Relationship Among Members.

Ala. Code tit. 10A, ch. 5, art. 4

in effect

Ala. Code § 10A-5-4.01 Management of the Limited Liability Company; Creation of Classes; Voting; Rights; Meetings. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017.

10A-5-4.01. Management of the Limited Liability Company; Creation of Classes; Voting; Rights; Meetings. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017. (a) Unless otherwise stated in the certificate of formation, the management of the limited liability company is vested in its members. Subject to any provisions in the operating agreement or this chapter restricting or enlarging the management rights and duties of any person or group or class of persons, the members shall have the right and authority to manage the business or affairs of the limited liability company and to make all decisions with respect thereto. (b) If the certificate of formation vests management of the limited liability company in one or more managers, then the managers shall have the power to manage the business or affairs of the limited liability company as provided in the operating agreement. Except as otherwise provided in the operating agreement, the managers: (1) Shall be designated, appointed, elected, removed, or replaced by a vote, approval, or consent of more than one-half the number of members. (2) Need not be members of the limited liability company or natural persons. (3) Unless they have been earlier removed or have earlier resigned, shall hold office until their successors have been elected and qualified. (c) The certificate of formation of a limited liability company may provide for classes or groups of members or managers having such relative rights, powers, and duties as so provided, and may make provision for the future creation of additional classes or groups of members or managers having such relative rights, powers, and duties as may be created in the manner provided in the certificate of formation, including rights, duties, and powers senior to existing classes and groups of members or managers. The certificate of formation may provide for taking action, including the amendment of the certificate of formation or operating agreement, without the vote or approval of one or more members or classes or groups of members or managers, including an action to create one or more classes of interests in the company that were not previously outstanding, but are authorized under the certificate of formation. (d) The certificate of formation may grant to all or certain identified members or managers or a specified class or group of members or managers the right to vote separately or with all or any class or group of members or managers on any matter. Voting by members or managers may be on a per capita, number, financial interest, class, group, or any other basis. (e) The governing documents may, with respect to any rights to vote, set forth provisions relating to notice of the time, place, or purpose of any meeting at which any matter is to be voted on by any members or managers or class or group of members or managers, waiver of the notice, action by consent without a meeting, establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote. (Acts 1993, No. 93-724, p. 1425, §22; Act 97-920, 1st Ex. Sess., p. 312, §1; §10-12-22; amended and renumbered by Act 2009-513, p. 967, §230.)

Ala. Code § 10A-5-4.02 Limited Liability Company Property. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017.

10A-5-4.02. Limited Liability Company Property. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017. (a) Property may be acquired, held, and conveyed in the name of the limited liability company. Any estate in real property may be acquired in the name of the limited liability company and title to any estate so acquired shall vest in the limited liability company itself rather than in the members individually. (b) All property originally contributed to the limited liability company or subsequently acquired by a limited liability company by purchase or otherwise is limited liability company property. A member has no interest in specific limited liability company property. (c) Except as provided in subsection (d), title to property of the limited liability company that is held in the name of the limited liability company may be transferred by an instrument of transfer executed by any member in the name of the limited liability company. (d) If the certificate of formation provides that management of the limited liability company is vested in a manager or managers, title to property of the limited liability company that is held in the name of the limited liability company may be transferred by an instrument of transfer executed by any manager in the name of the limited liability company; but a member, acting solely as a member, shall not have that authority. (e) Title to property of the limited liability company that is held in the name of one or more members or managers with an indication in the instrument transferring title to the property to them of their capacity as members or managers of a limited liability company or of the existence of a limited liability company, even if the name of the limited liability company is not indicated, may be transferred by an instrument of transfer executed by the persons in whose name title is held. (f) Property transferred under subsections (c), (d), and (e) may be recovered by the limited liability company if it proves that the act of the person executing the instrument of transfer did not bind the limited liability company under Section 10A-5-3.03, unless the property has been transferred by the initial transferee or a person claiming through the initial transferee to a subsequent transferee who gives value without having notice that the person who executed the instrument of initial transfer lacked authority to bind the limited liability company. (g) Title to property of the limited liability company that is held in the name of one or more persons other than the limited liability company, without an indication in the instrument transferring title to the property to them in their capacity as members or managers of a limited liability company or of the existence of a limited liability company, may be transferred free of any claims of the limited liability company or the members by the persons in whose name title is held to a transferee who gives value without having notice that it is property of a limited liability company. (Acts 1993, No. 93-724, p. 1425, §23; §10-12-23; amended and renumbered by Act 2009-513, p. 967, §230.)

Ala. Code § 10A-5-4.03 Operating Agreements. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017.

10A-5-4.03. Operating Agreements. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017. (a) The member or members of a limited liability company may enter into an operating agreement to regulate or establish the affairs of the limited liability company, the conduct of its business, and the relations of its members. An operating agreement may contain any provisions regarding the affairs of a limited liability company and the conduct of its business that are not inconsistent with the laws of this state or the articles of organization. (b) In the event there is more than one member, any operating agreement shall initially be agreed to, in writing, by all of the members. If an operating agreement does not provide for the method by which an operating agreement may be amended, then all of the members shall agree in writing to any amendment. (c) A court of equity may enforce an operating agreement by injunction or by other relief that the court in its discretion determines to be fair and appropriate in the circumstances. As an alternative to injunctive or other equitable relief, when the provisions of Section 10A-5-7.02 are applicable, the court may order dissolution of the limited liability company. (Acts 1993, No. 93-724, p. 1425, §24; Act 97-920, 1st Ex. Sess., p. 312, §1; §10-12-24; amended and renumbered by Act 2009-513, p. 967, §230.)

Ala. Code § 10A-5-4.04 Derivative Actions. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017.

10A-5-4.04. Derivative Actions. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017. (a) A member may bring an action in the right of a limited liability company to recover a judgment in its favor if the members or managers with authority to do so have refused to bring the action or if an effort to cause those members or managers to bring the action is not likely to succeed. (b) In a derivative action, the plaintiff shall be a member (1) at the time of bringing the action or have succeeded to the right of a member by operation of law or pursuant to the terms of the operating agreement from a person who was a member and (2) at the time of the transaction of which he or she complains. (c) In a derivative action, the complaint shall set forth with particularity the effort of the plaintiff to secure initiation of the action by the members or managers with authority to do so, or the reasons for not making the effort. (d) If a derivative action is successful, in whole or in part, or if anything is received by the plaintiff as a result of a judgment, compromise, or settlement of an action or claim, the court may award the plaintiff reasonable expenses, including reasonable attorney’s fees, and shall direct the plaintiff to remit to the limited liability company the remainder of those proceeds. (Acts 1993, No. 93-724, p. 1425, §25; §10-12-25; amended and renumbered by Act 2009-513, p. 967, §230.)

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