Business Trusts.

Ala. Code tit. 10A, ch. 16

in effect

Ala. Code § 10A-16-1.01 Definition of “Business Trust.”

10A-16-1.01. Definition of “Business Trust.” A business trust is an express trust created by a written declaration of trust whereby property is conveyed to one or more trustees, who hold and manage the same for the benefit and profit of such persons as may be or become the holders of transferable certificates evidencing the beneficial interest in the trust estate. (Acts 1961, Ex. Sess., No. 251, p. 2263, §1; §19-3-60; amended and renumbered by Act 2009-513, p. 967, §318.)

Ala. Code § 10A-16-1.02 Establishment; Lawful Purposes.

10A-16-1.02. Establishment; Lawful Purposes. A business trust may be established by a declaration of trust, duly executed by one or more trustees, for any lawful purpose including, but not limited to, acquiring, managing, improving, leasing, dealing in, selling, or otherwise alienating, mortgaging, or otherwise incumbering real and personal property of all kinds and descriptions, including dealing in, purchasing, holding, selling, and exchanging stocks, bonds, mortgages, deeds of trust, and other securities of all kinds and descriptions; receiving the income, dividends, rents, profits, and returns therefrom, and investing the same or distributing the same to the beneficial owners of the trust in accordance with the terms of the declaration of trust. (Acts 1961, Ex. Sess., No. 251, p. 2263, §2; §19-3-61; amended and renumbered by Act 2009-513, p. 967, §318.)

Ala. Code § 10A-16-1.03 Powers and Liabilities of Trustees; Liability of Trust for Acts of Trustees.

10A-16-1.03. Powers and Liabilities of Trustees; Liability of Trust for Acts of Trustees. The trustees shall hold the legal title to all property at any time belonging to the business trust. They shall have control over the property as well as the control and management of the business and affairs of the business trust. Liability to third persons for any act, omission, or obligation of a trustee of a business trust, when acting in such capacity, shall extend to the whole of the trust estate, or so much thereof as may be necessary to discharge such obligation, but no trustee shall be personally liable for any such act, omission, or obligation. The trustees shall have the powers as to the investment of the trust estate as may be set out in the declaration of trust without regard to the type of investments to which trustees generally are restricted by the provisions of Article 6 of Chapter 3 of Title 19 or otherwise. (Acts 1961, Ex. Sess., No. 251, p. 2263, §3; §19-3-62; amended and renumbered by Act 2009-513, p. 967, §318.)

Ala. Code § 10A-16-1.04 Certificate of Ownership; Liability of Beneficial Owners.

10A-16-1.04. Certificate of Ownership; Liability of Beneficial Owners. The beneficial ownership in a business trust may be evidenced by certificates issued by the trustees. These beneficial interests, whether certificated or uncertificated, shall be transferable in the same manner as stock of a corporation is transferable. No assessment shall be made against the interest of any beneficial owner, and no beneficial owner shall be personally liable for any debts or liabilities incurred by the trustees or by the business trust. (Acts 1961, Ex. Sess., No. 251, p. 2263, §4; §19-3-63; amended and renumbered by Act 2009-513, p. 967, §318.)

Ala. Code § 10A-16-1.05 Contents and Recordation of Declaration of Trust.

10A-16-1.05. Contents and Recordation of Declaration of Trust. (a) The written declaration of trust may provide for the election of successor trustees in the event of the death, resignation, and removal of a trustee and may provide for the amendment of the declaration of trust. The declaration of trust may also contain other provisions regarding the operation and administration of the business trust as may be necessary or desirable. (b) The declaration of trust shall be delivered to the Secretary of State for filing, accompanied by the filing fee in the amount prescribed by Chapter 1 for a certificate of formation. (Acts 1961, Ex. Sess., No. 251, p. 2263, §5; §19-3-64; amended and renumbered by Act 2009-513, p. 967, §318; Act 2020-73, §10.)

Ala. Code § 10A-16-1.06 Duration of Business Trust; Rules Against Perpetuities and Restraint of Alienation Not Violated.

10A-16-1.06. Duration of Business Trust; Rules Against Perpetuities and Restraint of Alienation Not Violated. A business trust shall not be deemed invalid as violating the rule against perpetuities or the law against suspension of the powers of alienation. Such trust may continue for the time as may be necessary to accomplish the purposes for which it may be created, provided the declaration of trust contains a provision that the trust may be terminated at any time by action of the trustees or by the vote of a specified percentage in interest of the beneficial owners thereof as set forth in the declaration of trust. (Acts 1961, Ex. Sess., No. 251, p. 2263, §6; §19-3-65; amended and renumbered by Act 2009-513, p. 967, §318.)

Ala. Code § 10A-16-1.07 Suits Against Trust; Property Subject to Attachment and Execution.

10A-16-1.07. Suits Against Trust; Property Subject to Attachment and Execution. A business trust may be sued for debts and other obligations incurred by the trustees in the performance of their duties under the declaration of trust and for any damages resulting from the negligence of the trustees, and its property shall be subject to attachment and execution in like manner as if it were a corporation. (Acts 1961, Ex. Sess., No. 251, p. 2263, §7; §19-3-66; amended and renumbered by Act 2009-513, p. 967, §318.)

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