolled (36) FOREIGN ENTITY.

A person or group of persons who are entitled to manage and direct the affairs of an entity pursuant to this title and the governing documents of the Page 210 HB267 Engrossed entity, except that if the governing documents of the entity or this title divide the authority to manage and direct the affairs of the entity among different persons or groups of persons according to different matters, governing authority means the person or group of persons entitled to manage and direct the affairs of the entity with respect to a matter Page 210 HB267 Enrolled under the governing documents of the entity or this title.

or (B) in the case of a foreign entity, the instruments, documents, or agreements adopted under the law of its Page 211 HB267 Engrossed jurisdiction of formation to govern the formation or the internal affairs of the entity.

Page 211 HB267 Enrolled (46) INSOLVENCY.

(D) in the case of a foreign limited liability Page 212 HB267 Engrossed partnership, the laws of the jurisdiction which govern the filing of the foreign limited liability partnership's statement of limited liability partnership or such filing in that jurisdiction;

and (E) in the case of a foreign or domestic nonfiling entity other than those entities described in subsection (C) Page 212 HB267 Enrolled or (D):

Page 213 HB267 Engrossed (55) LIMITED LIABILITY PARTNERSHIP.

or Page 213 HB267 Enrolled (B) in the case of a foreign limited partnership, the laws of its jurisdiction of formation.

(D) in the case of a nonprofit association, a person Page 214 HB267 Engrossed who, as provided in Chapter 17, may participate in the selection of persons authorized to manage the affairs of the nonprofit association or in the development of its policy.

Page 214 HB267 Enrolled (A) one or more surviving domestic entities or foreign entities;

An entity that is a nonprofit Page 215 HB267 Engrossed corporation, nonprofit association, or other entity that is organized solely for one or more nonprofit purposes.

A corporation, limited partnership, Page 215 HB267 Enrolled general partnership, limited liability company, business trust, real estate investment trust, joint venture, joint stock company, cooperative, association, or other organization, including, regardless of its organizational form, a bank, insurance company, credit union, and savings and loan association, whether for profit, not for profit, nonprofit, domestic, or foreign.

An owner's interest in an Page 216 HB267 Engrossed entity.

Page 216 HB267 Enrolled (70) PARENT or PARENT ENTITY.

The term does not include a domestic entity or foreign entity Page 217 HB267 Engrossed that is not to be combined into or with one or more domestic entities or foreign entities, regardless of whether ownership interests of the entity are to be issued under the plan of merger.

An individual, including the estate of an incompetent or deceased individual, or an entity, whether Page 217 HB267 Enrolled created by the laws of this state or another state or foreign country, including, without limitation, a general partnership, limited liability partnership, limited partnership, limited liability limited partnership, limited liability company, corporation, professional corporation, nonprofit corporation, professional association, trustee, personal representative, fiduciary, as defined in Section 19-3-150 or person performing in any similar capacity, business trust, estate, trust, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

Page 218 HB267 Engrossed (78) PROFESSIONAL ASSOCIATION.

Page 218 HB267 Enrolled (81) PROFESSIONAL SERVICE.

or (B) to attach to or logically associate with an Page 219 HB267 Engrossed electronic transmission an electronic sound, symbol, or process, and includes an electronic signature in an electronic transmission.

Includes, when referring to a part of the United States, a state or commonwealth, and its agencies and governmental subdivisions, and a territory or possession, and Page 219 HB267 Enrolled its agencies and governmental subdivisions, of the United States.

A person who serves as a trustee of a Page 220 HB267 Engrossed trust, including a real estate investment trust.

(A) The individual designated as vice president of an Page 220 HB267 Enrolled entity under the governing documents of the entity;

Page 221 HB267 Engrossed (e) Chapter 5A and the provisions of Chapter 1 to the extent applicable to limited liability companies may be cited as the Alabama Limited Liability Company Law.

Page 221 HB267 Enrolled (g) Chapter 9A and the provisions of Chapter 1 to the extent applicable to limited partnerships may be cited as the Alabama Limited Partnership Law.

(j) Chapter 17 and the provisions of Chapter 1 to the extent applicable to unincorporated nonprofit associations may be cited as the Alabama Unincorporated Nonprofit Association Law." "§10A-1-3.32 (a) This section applies to domestic entities other than (i) corporations formed pursuant to or governed by Chapter 2A or Chapter 4, and real estate investment trusts formed pursuant to or governed by Chapter 10, each of which is governed by the separate recordkeeping requirements and record inspections provisions of Chapter 2A and (ii) nonprofit corporations formed pursuant to or governed by Chapter 3 or Page 222 HB267 Engrossed Chapter 3A, limited liability companies formed pursuant to or governed by Chapter 5A, general partnerships formed pursuant to or governed by Chapter 8A, and limited partnerships formed pursuant to or governed by Chapter 9A, each of which are governed by the separate recordkeeping requirements and record inspection provisions set forth in each entity's respective Page 222 HB267 Enrolled chapter governing that entity.

(d) Any agent or governing person of a domestic entity who, without reasonable cause, refuses to allow any owner or member or the owner's or member's agent or legal counsel to inspect any books or records of that entity shall be personally liable to the agent or member for a penalty in an amount not to exceed 10 percent of the fair market value of Page 223 HB267 Engrossed the ownership interest of the owner or member, in addition to any other damages or remedy." "§10A-1-8.01 (a) A conversion of an entity may be accomplished as provided in this section:

Page 223 HB267 Enrolled (1) must include the following:

(b) In connection with a conversion, rights or securities of or interests in a converting entity may be exchanged for or converted into cash, property, or rights or securities of or interests in the converted entity, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or Page 224 HB267 Engrossed interests in another entity, or may be cancelled.

The terms and conditions of a plan of conversion of a corporation, other than a nonprofit corporation, If a Page 224 HB267 Enrolled corporation is governed by Chapter 2A and that corporation is a converting entity, the plan of conversion under subsection (a) must be approved in accordance with the procedures and by the stockholder vote required by Article 9 of Chapter 2A.

The terms and conditions of a plan of conversion of a nonprofit corporation must be approved by all the nonprofit corporation's members entitled to vote thereon, if it is a nonprofit corporation with members with voting rights, Page 225 HB267 Engrossed or as otherwise provided in the nonprofit corporation's governing documents;

If the converting nonprofit corporation has no members, or no members entitled to vote thereon, the terms and conditions of the plan of conversion Page 225 HB267 Enrolled must be approved by a unanimous vote of the board of directors of the converting nonprofit corporation, or as otherwise provided in the governing documents;

No conversion of a limited partnership to a general partnership may be effected without the consent in writing of each limited partner who will have personal liability with respect to the converted entity, notwithstanding any provision in the limited partnership agreement of the converting limited Page 226 HB267 Engrossed partnership providing for approval of the conversion by less than all partners.

The terms and conditions of a plan of conversion of a limited liability Page 226 HB267 Enrolled company must be approved by all of the limited liability company's members or as otherwise provided in the limited liability company's governing documents.

No conversion of a limited liability partnership to a general or limited partnership may be effected without the consent in writing of each partner who will have personal liability with respect to the converted entity, notwithstanding any provision in the partnership agreement of the converting limited liability partnership providing for Page 227 HB267 Engrossed less than unanimous partner approval for the conversion.

If a general partnership is the converting entity and that general partnership does not have an effective statement of partnership, statement of not for Page 227 HB267 Enrolled profit partnership, or statement of limited liability partnership on file with the Secretary of State, then that general partnership must, before proceeding with a conversion deliver to the Secretary of State for filing, a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership simultaneously with the delivery to the Secretary of State for filing, of a statement of conversion.

Page 228 HB267 Engrossed (6) OTHER ENTITY.

No conversion of any entity shall be effected without the consent in writing of any owner of the converting entity who has limited liability and who shall become an owner without limited liability protection Page 228 HB267 Enrolled of the converted entity.

and Page 229 HB267 Engrossed d.

(c) In connection with a conversion, rights or securities of or interests in a converting entity may be Page 229 HB267 Enrolled exchanged for or converted into cash, property, or rights or securities of or interests in the converted entity, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another entity or may be cancelled.

the date of the filing of the certificate of Page 230 HB267 Engrossed formation of the converting entity, if any, and all prior amendments and the filing office or offices, if any, where such is filed;

d.(C) the name and type of entity of the converted Page 230 HB267 Enrolled entity and the jurisdiction of its governing statute;

and (2) if the converted entity is (I) a filing entity, the converting entity shall deliver to the Secretary of State for filing a certificate of formation or (II) a general partnership, the converting entity shall deliver to the Secretary of State for filing a statement of partnership, a Page 231 HB267 Engrossed statement of not for profit partnership, or a statement of limited liability partnership, as applicable, which certificate of formation or statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable, must include, in addition to the information required in the chapter governing Page 231 HB267 Enrolled the certificate of formation of the converted entity, the following:

Page 232 HB267 Engrossed (3) if the converting entity is required pursuant to subsections (e)(2) and (3) to deliver to the Secretary of State for filing both (I) a statement of conversion and (II)(A) a certificate of formation, or (B) a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable, Page 232 HB267 Enrolled then the converting entity shall deliver the statement of conversion and the certificate of formation or the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable, to the Secretary of State simultaneously;

Page 233 HB267 Engrossed (1) if the converted entity is a domestic filing entity, the effective date determined in accordance with Article 4 of this chapter;

Page 233 HB267 Enrolled (g) When a conversion becomes effective:

(5) except as otherwise provided in the statement of Page 234 HB267 Engrossed conversion, the terms and conditions of the statement of conversion take effect;

(6) except as otherwise agreed, for all purposes of the laws of this state, the converting entity shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed Page 234 HB267 Enrolled to constitute a dissolution of the converting entity;

Page 235 HB267 Engrossed (11) if the Secretary of State has assigned a unique identifying number or other designation to the converting entity and (i) the converted entity is formed pursuant to the laws of this state, or (ii) the converted entity is, within 30 days after the effective date of the conversion, registered to transact business in this state, then that unique identifying Page 235 HB267 Enrolled number or other designation shall continue to be assigned to the converted entity;

(1) the converting entity is a filing entity, a general partnership with an effective statement of partnership, statement of not for profit partnership, or statement of Page 236 HB267 Engrossed limited liability partnership on file with the Secretary of State, a foreign filing entity registered to transact business or not for profit activity in this state, or a qualified foreign limited liability partnership;

(2) the converted entity will be a filing entity, a general partnership with an effective statement of Page 236 HB267 Enrolled partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, a foreign filing entity registered to transact business or not for profit activity in this state, or a qualified foreign limited liability partnership;

The judge of probate shall, however, be entitled to collect a Page 237 HB267 Engrossed filing fee of five dollars ($5).

Any filing shall evidence chain of title, but lack of filing shall not affect the converted entity's title to the real property." "§10A-1-8.02 (a) A merger of two or more entities, whether the other entity or entities are the same or another form of entity, may Page 237 HB267 Enrolled be accomplished as provided in this section.

and Page 238 HB267 Engrossed (2) may include other provisions relating to the merger not prohibited by law.

(b) In connection with a merger, rights or securities of or interests in a merged entity may be exchanged for or converted into cash, property, or rights or securities of or interests in the surviving entity, or, in addition to or in Page 238 HB267 Enrolled lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another entity, or may be cancelled.

No merger of a corporation into a general or limited partnership may be effected without the consent in writing of each stockholder who will have personal liability with respect to the surviving entity, notwithstanding any provision in the governing documents of the corporation that is a party to the merger providing for less than unanimous stockholder approval for the Page 239 HB267 Engrossed conversion.

In the case of a nonprofit corporation that is a party to the merger, a plan of merger must be approved by all Page 239 HB267 Enrolled the nonprofit corporation's members entitled to vote thereon, if it is a nonprofit corporation with members with voting rights, or as otherwise provided in the nonprofit corporation's governing documents;

In the case of a limited Page 240 HB267 Engrossed partnership that is a party to the merger, a plan of merger under subsection (a) must be approved in writing by all of the partners or as otherwise provided in the partnership agreement.

No merger of a limited partnership with a general partnership in which the general partnership is the surviving entity may be effected without the consent in writing of each Page 240 HB267 Enrolled limited partner who will have personal liability with respect to the surviving entity, notwithstanding any provision in the limited partnership agreement of the merging limited partnership providing for approval of the merger by less than all partners accordance with Article 10 of Chapter 9A.

In the case of a general partnership that is a party to the merger, a plan of merger under subsection (a) must be approved in writing by all of the partners or as Page 241 HB267 Engrossed otherwise provided in the partnership agreement.

No merger of a limited liability partnership into a general or limited partnership may be effected without the consent in writing of each partner who will have personal liability with respect to the surviving entity, notwithstanding any provision in the partnership agreement of the limited liability partnership Page 241 HB267 Enrolled providing for less than unanimous partner approval for a merger accordance with Article 9 of Chapter 8A.

Page 242 HB267 Engrossed (6) OTHER ENTITY.

No merger of any entity shall be effected without the consent in writing of any owner Page 242 HB267 Enrolled who has limited liability as an owner of an entity party to the merger, and who will have personal liability with respect to the surviving entity.

the terms and conditions of the merger, including the manner and basis for converting the interests in each Page 243 HB267 Engrossed entity that is a party to the merger into any combination of money, interests in the surviving entity, and other consideration as allowed by subsection (c);

and Page 243 HB267 Enrolled (2) may include other provisions relating to the merger not prohibited by law.

(1) the name, type of entity, and mailing address of the principal office of each entity that is a party to the merger, the jurisdiction of the governing statute of each Page 244 HB267 Engrossed entity that is a party to the merger, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each entity that is a party to the merger;

(2) the name, type of entity, and mailing address of the principal office of the surviving entity, the unique Page 244 HB267 Enrolled identifying number or other designation as assigned by the Secretary of State, if any, of the surviving entity, the jurisdiction of the governing statute of the surviving entity, and, if the surviving entity is created pursuant to the merger, a statement to that effect;

or (ii) if it will be a non-filing entity, any document that creates the entity that is required to be in a public writing or in the case of a general partnership, its statement of partnership, statement of not Page 245 HB267 Engrossed for profit partnership, or statement of limited liability partnership, as applicable;

(7)(6) if the surviving entity is a domestic entity that exists before the merger, any amendments provided for in the plan of merger for the organizational documents that created the domestic entity that are required to be in a Page 245 HB267 Enrolled public writing, or in the case of a general partnership, its statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable;

(f)(e) Prior to the statement of merger being delivered for filing to the Secretary of State in accordance with subsection (e)(d), all parties to the merger that are general partnerships, other than a general partnership that is created pursuant to the merger, must have on file with the Secretary of State a statement of partnership, statement of not for Page 246 HB267 Engrossed profit partnership, or statement of limited liability partnership.

(f) After a plan of merger is approved and before the merger takes effect, the plan may be amended or abandoned as provided in the plan, or if the plan does not provide for amendment or abandonment, in the same manner as required for Page 246 HB267 Enrolled the approval of the plan of merger originally.

(3) except as provided in the plan of merger, all property owned by, and every contract right possessed by, each merging entity that ceases to exist vests in the surviving entity without transfer, reversion, or impairment and the title to any property and contract rights vested by deed or Page 247 HB267 Engrossed otherwise in the surviving entity shall not revert, be in any way impaired, or be deemed to be a transfer by reason of the merger;

(4) all debts, obligations, and other liabilities of each merging entity, other than the surviving entity, are debts, obligations, and liabilities of the surviving entity, Page 247 HB267 Enrolled and neither the rights of creditors, nor any liens upon the property of any entity that is a party to the merger, shall be impaired by the merger;

(i)(A) if it is a general partnership, the statement of Page 248 HB267 Engrossed partnership, statement of not for profit partnership, or statement of limited liability partnership becomes effective;

Page 248 HB267 Enrolled (10) the interests in a merging entity that are to be converted in accordance with the terms of the merger into interests, obligations, rights to acquire interests, cash, other property, or any combination of the foregoing, are converted as provided in the plan of merger, and the former holders of interests are entitled only to the rights provided to them by those terms or to any appraisal or dissenters' rights they may have under the governing statute governing the merging entity;

(12) Service of process in an action or proceeding against a surviving foreign entity to enforce an obligation of Page 249 HB267 Engrossed a domestic entity that is a party to a merger may be made by registered mail addressed to the surviving entity at the address set forth in the statement of merger or by any method provided by the Alabama Rules of Civil Procedure.

Any notice or demand required or permitted by law to be served on a domestic entity may be served on the surviving foreign entity Page 249 HB267 Enrolled by registered mail addressed to the surviving entity at the address set forth in the statement of merger or in any other manner similar to the procedure provided by the Alabama Rules of Civil Procedure for the service of process.

(14) An owner without limited liability protection of an entity that ceases to exist as a result of a merger and who as a result of the merger becomes an owner of a surviving entity with limited liability protection remains liable for an obligation of the entity that ceases to exist incurred before Page 250 HB267 Engrossed the merger takes effect only to the extent, if any, that the owner would have been liable if the merger had not occurred.

(i) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any merged entity owned real property, Page 250 HB267 Enrolled without payment and without collection by the judge of probate of any deed or other transfer tax or fee.

(1) AUTHORIZED STOCK means the stock of all classes and Page 251 HB267 Engrossed series a corporation or foreign corporation is authorized to issue.

Page 251 HB267 Enrolled (3) CERTIFICATE OF INCORPORATION means the certificate of incorporation described in Section 10A-2A-2.02, all amendments to the certificate of incorporation, and any other documents permitted or required to be delivered for filing by a corporation with the Secretary of State under this chapter or Chapter 1 that modify, amend, supplement, restate, or replace the certificate of incorporation.

The term "certificate of Page 252 HB267 Engrossed incorporation" as used in this chapter is synonymous to the term "certificate of formation" used in Chapter 1.

(5) DELIVER or DELIVERY means any method of delivery Page 252 HB267 Enrolled used in conventional commercial practice, including delivery by hand, mail, commercial delivery, and, if authorized in accordance with Section 10A-2A-1.41, by electronic transmission.

(10) ELECTRONIC MAIL ADDRESS means a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the "local part" of the address) and a reference to an internet Page 253 HB267 Engrossed domain (commonly referred to as the "domain part" of the address), whether or not displayed, to which electronic mail can be sent or delivered.

Page 253 HB267 Enrolled (12) ELIGIBLE INTERESTS means interests or memberships.

(18) FOREIGN NONPROFIT CORPORATION means a corporation incorporated under a law other than the law of this state which would be a nonprofit corporation if incorporated under Page 254 HB267 Engrossed the law of this state.

(20) GOVERNMENTAL SUBDIVISION includes authority, Page 254 HB267 Enrolled county, district, and municipality.

(2) receives notification of it in accordance with Page 255 HB267 Engrossed Section 10A-2A-1.41;

(c) A person notifies another of a fact by taking steps Page 255 HB267 Enrolled reasonably required to inform the other person in ordinary course in accordance with Section 10A-2A-1.41, whether or not the other person knows the fact.

(e) A stockholder's knowledge, notice, or receipt of a notification of a fact relating to the corporation is not knowledge, notice, or receipt of a notification of a fact by Page 256 HB267 Engrossed the corporation solely by reason of the stockholder's capacity as a stockholder.

Page 256 HB267 Enrolled (26) MEMBERSHIP means the rights of a member in a nonprofit corporation or foreign nonprofit corporation.

(31)(30) PROCEEDING includes any civil suit and Page 257 HB267 Engrossed criminal, administrative, and investigatory action.

(32)(31) PUBLIC ORGANIC RECORD means (i) the certificate of incorporation of a corporation, foreign corporation, nonprofit corporation, or foreign nonprofit corporation, or (ii) the document, if any, the filing of which is required to create an unincorporated entity or foreign Page 257 HB267 Enrolled unincorporated entity, or which creates the unincorporated entity or foreign unincorporated entity and is required to be filed.