Voluntary Dissolution.

Ala. Code tit. 10A, ch. 3A, art. 11, div. A

in effect

Ala. Code § 10A-3A-11.01 Dissolution by Incorporators or Directors.

10A-3A-11.01. Dissolution by Incorporators or Directors. A majority of the incorporators or initial directors of a nonprofit corporation that has not commenced activity may dissolve the nonprofit corporation by delivering to the Secretary of State for filing a certificate of dissolution that sets forth: (1) the name of the nonprofit corporation; (2) the date of its incorporation; (3) that the nonprofit corporation has not commenced activity; (4) that no debt of the nonprofit corporation remains unpaid; (5) that the net assets of the nonprofit corporation remaining after winding up have been distributed; (6) that a majority of the incorporators or directors authorized the dissolution; and (7) the unique identifying number or other designation as assigned by the Secretary of State. (Act 2023-503, §1.)

Ala. Code § 10A-3A-11.02 Approval of Dissolution of Membership Nonprofit Corporations.

10A-3A-11.02. Approval of Dissolution of Membership Nonprofit Corporations. (a) The board of directors of a membership nonprofit corporation may propose dissolution for submission to the members by first adopting a resolution authorizing the dissolution. (b) For a proposal to dissolve to be adopted, it shall then be approved by the members entitled to vote thereon. In submitting the proposal to dissolve to the members for approval, the board of directors shall recommend that the members approve the dissolution, unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation in which case the board of directors must inform the members of the basis for that determination. (c) The board of directors may set conditions for the approval of the proposal for dissolution by the members or the effectiveness of the dissolution. (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 for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider dissolving the membership nonprofit corporation and how the assets of the membership nonprofit corporation will be distributed after all creditors have been paid, or how the distribution of assets will be determined. (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. (f) Dissolution of a membership nonprofit corporation may also be authorized without action of the directors if all the members entitled to vote thereon shall consent in writing and a certificate of dissolution shall be delivered to the Secretary of State for filing pursuant to Section 10A-3A-11.05. (g) In addition to the approval of the dissolution of a membership nonprofit corporation as set forth in subsections (a) through (f), the dissolution 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-11.04. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-11.03 Approval of Dissolution of Nonmembership Nonprofit Corporations.

10A-3A-11.03. Approval of Dissolution of Nonmembership Nonprofit Corporations. Except as otherwise provided in the certificate of incorporation: (1) the dissolution of a nonmembership nonprofit corporation may be approved by the board of directors; 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 is required by the certificate of incorporation in accordance with Section 10A-3A-11.04. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-11.04 Approval by Specified Person or Group of Persons.

10A-3A-11.04. Approval by Specified Person or Group of Persons. (a) The certificate of incorporation of a membership nonprofit corporation may require that a dissolution of a membership nonprofit corporation under Section 10A-3A-11.02 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 dissolution of a nonmembership nonprofit corporation under Section 10A-3A-11.03 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 subsection (a) or (b) may only be approved by the written approval of the specified person or group of persons. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-11.05 Certificate of Dissolution.

10A-3A-11.05. Certificate of Dissolution. (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 setting forth: (1) the name of the nonprofit corporation; (2) the date that dissolution was authorized; (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 duly approved in the manner required by this chapter and by the certificate of incorporation; (4) if dissolution of a nonmembership nonprofit corporation was approved in accordance with Section 10A-3A-11.03, a statement that the proposal to dissolve was duly approved in the manner required by this chapter and by the certificate of incorporation; (5) if dissolution of a nonprofit corporation was approved in accordance with Section 10A-3A-11.02 or Section 10A-3A-11.03, and the certificate of incorporation required the dissolution to also be approved by a specified person or group of persons in accordance with Section 10A-3A-11.04, a statement that the proposal to dissolve was duly approved by the manner required by this chapter and by the certificate of incorporation; and (6) the unique identifying number or other designation as assigned by the Secretary of State. (b) The certificate of dissolution shall take effect at the effective date determined in accordance with Article 4 of Chapter 1. A nonprofit corporation is dissolved upon the effective date of its certificate of dissolution. (c) For purposes of this Division A of this Article 11, “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. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-11.06 Revocation of Dissolution.

10A-3A-11.06. Revocation of Dissolution. (a) A nonprofit corporation may revoke its dissolution within 120 days after its effective date and be reinstated. (b) Revocation of dissolution and reinstatement shall be authorized in the same manner as the dissolution was authorized unless that authorization permitted revocation and reinstatement by action of the board of directors alone, in which event the board of directors may revoke the dissolution and effect the reinstatement without member action and without the action of the specified person or group of persons set forth in the certificate of incorporation in accordance with Section 10A-3A-11.04. (c) After the revocation of dissolution and reinstatement is authorized, the nonprofit corporation may revoke the dissolution and effect the reinstatement by delivering to the Secretary of State for filing a certificate of revocation of dissolution and reinstatement, together with a copy of its certificate of dissolution, that sets forth: (1) the name of the nonprofit corporation; (2) the effective date of the dissolution that was revoked; (3) the date that the revocation of dissolution and reinstatement was authorized; (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 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; (6) if member action was required to revoke the dissolution and effect the reinstatement, a statement that the revocation and reinstatement was duly approved by the members in the manner required by this chapter and by the certificate of incorporation; (7) if the action of a specified person or group of persons set forth in the certificate of incorporation in accordance with Section 10A-3A-11.04 was required to revoke the dissolution and effect the reinstatement, a statement that the revocation and reinstatement was duly approved by that specified person or group of persons in the manner required by this chapter and by the certificate of incorporation; and (8) the unique identifying number or other designation as assigned by the Secretary of State. (d) The certificate of revocation of dissolution and reinstatement shall take effect at the effective date determined in accordance with Article 4 of Chapter 1. Revocation of dissolution and reinstatement is effective upon the effective date of the certificate of revocation of dissolution and reinstatement. (e)(1) Subject to subdivision (2), upon revocation and reinstatement, the nonprofit corporation shall be deemed for all purposes to have continued its activities and affairs as if dissolution had never occurred; and each right inuring 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. (2) The rights of persons acting in reliance on the dissolution before those persons had notice of the revocation and reinstatement shall not be adversely affected by the revocation and reinstatement. (f) If the nonprofit corporation is listed in the Secretary of State’s records as a nonprofit corporation that has been dissolved, then the name of the nonprofit corporation following revocation and reinstatement shall be that nonprofit corporation name at the time of revocation and reinstatement if that nonprofit corporation name complies with Article 5 of Chapter 1 at the time of revocation and reinstatement. If that nonprofit corporation name does not comply with Article 5 of Chapter 1, the name of the nonprofit corporation following revocation and reinstatement shall be that nonprofit corporation name followed by the word “reinstated.” EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-11.07 Effect of Dissolution.

10A-3A-11.07. Effect of Dissolution. (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 activities and affairs, including: (1) collecting its assets; (2) disposing of its properties that will not be distributed in kind; (3) discharging or making provisions for discharging its liabilities; (4) distributing its remaining property as required by law, its certificate of incorporation, bylaws, and as approved when the dissolution was authorized; and (5) doing every other act necessary to wind up and liquidate its activities and affairs. (b) In winding up its activities and affairs, a dissolved nonprofit corporation may: (1) preserve the nonprofit corporation’s activities and affairs and property as a going concern for a reasonable time; (2) prosecute, defend, or settle actions or proceedings whether civil, criminal, or administrative; (3) transfer the nonprofit corporation’s assets; (4) resolve disputes by mediation or arbitration; and (5) merge or convert in accordance with Article 12 or 13 of this chapter or Article 8 of Chapter 1. (c) Dissolution of a nonprofit corporation does not: (1) transfer title to the nonprofit corporation’s property; (2) subject its directors or officers to standards of conduct different from those prescribed in Article 8 of this chapter; (3) change: (i) quorum or voting requirements for its board of directors or members; (ii) provisions for selection, resignation, or removal of its directors or officers or both; or (iii) provisions for amending its bylaws; (4) prevent commencement of a proceeding by or against the nonprofit corporation in its corporate name; (5) abate or suspend a proceeding pending by or against the nonprofit corporation on the effective date of dissolution; or (6) terminate the authority of the registered agent of the nonprofit corporation. (d) A distribution in liquidation under this section may only be made by a dissolved nonprofit corporation. (Act 2023-503, §1; Act 2024-413, §1.)

Ala. Code § 10A-3A-11.08 Known Claims Against Dissolved Nonprofit Corporation.

10A-3A-11.08. Known Claims Against Dissolved Nonprofit Corporation. (a) A dissolved nonprofit corporation may dispose of any known claims against it by following the procedures described in subsection (b) at any time after the effective date of the dissolution of the nonprofit corporation. (b) A dissolved nonprofit corporation may give written notice of the dissolution to the holder of any known claim. The notice must: (1) identify the dissolved nonprofit corporation; (2) describe the information required to be included in a claim; (3) provide a mailing address to which the claim is to be sent; (4) state the deadline, which may not be fewer than 120 days from the effective date of the notice, by which the dissolved nonprofit corporation must receive the claim; and (5) state that if not sooner barred, the claim will be barred if not received by the deadline. (c) Unless sooner barred by any other statute limiting actions, a claim against a dissolved nonprofit corporation is barred: (1) if a claimant who was given notice under subsection (b) does not deliver the claim to the dissolved nonprofit corporation by the deadline; or (2) if a claimant whose claim was rejected by the dissolved nonprofit corporation does not commence a proceeding to enforce the claim within 90 days from the effective date of the rejection notice. (d) For purposes of this section, “known claim” or “claim” includes unliquidated claims, but does not include a contingent liability that has not matured so that there is no immediate right to bring suit or a claim based on an event occurring after the effective date of dissolution. (e) Nothing in this section shall be deemed to extend any otherwise applicable statute of limitations. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-11.09 Other Claims Against Dissolved Nonprofit Corporation.

10A-3A-11.09. Other Claims Against Dissolved Nonprofit Corporation. (a) A dissolved nonprofit corporation may publish notice of its dissolution and request that persons with claims against the dissolved nonprofit corporation present them in accordance with the notice. (b) The notice authorized by subsection (a) must: (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 claim and provide a mailing address to which the claim is to be sent; and (3) state that if not sooner barred, a claim against the dissolved nonprofit corporation will be barred unless a proceeding to enforce the claim is commenced within two years after the publication of the notice. (c) If a dissolved nonprofit corporation publishes a newspaper notice in accordance with subsection (b), unless sooner barred by any other statute limiting actions, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved nonprofit corporation within two years after the publication date of the newspaper notice: (1) a claimant who was not given notice under Section 10A-3A-11.08; (2) a claimant whose claim was timely sent to the dissolved nonprofit corporation but not acted on by the dissolved nonprofit corporation; 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 corporation. (d) A claim that is not barred under this section, any other statute limiting actions, or Section 10A-3A-11.08 may be enforced: (1) against a dissolved nonprofit corporation, to the extent of its undistributed assets; and (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 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. Provision need not be made for any claim that is or is reasonably anticipated to be barred under subsection (c). (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). (g) The circuit court under subsection (e) may appoint a guardian ad litem to represent all claimants whose identities are unknown in any proceeding brought under this section. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, shall be paid by the dissolved nonprofit corporation. (h) Provision by the dissolved nonprofit corporation for security in the amount and the form ordered by the circuit court under subsection (e) shall satisfy the dissolved nonprofit corporation’s obligation with respect to claims that are contingent, have not been made known to the dissolved nonprofit corporation, or are based on an event occurring after the effective date of the dissolution of the nonprofit corporation, and those claims may not be enforced against a distributee to whom assets have been distributed by the dissolved nonprofit corporation after the effective date of the dissolution of the nonprofit corporation. (i) Nothing in this section shall be deemed to extend 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, shall not be liable for that claim. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-11.10 Director Duties.

10A-3A-11.10. Director Duties. (a) Directors shall cause the dissolved nonprofit corporation to discharge or make reasonable provision for the payment of claims and make distributions in liquidation of assets to the persons designated to receive the assets of the dissolved nonprofit corporation after payment or provision for claims. (b) Directors of a dissolved nonprofit corporation which has disposed of claims under Section 10A-3A-11.08 or Section 10A-3A-11.09 shall not be liable for breach of subsection (a) with respect to claims against the dissolved nonprofit corporation that are barred or satisfied under Section 10A-3A-11.08 or Section 10A-3A-11.09. EndFragment (Act 2023-503, §1.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026