The simple answer is: “Yes.” After all, the former Alabama Business Corporation Law also affected your business operations. However, it’s essential to understand changes in the law as we move into 2020.
Governor Ivey signed Act No. 2019-94 into law on May 1, 2019, with an effective date of January 1, 2020. However, the American Bar Association and Alabama Law Institute had been working on extensive revisions to Alabama’s previous business laws for several years.
The following corporations are affected by the new law:
- Every corporation formed after the effective date;
- All corporations existing before the effective date that choose to fall under the new law;
- All Alabama corporations on or after January 1, 2021.
Corporate filing has been centralized to the Alabama Secretary of State.
Changes that May Affect Your Business Operations
Some alterations to the law concern actions that may be taken by shareholders of a corporation:
- Unanimous written concern of stockholders is not required. Instead, written consent by the minimum number of votes needed to act at a shareholder’s meeting is enough.
- Plans for actions like a merger or disposition of corporate assets can be approved by a majority of shareholders instead of requiring two-thirds approval.
Other changes relate to the board of directors:
- Certain restrictions on the ability to change or fix the number of directors are removed.
- Requirements about the number of directors have also been eliminated.
The Business Corporation Law of 2019 did more than simply alter provisions of previous Alabama laws.
Additions to Current Alabama Law
A few of the important new provisions include:
- Allowing the board of directors to make specific changes to the corporation’s certificate of incorporation without first obtaining the shareholders’ approval.
- Permitting remote participation at shareholder meetings.
With the addition of Article 9:
- A business entity may convert to a corporation; and
- Corporations may convert to another type of organization.
Corporate laws – both old and new – can be complicated. It simply is not possible to cover all the ways your business may be affected in this article.
Learn More About How the Alabama Business Corporation Law
Whether you need to adjust existing business operations to meet the new laws or you are starting a new company, we can help.
Attorney Bruce Adams helps clients just like you with their business law questions and concerns. For a free consultation with an experienced Alabama attorney, contact us at 256-237-3339. Located in Anniston, we serve clients in Calhoun, Cleburne, Etowah, and St. Clair Counties.