Voluntary Dissolution.

Ala. Code tit. 10A, ch. 2A, art. 14, div. A

in effect

Ala. Code § 10A-2A-14.01 Dissolution by Incorporators or Initial Directors.

10A-2A-14.01. Dissolution by Incorporators or Initial Directors. A majority of the incorporators or initial directors of a corporation that has not issued stock or has not commenced business may dissolve the corporation by delivering to the Secretary of State for filing a certificate of dissolution that sets forth: (a) the name of the corporation; (b) the date of its incorporation; (c) either (i) that none of the corporation’s stock has been issued, or (ii) that the corporation has not commenced business; (d) that no debt of the corporation remains unpaid; (e) that the net assets of the corporation remaining after winding up have been distributed to the stockholders, if stock was issued; (f) that a majority of the incorporators or initial directors authorized the dissolution; and (g) the unique identifying number or other designation as assigned by the Secretary of State. (Act 2019-94, §1; Act 2020-73, §7.)

Ala. Code § 10A-2A-14.02 Dissolution by Board of Directors and Stockholders.

10A-2A-14.02. Dissolution by Board of Directors and Stockholders. (a) The board of directors may propose dissolution for submission to the stockholders by first adopting a resolution authorizing the dissolution. (b) For a proposal to dissolve to be adopted, it shall then be approved by the stockholders. In submitting the proposal to dissolve to the stockholders for approval, the board of directors shall recommend that the stockholders approve the dissolution, unless (i) the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation or (ii) Section 10A-2A-8.26 applies. If either (i) or (ii) applies, the board of directors shall inform the stockholders of the basis for its so proceeding. (c) The board of directors may set conditions for the approval of the proposal for dissolution by stockholders or the effectiveness of the dissolution. (d) If the approval of the stockholders is to be given at a meeting, the corporation shall notify each stockholder, regardless of whether entitled to vote, of the meeting of stockholders 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 corporation. (e) Unless the certificate of incorporation 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 stockholders 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 corporation may also be authorized without action of the directors if all the stockholders 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-2A-14.03. (Act 2019-94, §1.)

Ala. Code § 10A-2A-14.03 Certificate of Dissolution.

10A-2A-14.03. Certificate of Dissolution. (a) At any time after dissolution is authorized, the corporation may dissolve by delivering to the Secretary of State for filing a certificate of dissolution setting forth: (1) the name of the corporation; (2) the date that dissolution was authorized; (3) if dissolution was approved by the stockholders, a statement that the proposal to dissolve was duly approved by the stockholders in the manner required by this chapter and by the certificate of incorporation; and (4) 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 corporation is dissolved upon the effective date of its certificate of dissolution. (c) For purposes of this Division A of this Article 14, “dissolved corporation” means a corporation whose certificate of dissolution has become effective and includes a successor entity to which the remaining assets of the corporation are transferred subject to its liabilities for purposes of liquidation. (Act 2019-94, §1; Act 2020-73, §7.)

Ala. Code § 10A-2A-14.04 Revocation of Dissolution; Reinstatement.

10A-2A-14.04. Revocation of Dissolution; Reinstatement. (a) A 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 stockholder action. (c) After the revocation of dissolution and reinstatement is authorized, the 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 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 corporation’s board of directors (or incorporators) revoked the dissolution and effected the reinstatement, a statement to that effect; (5) if the corporation’s board of directors revoked a dissolution and effected the reinstatement as authorized by the stockholders, a statement that revocation and reinstatement was permitted by action by the board of directors alone pursuant to that authorization; (6) if stockholder action was required to revoke the dissolution and effect the reinstatement, a statement that the revocation and reinstatement was duly approved by the stockholders in the manner required by this chapter and by the certificate of incorporation; and (7) 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 subsection (e)(2), upon revocation and reinstatement, the corporation shall be deemed for all purposes to have continued its business as if dissolution had never occurred; and each right inuring to, and each debt, obligation, and liability incurred by, the 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 corporation is listed in the Secretary of State’s records as a corporation that has been dissolved, then the name of the corporation following revocation and reinstatement shall be that corporation name at the time of revocation and reinstatement if that corporation name complies with Article 5 of Chapter 1 at the time of revocation and reinstatement. If that corporation name does not comply with Article 5 of Chapter 1, the name of the corporation following revocation and reinstatement shall be that corporation name followed by the word “reinstated.” (Act 2019-94, §1; Act 2020-73, §7.)

Ala. Code § 10A-2A-14.05 Effect of Dissolution.

10A-2A-14.05. Effect of Dissolution. (a) A dissolved corporation continues its existence as a corporation but may not carry on any business except as is appropriate to wind up and liquidate its business and affairs, including: (1) collecting its assets; (2) disposing of its properties that will not be distributed in kind to stockholders; (3) discharging or making provisions for discharging its liabilities; (4) distributing its remaining property among its stockholders according to their interests; and (5) doing every other act necessary to wind up and liquidate its business and affairs. (b) In winding up its business and affairs, a corporation may: (1) preserve the corporation’s business 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 corporation’s assets; (4) resolve disputes by mediation or arbitration; (5) merge or convert in accordance with Article 9 or 11 of this chapter or Article 8 of Chapter 1; and (6) enter into a stock exchange in accordance with Article 11 of this chapter. (c) Dissolution of a corporation does not: (1) transfer title to the corporation’s property; (2) prevent transfer of its stock or securities; (3) subject its directors or officers to standards of conduct different from those prescribed in Article 8 of this chapter; (4) change (i) quorum or voting requirements for its board of directors or stockholders; (ii) provisions for selection, resignation, or removal of its directors or officers or both; or (iii) provisions for amending its bylaws; (5) prevent commencement of a proceeding by or against the corporation in its corporate name; (6) abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or (7) terminate the authority of the registered agent of the corporation. (d) A distribution in liquidation under this section may only be made by a dissolved corporation. For purposes of determining the stockholders entitled to receive a distribution in liquidation, the board of directors may fix a record date for determining stockholders entitled to a distribution in liquidation, which date may not be retroactive. If the board of directors does not fix a record date for determining stockholders entitled to a distribution in liquidation, the record date is the date the board of directors authorizes the distribution in liquidation. (Act 2019-94, §1; Act 2024-413, §1.)

Ala. Code § 10A-2A-14.06 Known Claims Against Dissolved Corporation.

10A-2A-14.06. Known Claims Against Dissolved Corporation. (a) A dissolved 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 corporation. (b) A dissolved corporation may give written notice of the dissolution to the holder of any known claim. The notice must: (1) identify the dissolved 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 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 corporation is barred: (1) if a claimant who was given notice under subsection (b) does not deliver the claim to the dissolved corporation by the deadline; or (2) if a claimant whose claim was rejected by the dissolved 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. (Act 2019-94, §1.)

Ala. Code § 10A-2A-14.07 Other Claims Against Dissolved Corporation.

10A-2A-14.07. Other Claims Against Dissolved Corporation. (a) A dissolved corporation may publish notice of its dissolution and request that persons with claims against the dissolved 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 corporation’s principal office is located or, if it has none in this state, in the county in which the 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 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 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 corporation within two years after the publication date of the newspaper notice: (1) a claimant who was not given notice under Section 10A-2A-14.06; (2) a claimant whose claim was timely sent to the dissolved corporation but not acted on by the dissolved corporation; and (3) a claimant whose claim is contingent at the effective date of the dissolution of the corporation, or is based on an event occurring after the effective date of the dissolution of the corporation. (d) A claim that is not barred under this section, any other statute limiting actions, or Section 10A-2A-14.06 may be enforced: (1) against a dissolved corporation, to the extent of its undistributed assets; and (2) except as provided in subsection (h), if the assets of a dissolved corporation have been distributed after dissolution, against each stockholder to the extent of the stockholder’s proportionate share of the claim or of the assets distributed to that stockholder after dissolution, whichever is less, but a stockholder’s total liability for all claims under subsection (d) may not exceed the total amount of assets distributed to that stockholder after dissolution of the corporation. (e) A dissolved corporation that published a notice under this section may file an application with the circuit court for the county in which the dissolved corporation’s principal office is located in this state and if the corporation does not have a principal office within this state, with the circuit court for the county in which the dissolved 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 corporation or that are based on an event occurring after the effective date of the dissolution of the corporation but that, based on the facts known to the dissolved corporation, are reasonably estimated to arise after the effective date of the dissolution of the 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 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 corporation. (h) Provision by the dissolved corporation for security in the amount and the form ordered by the circuit court under subsection (e) shall satisfy the dissolved corporation’s obligation with respect to claims that are contingent, have not been made known to the dissolved corporation, or are based on an event occurring after the effective date of the dissolution of the corporation, and those claims may not be enforced against a stockholder to whom assets have been distributed by the dissolved corporation after the effective date of the dissolution of the 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-2A-14.06, this section, or other law, the person or persons designated to wind up the affairs of a corporation, and the stockholders receiving assets from the dissolved corporation, shall not be liable for that claim. (Act 2019-94, §1; Act 2020-73, §7.)

Ala. Code § 10A-2A-14.08 Director Duties.

10A-2A-14.08. Director Duties. (a) Directors shall cause the dissolved corporation to discharge or make reasonable provision for the payment of claims and make distributions in liquidation of assets to stockholders after payment or provision for claims. (b) Directors of a dissolved corporation which has disposed of claims under Section 10A-2A-14.06 or Section 10A-2A-14.07 shall not be liable for breach of Section 10A-2A-14.08(a) with respect to claims against the dissolved corporation that are barred or satisfied under Section 10A-2A-14.06 or Section 10A-2A-14.07. (Act 2019-94, §1.)

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