Code of Alabama - Title 10A: Alabama Business and Nonprofit Entities Code - Chapter 5A - Limited Liability Companies
- Article 1 General Provisions.
- Section 10A-5A-1.01 Short title
This chapter and Chapter 1, to the extent applicable to limited liability companies, shall be known and may be cited as the Alabama Limited Liability...
- Section 10A-5A-1.02 Definitions
Notwithstanding Section 10A-1-1.03, as used in this chapter, unless the context otherwise requires, the following terms mean: (a) "Certificate of formation," with respect to a...
- Section 10A-5A-1.03 Knowledge; notice
(a) A person knows a fact when the person: (1) has actual knowledge of it; or (2) is deemed to know it under law other...
- Section 10A-5A-1.04 Powers and privileges
(a) A limited liability company is a separate legal entity. A limited liability company's status for tax purposes shall not affect its status as a...
- Section 10A-5A-1.05 Governing law
(a) The law of this state governs: (1) the organization and internal affairs of a limited liability company, or series thereof; (2) the liability of...
- Section 10A-5A-1.06 Rules of construction
(a) It is the policy of this chapter and this state to give maximum effect to the principles of freedom of contract and to the...
- Section 10A-5A-1.07 Application of partnership provisions to limited liability companies; classification for federal income tax purposes
Subject to Section 10A-5A-3.01: (a) The terms "partnership" and "limited partnership," when used in any chapter or title other than the Alabama Limited Liability Company...
- Section 10A-5A-1.08 Limited liability company agreement - Scope; function; and limitations
(a) Except as otherwise provided in subsections (b) and (c): (1) the limited liability company agreement governs relations among the members as members and between...
- Section 10A-5A-1.09 Limited liability company agreement - Effect on limited liability company and persons admitted as members
(a) A limited liability company is bound by and may enforce the limited liability company agreement, whether or not the limited liability company has itself...
- Section 10A-5A-1.10 Limited liability company agreement - Effect on third parties and relationship to writings effective on behalf of limited liability company
(a) If a limited liability company agreement provides for the manner in which it may be amended, including by requiring the approval of a person...
- Article 2 Formation.
- Article 3 Relations of Members to Persons Dealing with Limited Liability Company.
- Article 4 Relations of Members to Each Other and to the Limited Liability Company.
- Section 10A-5A-4.01 Admission of members
(a) The initial member or members of a limited liability company are admitted as a member or members upon the formation of the limited liability...
- Section 10A-5A-4.02 Limited liability company property
A member has no interest in any specific property of a limited liability company or a series thereof.
- Section 10A-5A-4.03 Contribution
A contribution by a member may be made to a limited liability company as agreed upon by the members. A contribution by a member associated...
- Section 10A-5A-4.04 Liability for contribution
(a) A member's obligation to make a contribution to a limited liability company, or a series thereof, is not excused by the member's death, disability,...
- Section 10A-5A-4.05 Sharing of and right to distributions before dissolution
(a) (1) All members shall share equally in any distributions made by a limited liability company before its dissolution and winding up. (2) A member...
- Section 10A-5A-4.06 Limitation on distributions and liability for improper distributions
(a)(1) A limited liability company shall not make a distribution to a member to the extent that at the time of the distribution, after giving...
- Section 10A-5A-4.07 Direction and oversight of the limited liability company
(a) The limited liability company agreement of a limited liability company may provide that the activities and affairs of the limited liability company shall be...
- Section 10A-5A-4.08 Duties of persons with direction and oversight
(a)(1) The duties a person who has the authority to direct and oversee the activities and affairs of a limited liability company owes to the...
- Section 10A-5A-4.09 Records to be kept; right of members and dissociated members to information
Notwithstanding Sections 10A-1-3.32 and 10A-1-3.33: (a) Each limited liability company shall maintain the following records: (1) A current list of the full name and last...
- Section 10A-5A-4.10 Indemnification, advancement, reimbursement, and insurance
A limited liability company, or a series thereof, may indemnify and hold harmless a member or other person, pay in advance or reimburse expenses incurred...
- Section 10A-5A-4.11 Reliance on reports and information
A member of a limited liability company shall be fully protected in relying in good faith upon the records of the limited liability company and...
- Article 5 Transferable Interests and Rights of Transferees and Creditors.
- Article 6 Member's Dissociation.
- Article 7 Dissolution, Winding Up, and Reinstatement.
- Article 8 Limited Liabiity Companies Performing Professional Services.
- Article 9 Actions by Members.
- Section 10A-5A-9.01 Direct action by members
(a) Subject to subsection (b), a member may maintain a direct action against another member or members or the limited liability company, or a series...
- Section 10A-5A-9.02 Right of derivative action
(a) A member may commence or maintain a derivative action in the right of a limited liability company to enforce a right of the limited...
- Section 10A-5A-9.03 Standing
(a) A member may commence or maintain a derivative action in the right of the limited liability company only if the member: (1) fairly and...
- Section 10A-5A-9.04 Demand
A member may commence a derivative action in the right of the limited liability company, or a series thereof, if: (a) the member first makes...
- Section 10A-5A-9.05 Pleading
In a derivative action, the complaint must state with particularity: (a) the date and content of plaintiff's demand and the response by the limited liability...
- Section 10A-5A-9.06 Stay of proceedings
For the purpose of allowing the limited liability company or the series thereof, as the case may be, time to undertake an inquiry into the...
- Section 10A-5A-9.07 Discontinuance or settlement
A derivative action may not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be...
- Section 10A-5A-9.08 Proceeds and expenses
(a) Except as otherwise provided in subsection (b): (1) any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong...
- Section 10A-5A-9.09 Applicability to foreign limited liability companies
In any derivative action in the right of a foreign limited liability company, or a series thereof, the right of a person to commence or...
- Article 10 Conversions and Mergers.
- Section 10A-5A-10.01 Conversion
(a) An organization other than a limited liability company may convert to a limited liability company, and a limited liability company may convert to an...
- Section 10A-5A-10.02 Action on plan of conversion by converting limited liability company
(a) Subject to Section 10A-5A-10.09, a plan of conversion must be consented to by all the members of a converting limited liability company. (b) Subject...
- Section 10A-5A-10.03 Filings required for conversion; effective date
(a) After a plan of conversion is approved: (1) if the converting organization is an organization formed under, or its internal affairs are governed by,...
- Section 10A-5A-10.04 Effect of conversion
(a) When a conversion takes effect: (1) all property and contract rights owned by the converting organization, or series thereof, remains vested in the converted...
- Section 10A-5A-10.05 Merger
(a) A limited liability company may merge with one or more other constituent organizations pursuant to this section, Sections 10A-5A-10.06 through 10A-5A-10.08, and a plan...
- Section 10A-5A-10.06 Action on plan of merger by constituent limited liability company
(a) Subject to Section 10A-5A-10.09, a plan of merger must be consented to by all the members of a constituent limited liability company. (b) Subject...
- Section 10A-5A-10.07 Filings required for merger; effective date
(a) After each constituent organization has approved the plan of merger, a statement of merger must be signed on behalf of: (1) each constituent limited...
- Section 10A-5A-10.08 Effect of merger
(a) When a merger becomes effective: (1) the surviving organization continues or, in the case of a surviving organization created pursuant to the merger, comes...
- Section 10A-5A-10.09 Restrictions on approval of mergers and conversions
(a) If a member of a converting or constituent limited liability company will have personal liability with respect to a converted or surviving organization, approval...
- Section 10A-5A-10.10 Article not exclusive
This article is not exclusive. This article does not preclude an entity from being converted or merged under law other than this chapter.
- Article 11 Series Provisions.
- Section 10A-5A-11.01 Series of assets
(a) If a limited liability company complies with Section 10A-5A-11.02, a limited liability company agreement may establish or provide for the establishment of one or...
- Section 10A-5A-11.02 Enforceability of obligations and expenses of series against assets
(a) Subject to subsection (b): (1) the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to a series shall be...
- Section 10A-5A-11.03 Assets of series
(a) Assets of a series may be held directly or indirectly, including being held in the name of the series or in the name of...
- Section 10A-5A-11.04 Statement of limitation on liabilities of series
The statement of limitation on liabilities of a series required by Section 10A-5A-11.02(b)(3) is sufficient regardless of whether: (a) the limited liability company has established...
- Section 10A-5A-11.05 Member's power to dissociate as a member associated with a series; wrongful dissociation
(a) A person has the power to dissociate as a member associated with a series. (b) A person's dissociation from a series is wrongful only...
- Section 10A-5A-11.06 Event causing dissociation of a member associated with a series
A person is dissociated as a member associated with a series when any of the following occurs: (a) the series has notice of the person's...
- Section 10A-5A-11.07 Effect of person's dissociation as a member
(a) A person who has dissociated as a member associated with a series shall have no right to participate in the direction and oversight of...
- Section 10A-5A-11.08 Dissolution and winding up of series
A series may be dissolved and its activities and affairs may be wound up without causing the dissolution of the limited liability company. The dissolution...
- Section 10A-5A-11.09 Event requiring dissolution
A series is dissolved and its activities and affairs shall be wound up upon the first to occur of the following: (a) the dissolution of...
- Section 10A-5A-11.10 Effect of dissolution of series
Notwithstanding Section 10A-1-9.12: (a) A dissolved series continues its existence as a series but may not carry on any activities and affairs except as is...
- Section 10A-5A-11.11 Right to wind up activities and affairs of series
(a) The person or persons designated in the limited liability company agreement to wind up the activities and affairs of the dissolved series shall wind...
- Section 10A-5A-11.12 Known claims against dissolved series
Notwithstanding Sections 10A-1-9.01 and 10A-1-9.21: (a) A dissolved series may dispose of any known claims against it by following the procedures described in subsection (b),...
- Section 10A-5A-11.13 Other claims against dissolved series
Notwithstanding Sections 10A-1-9.01 and 10A-1-9.22: (a) A dissolved series may publish notice of its dissolution and request that persons with claims against the dissolved series...
- Section 10A-5A-11.14 Application of assets in winding up series' activities and affairs
Notwithstanding Section 10A-1-9.12, upon the winding up of a series, the assets of the series shall be applied as follows: (a) Payment, or adequate provision...
- Section 10A-5A-11.15 Reinstatement after dissolution of a series
Notwithstanding Sections 10A-1-9.31 and 10A-1-9.32, a series that has been dissolved may be reinstated upon compliance with the following conditions: (a) the consent shall have...
- Section 10A-5A-11.16 Effect of reinstatement
(a) Subject to subsection (b), upon reinstatement, a series shall be deemed for all purposes to have continued its activities and affairs as if dissolution...
- Article 12 Transition Rules/Miscellaneous Provisions.
- Section 10A-5A-12.01 Application to existing relationships
(a) Before January 1, 2017, this chapter governs only: (1) a limited liability company formed on or after January 1, 2015; and (2) except as...
- Section 10A-5A-12.02 Relation to electronic signatures in global and national commerce act
This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not...
- Section 10A-5A-12.03 Interstate application
A limited liability company formed and existing under this chapter may conduct its activities and affairs, carry on its operations, and have and exercise the...
- Section 10A-5A-12.04 Savings clause
(a) Except as provided in subsection (b), the repeal of a statute by this chapter does not affect: (1) the operation of the statute or...
- Section 10A-5A-12.05 Reserved power of the state to alter or repeal chapter
All provisions of this chapter may be altered from time to time or repealed and all rights of members and agents are subject to this...
Last modified: May 3, 2021