Ala. Code § 10A-8A-1.01 Short Title.
10A-8A-1.01. Short Title.
This chapter and the provisions of Chapter 1 to the extent applicable to partnerships, shall be known and may be cited as the Alabama Partnership Law.
(Act 2018-125, §7.)
General Provisions.
Ala. Code tit. 10A, ch. 8A, art. 1
in effectAla. Code § 10A-8A-1.02 Definitions.
10A-8A-1.02. Definitions.
As used in this chapter, unless the context otherwise requires, the following terms mean:
(1) BUSINESS includes every trade, occupation, and profession for profit.
(2) DISQUALIFIED PERSON means any person who is not a qualified person.
(3) DISTRIBUTION except as otherwise provided in Section 10A-8A-4.09(f), means a transfer of money or other property from a partnership to another person on account of a transferable interest.
(4) FOREIGN LIMITED LIABILITY PARTNERSHIP means a foreign partnership whose partners have limited liability for the debts, obligations, or other liabilities of the foreign partnership under a provision similar to Section 10A-8A-3.06(c).
(5) FOREIGN PARTNERSHIP means a partnership governed by the laws of a jurisdiction other than this state which would be a partnership if governed by the laws of this state. The term includes a foreign limited liability partnership.
(6) LIMITED LIABILITY PARTNERSHIP, except in the phrase “foreign limited liability partnership”, means a partnership that has filed a statement of limited liability partnership under Section 10A-8A-10.01, and does not have a similar statement in effect in any other jurisdiction.
(7) NOT FOR PROFIT ACTIVITY includes every undertaking not for profit.
(8) PARTNER means a person that:
(A) has become a partner in a partnership under Section 10A-8A-4.02 or was a partner in a partnership when the partnership became subject to this chapter; and
(B) has not dissociated as a partner under Section 10A-8A-6.01.
(9) PARTNERSHIP means an entity that is formed under this chapter or that is governed by this chapter. The term includes, for all purposes of the laws of this state, a limited liability partnership.
(10) PARTNERSHIP AGREEMENT means any agreement (whether referred to as a partnership agreement or otherwise), written, oral or implied, of the partners as to the business or not for profit activity of a partnership. The partnership agreement includes any amendments to the partnership agreement.
(11) PARTNERSHIP AT WILL means a partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking.
(12) PERSON DISSOCIATED AS A PARTNER means a person dissociated as a partner of a partnership.
(13) QUALIFIED PERSON, with respect to a partnership rendering professional services in this state, means a person authorized by this state or a regulatory authority of this state to own a transferable interest in that partnership.
(14) REQUIRED INFORMATION means the information that a partnership is required to maintain under Section 10A-8A-1.11.
(15) STATEMENT means a statement of partnership under Section 10A-8A-2.02, a statement of not for profit partnership under Section 10A-8A-2.02, a statement of authority under Section 10A-8A-3.03, a statement of denial under Section 10A-8A-3.04, a statement of dissociation under Section 10A-8A-7.04, a statement of dissolution under Section 10A-8A-8.02 or under Section 10A-8A-8.03, a certificate of reinstatement under Section 10A-8A-8.11, a statement of limited liability partnership under Section 10A-8A-10.01, a statement of cancellation under Section 10A-8A-10.01, or any other document required or permitted to be delivered to the Secretary of State for filing under this chapter, or an amendment or cancellation of any of the foregoing.
(16) TRANSFER means an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, or transfer by operation of law.
(17) TRANSFERABLE INTEREST means a partner’s right to receive distributions from a partnership.
(18) TRANSFEREE means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.
(Act 2018-125, §7; Act 2019-304, §1; Act 2021-299, §5.)
Ala. Code § 10A-8A-1.03 Knowledge and Notice.
10A-8A-1.03. Knowledge and 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 than this chapter.
(b) A person has notice of a fact when the person:
(1) knows of it;
(2) receives notice of it;
(3) has reason to know the fact from all of the facts known to the person at the time in question; or
(4) is deemed to have notice of the fact under subsection (d).
(c) A person notifies or gives notice to another person by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person knows the fact.
(d) A person is deemed to have notice of a partnership’s:
(1) statement of partnership, 90 days after a statement of partnership under Section 10A-8A-2.02 becomes effective;
(2) statement of not for profit partnership, 90 days after a statement of not for profit partnership under Section 10A-8A-2.02 becomes effective;
(3) statement of authority, with respect to:
(i) authority not involving property and
(ii) property other than real property, 90 days after a statement of authority under Section 10A-8A-3.03 becomes effective; and with respect to real property in accordance with Section 10A-8A-3.03(g);
(4) statement of denial, with respect to property other than real property, 90 days after a statement of denial under Section 10A-8A-3.04 becomes effective;
(5) dissociation, 90 days after a statement of dissociation under Section 10A-9A-7.04 becomes effective;
(6) dissolution, 90 days after a statement of dissolution under Section 10A-9A-8.02 or Section 10A-9A-8.03 becomes effective;
(7) reinstatement, 90 days after a certificate of reinstatement under Section 10A-9A-8.11 becomes effective;
(8) merger or conversion under Article 9 or under Article 8 of Chapter 1, 90 days after the statement of merger or conversion becomes effective;
(9) statement of limited liability partnership, 90 days after a statement of limited liability partnership under Section 10A-8A-10.01 becomes effective; or
(10) statement of cancellation, 90 days after a statement of cancellation under Section 10A-8A-10.01 becomes effective.
(e) A partner’s knowledge, notice, or receipt of notice of a fact relating to the partnership is effective immediately as knowledge of, notice to, or receipt of notice by the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.
(Act 2018-125, §7.)
Ala. Code § 10A-8A-1.04 Nature and Purpose.
10A-8A-1.04. Nature and Purpose.
(a) A partnership is a separate legal entity. A partnership’s status for tax purposes shall not affect its status as a separate legal entity formed under this chapter. A partnership is the same entity regardless of whether the partnership has a statement of limited liability partnership under Section 10A-8A-10.01 stating that the partnership is a limited liability partnership. A partner has no interest in any specific property of a partnership.
(b) A partnership may carry on any lawful business and may carry on any lawful not for profit activity if it complies with Section 10A-8A-2.02(b).
(Act 2018-125, §7.)
Ala. Code § 10A-8A-1.05 Powers; Indemnification.
10A-8A-1.05. Powers; Indemnification.
(a) A partnership shall possess and may exercise all the powers and privileges granted and enumerated by Chapter 1 or by any other law or by its partnership agreement, together with any powers incidental thereto, including those powers and privileges necessary or convenient to the conduct, promotion, or attainment of the business or not for profit activity of the partnership and including the power to sue, be sued, and defend in its own name and to maintain an action against a partner for harm caused to the partnership by a breach of the partnership agreement or violation of a duty to the partnership.
(b) A partnership may indemnify and hold harmless a partner or other person, pay in advance or reimburse expenses incurred by a partner or other person, and purchase and maintain insurance on behalf of a partner or other person.
(Act 2018-125, §7.)
Ala. Code § 10A-8A-1.06 Governing Law.
10A-8A-1.06. Governing Law.
(a) Except as otherwise provided in subsections (b), (c), and (d) of this section, the law of the jurisdiction in which the partnership has its principal office governs the partnership agreement and the relations among the partners and between the partners and the partnership.
(b) The law of this state governs the (i) internal affairs of a limited liability partnership, including the relations among the partners and between the partners and the partnership, (ii) the liability of a partner as a partner for the debts, obligations, or other liabilities of a limited liability partnership, and (iii) the authority of the partners of a limited liability partnership.
(c) The law of the jurisdiction in which a foreign limited liability partnership has filed its statement of limited liability partnership or similar writing governs the (i) internal affairs of that foreign limited liability partnership, including the relations among the partners and between the partners and the partnership, (ii) the liability of a partner as a partner for the debts, obligations, or other liabilities of a foreign limited liability partnership, and (iii) the authority of the partners of a foreign limited liability partnership.
(d) If (i) a partnership agreement provides for the application of the laws of this state, and (ii) the partnership delivers to the Secretary of State for filing a statement of partnership in accordance with Section 10A-8A-2.02(a), a statement of not for profit partnership in accordance with Section 10A-8A-2.02(b), or a statement of limited liability partnership in accordance with Section 10A-8A-10.01, then the partnership agreement shall be governed by and construed under the laws of this state.
(Act 2018-125, §7.)
Ala. Code § 10A-8A-1.07 Supplemental Principles of Law; Rate of Interest.
10A-8A-1.07. Supplemental Principles of Law; Rate of Interest.
(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 enforceability of partnership agreements.
(b) Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.
(c) If an obligation to pay interest arises under this chapter and the rate is not specified, the rate is the applicable federal rate as determined from time to time by the United States Treasury pursuant to 26 U.S.C. § 1274(d) or any successor law.
(d) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.
(e) The use of any gender shall be applicable to all genders. The captions contained in this chapter are for purposes of convenience only and shall not control or affect the construction of this chapter.
(f) Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto, do not apply to any interest in a partnership, including all rights, powers, and interests arising under a partnership agreement or this chapter. This provision prevails over Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto, and is expressly intended to permit the enforcement of the provisions of a partnership agreement that would otherwise be ineffective under Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto.
(g) Division E of Article 3 of Chapter 1 shall have no application to this chapter.
(h) The terms president, vice president, secretary, and treasurer, as defined in Chapter 1, shall have no application to this chapter.
(i) Section 10A-1-2.13(c) shall have no application to this chapter.
(j) Action validly taken pursuant to one provision of this chapter shall not be deemed invalid solely because it is identical or similar in substance to an action that could have been taken pursuant to some other provision of this chapter but fails to satisfy one or more requirements prescribed by such other provision.
(Act 2018-125, §7; Act 2025-281, §6.)
Ala. Code § 10A-8A-1.08 Effect of Partnership Agreement; Nonwaivable Provisions.
10A-8A-1.08. Effect of Partnership Agreement; Nonwaivable Provisions.
(a) Except as otherwise provided in subsections (b) and (c):
(1) the partnership agreement governs relations among the partners as partners and between the partners and the partnership; and
(2) to the extent the partnership agreement does not otherwise provide for a matter described in subsection (a)(1), this chapter governs the matter.
(b)(1) To the extent that, at law or in equity, a partner or other person has duties, including fiduciary duties, to a partnership or to another partner or to another person that is a party to or is otherwise bound by a partnership agreement, the partner’s or other person’s duties may be expanded or restricted or eliminated by provisions in a written partnership agreement, but the implied contractual covenant of good faith and fair dealing may not be eliminated.
(2) A written partnership agreement may provide for the limitation or elimination of any and all liabilities for breach of contract and breach of duties, including fiduciary duties, of a partner or other person to a partnership or to another partner or to another person that is a party to or is otherwise bound by a partnership agreement, but a partnership agreement may not limit or eliminate liability for any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing.
(3) A partner or other person shall not be liable to a partnership or to another partner or to another person that is a party to or is otherwise bound by a partnership agreement for breach of fiduciary duty for the partner’s or other person’s good faith reliance on the partnership agreement.
(4) A partnership agreement may provide that:
(A) a partner, dissociated partner, or transferee who fails to perform in accordance with, or to comply with the terms and conditions of, the partnership agreement shall be subject to specified penalties or specified consequences;
(B) at the time or upon the happening of events specified in the partnership agreement, a partner, dissociated partner, or transferee may be subject to specified penalties or specified consequences; and
(C) subject to Section 10A-8A-1.08(c), an act or transaction under the partnership agreement by the partnership, a partner, a dissociated partner, or a transferee is void or voidable.
(5) A penalty or consequence that may be specified under paragraph (4) of this subsection may include and take the form of reducing or eliminating the defaulting partner’s or transferee’s proportionate transferable interest in a partnership, subordinating the partner’s or transferee’s transferable interest to that of non-defaulting partners or transferees, forcing a sale of that transferable interest, forfeiting the defaulting partner’s or transferee’s transferable interest, the lending by other partners or transferees of the amount necessary to meet the defaulting partner’s or transferee’s commitment, a fixing of the value of the defaulting partner’s or transferee’s transferable interest by appraisal or by formula and redemption or sale of the transferable interest at that value, or other penalty or consequence.
(6) A written partnership agreement may supersede, in whole or in part, the provisions of Division C and Division D of Article 3 of Chapter 1.
(c) A partnership agreement may not:
(1) vary the nature of the partnership as a separate legal entity under Section 10A-8A-1.04(a);
(2) vary a partnership’s power under Section 10A-8A-1.05 to sue, be sued, and defend in its own name;
(3) vary the law applicable to a limited liability partnership under Section 10A-8A-1.06;
(4) restrict rights under this chapter of a person other than a partner, a dissociated partner, or a transferee;
(5) vary the requirements of Section 10A-8A-2.03;
(6) unreasonably restrict the right of access to books and records under Section 10A-8A-4.10, but the partnership agreement may impose reasonable restrictions on the availability and use of information obtained under those sections and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use;
(7) eliminate the implied contractual covenant of good faith and fair dealing as provided under Section 10A-8A-1.08(b)(1);
(8) eliminate or limit the liability of a partner or other person for any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing as provided under Section 10A-8A-1.08(b)(2);
(9) waive the requirements of Section 10A-8A-4.04(e);
(10) reduce the limitations period specified under Section 10A-8A-4.09(e) for an action commenced under other applicable law;
(11) waive the prohibition on issuance of a certificate of a transferable interest in bearer form under Section 10A-8A-5.02(c);
(12) vary the power of a person to dissociate as a partner under Section 10A-8A-6.02(a) except that the partnership agreement may require that the notice under Section 10A-8A-6.01(1) be in a writing or in a specific form thereof;
(13) vary the right of a court to expel a partner in the events specified in Section 10A-8A-6.01(5);
(14) vary the power of a court to decree dissolution in the circumstances specified in Section 10A-8A-8.01(4) or (5);
(15) vary the requirement to wind up the partnership’s business or not for profit activity as specified in Section 10A-8A-8.01(4), (5), (6), or (7);
(16) vary the right of a partner to approve or consent to the cancellation of a statement of limited liability partnership as specified in Section 10A-8A-10.01(m);
(17) vary the rights of a partner under Section 10A-8A-9.10; or
(18) vary the provisions of Section 10A-8A-1.14(c), (d), or (e).
(Act 2018-125, §7; Act 2024-413, §1.)
Ala. Code § 10A-8A-1.09 Partnership Agreement; Effect on Partnership and Persons Admitted as Partners.
10A-8A-1.09. Partnership Agreement; Effect on Partnership and Persons Admitted as Partners.
(a) A partnership is bound by and may enforce the partnership agreement, whether or not the partnership has itself manifested assent to the partnership agreement.
(b) A person that is admitted as a partner of a partnership becomes a party to and assents to the partnership agreement except as provided in Section 10A-8A-5.02(g).
(c) Two or more persons intending to be the initial partners of a partnership may make an agreement providing that upon the formation of the partnership, the agreement will become the partnership agreement.
(Act 2018-125, §7.)
Ala. Code § 10A-8A-1.10 Partnership Agreement; Effect on Third Parties and Relationship to Writings Effective on Behalf of Partnership.
10A-8A-1.10. Partnership Agreement; Effect on Third Parties and Relationship to Writings Effective on Behalf of Partnership.
(a) If a partnership agreement provides for the manner in which it may be amended, including by requiring the approval of a person who is not a party to the partnership agreement or the satisfaction of conditions, it may be amended only in that manner or as otherwise permitted by law, except that the approval of any person may be waived by that person and any conditions may be waived by all persons for whose benefit those conditions were intended.
(b) A partnership agreement may provide rights to any person, including a person who is not a party to the partnership agreement, to the extent set forth in the partnership agreement.
(c) The obligations of a partnership and its partners to a person in the person’s capacity as a transferee or dissociated partner are governed by the partnership agreement. A transferee and a dissociated partner are bound by the partnership agreement.
(d) If a writing that has been delivered by a partnership for filing in accordance with Chapter 1 and has become effective conflicts with a provision of the partnership agreement:
(1) the partnership agreement prevails as to partners, dissociated partners, and transferees; and
(2) the writing prevails as to other persons to the extent they reasonably rely on the writing.
(Act 2018-125, §7.)
Ala. Code § 10A-8A-1.11 Required Information.
10A-8A-1.11. Required Information.
A partnership shall maintain the following information:
(1) A current list of the full name and last known street and mailing address of each partner, in alphabetical order.
(2) Copies of any filed statement.
(3) Copies of the partnership’s federal, state, and local income tax returns and reports, if any, for the three most recent years.
(4) Copies of the then effective partnership agreement and any amendment thereto, in each case to the extent made in a writing.
(5) Copies of any financial statement of the partnership for the three most recent years.
(6) Unless contained in a partnership agreement made in a writing, a writing stating:
(A) the amount of cash, and a description and statement of the agreed value of the other benefits, contributed and agreed to be contributed by each partner;
(B) the times at which, or events on the happening of which, any additional contributions agreed to be made by each partner are to be made; and
(C) any events upon the happening of which the partnership is to be dissolved and its business or not for profit activity wound up.
(Act 2018-125, §7.)
Ala. Code § 10A-8A-1.12 Transactions of Partner with Partnership.
10A-8A-1.12. Transactions of Partner with Partnership.
A partner may lend money to and transact other business or not for profit activity with the partnership and has the same rights and obligations with respect to the loan or other transaction as a person that is not a partner.
(Act 2018-125, §7.)
Ala. Code § 10A-8A-1.13 Consent and Proxies of Partners.
10A-8A-1.13. Consent and Proxies of Partners.
Action requiring the consent of partners under this chapter may be taken without a meeting, and a partner may appoint a proxy to consent or otherwise act for the partner by signing a writing of appointment, either personally or by the partner’s attorney in fact.
(Act 2018-125, §7.)
Ala. Code § 10A-8A-1.14 Ratification or Waiver of Certain Actions and Transactions.
10A-8A-1.14. Ratification or Waiver of Certain Actions and Transactions.
(a) If a partnership agreement provides that an act or transaction is void or voidable when taken, then that act or transaction may be ratified or waived by:
(1) the partners or other persons entitled to ratify or waive that act or transaction under the partnership agreement;
(2) if the partnership agreement does not specify the approval required for the ratification or waiver, then those partners or other persons entitled to approve the amendment of the partnership agreement; or
(3) if the partnership agreement does not specify the approval required for the amendment of the partnership agreement, then all of the partners.
(b) If the void or voidable act or transaction was the issuance or transfer of any transferable interest, then for purposes of determining who may ratify or waive any act or transaction, the transferable interest purportedly issued or transferred shall be deemed not to have been issued or transferred.
(c) Any act or transaction ratified, or with respect to which the failure to comply with any requirements of the partnership agreement is waived, pursuant to this section shall be deemed validly taken at the time of the act or transaction.
(d) Upon application of the partnership, any partner, or any person claiming to be substantially and adversely affected by a ratification or waiver pursuant to this section, the designated court, and if none, the circuit court for the county in which the partnership’s principal office is located in this state, and if none in this state, in the circuit court for the county in which the partnership’s most recent registered office is located, may hear and determine the validity and effectiveness of the ratification of, or waiver with respect to, any void or voidable act or transaction effectuated pursuant to this section, and in any such application, the partnership shall be named as a party and service of the application upon the registered agent of the partnership shall be deemed to be service upon the partnership, and no other party need be joined in order for the court to adjudicate the validity and effectiveness of the ratification or waiver, and the court may make such order respecting further or other notice of the application as the court deems proper under the circumstances; provided, that nothing herein limits or affects the right to serve process in any other manner now or hereafter provided by law, and this sentence is an extension of and not a limitation upon the right otherwise existing of service of legal process upon nonresidents.
(e) The provisions of this section shall not be construed to limit the accomplishment of a ratification or waiver of a void or voidable act or transaction by other means permitted by law.
EndFragment
(Act 2024-413, §2.)
Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026