Conversions.

Ala. Code tit. 10A, ch. 3A, art. 13

in effect

Ala. Code § 10A-3A-13.01 Definitions.

10A-3A-13.01. Definitions. As used in this article, unless the context otherwise requires, the following terms mean: (1) CONVERTED ORGANIZATION means the organization into which a converting organization converts pursuant to this article. (2) CONVERTING NONPROFIT CORPORATION means a converting organization that is a nonprofit corporation. (3) CONVERTING ORGANIZATION means an organization that converts into another organization pursuant to this article. (4) GOVERNING STATUTE of an organization means the statute that governs the organization’s internal affairs. (5) ORGANIZATION means a general partnership, including a limited liability partnership; limited partnership, including a limited liability limited partnership; limited liability company; business trust; business corporation; nonprofit corporation; professional corporation; or any other person having a governing statute. The term includes domestic and foreign organizations whether or not organized for profit. (6) ORGANIZATIONAL DOCUMENTS means: (A) for a general partnership or foreign general partnership, its partnership agreement and if applicable, its registration as a limited liability partnership or a foreign limited liability partnership; (B) for a limited partnership or foreign limited partnership, its certificate of formation and partnership agreement, or comparable writings as provided in its governing statute; (C) for a limited liability company or foreign limited liability company, its certificate of formation and limited liability company agreement, or comparable writings as provided in its governing statute; (D) for a business or statutory trust or foreign business or statutory trust, its agreement of trust and declaration of trust, or comparable writings as provided in its governing statute; (E) for a business corporation or foreign business corporation, its certificate of incorporation, bylaws, and other agreements among its stockholders that are authorized by its governing statute or comparable writings as provided in its governing statute; (F) for a nonprofit corporation or foreign nonprofit corporation, its certificate of incorporation, bylaws, and other agreements that are authorized by its governing statute, or comparable writings as provided in its governing statute; (G) for a professional corporation or foreign professional corporation, its certificate of incorporation, bylaws, and other agreements among its stockholders that are authorized by its governing statute or comparable writings as provided in its governing statute; and (H) for any other organization, the basic writings that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-13.02 Conversion.

10A-3A-13.02. Conversion. (a) An organization other than a nonprofit corporation may convert to a nonprofit corporation, and a nonprofit corporation may convert to an organization other than a nonprofit corporation pursuant to this article, and a plan of conversion, if: (1) the governing statute of the organization that is not a nonprofit corporation authorizes the conversion; (2) the law of the jurisdiction governing the converting organization and the converted organization does not prohibit the conversion; and (3) the converting organization and the converted organization each comply with the governing statute and organizational documents applicable to that organization in effecting the conversion. (b) A plan of conversion must be in writing and must include: (1) the name, type of organization, and mailing address of the principal office of the converting organization and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion; (2) the name, type of organization, and mailing address of the principal office of the converted organization after conversion; (3) the terms and conditions of the conversion, including the manner and basis for converting interests, if any, in the converting organization into any combination of money, interests in the converted organization, and other consideration allowed in subsection (c); and (4) the organizational documents of the converted organization. (c) In connection with a conversion, rights or securities of or interests, if any, in the converting organization may be exchanged for or converted into cash, property, or rights or securities of or interests, if any, in the converted organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights, securities, or interests, if any, in another organization, or may be cancelled. (d) In addition to the requirements of subsection (b), a plan of conversion may contain any other provision not prohibited by law. (e) Terms of a plan of conversion may be made dependent on facts objectively ascertainable outside the plan in accordance with Section 10A-3A-1.04(c). (f) At the time of the approval of the plan of conversion in accordance with this chapter, the plan of conversion is not required to contain or have attached thereto any disclosure letter, disclosure schedules, or similar documents or instruments contemplated by the plan of conversion that modify, supplement, qualify, or make exceptions to representations, warranties, covenants, or conditions contained in the plan of conversion. (Act 2023-503, §1; Act 2025-281, §3.)

Ala. Code § 10A-3A-13.03 Action on a Plan of Conversion in a Membership Nonprofit Corporation.

10A-3A-13.03. Action on a Plan of Conversion in a Membership Nonprofit Corporation. In the case of a conversion of a membership nonprofit corporation the plan of conversion shall be adopted in the following manner: (a) The plan of conversion shall first be adopted by the board of directors. (b) The plan of conversion shall then be approved by the members entitled to vote thereon. In submitting the plan of conversion to the members for their approval, the board of directors must recommend that the members approve the plan of conversion, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make a recommendation, in which case the board of directors shall inform the members of the basis for its so proceeding. (c) The board of directors may set conditions for the approval of the plan of conversion by the members or the effectiveness of the plan of conversion. (d) If the approval of the members is to be given at a meeting, the nonprofit corporation shall notify each member entitled to vote of the meeting of members at which the plan of conversion is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan of conversion and must contain or be accompanied by a copy or summary of the plan of conversion. The notice must include or be accompanied by a copy of the organizational documents of the converted organization which are to be in writing as they will be in effect immediately after the conversion. (e) Unless the certificate of incorporation or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater quorum, approval of the plan of conversion requires (i) the approval of the members entitled to vote at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the plan of conversion, and (ii) the approval of each class of members voting as a separate voting group at a meeting at which a quorum of the voting group exists consisting of a majority of the votes entitled to be cast on the plan of conversion by that voting group. (f) In addition to the adoption and approval of the plan of conversion as required by this section, the plan of conversion must also be approved in writing by a person or group of persons, if any, whose approval is required under Section 10A-3A-13.08. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-13.04 Action on a Plan of Conversion in a Nonmembership Nonprofit Corporation.

10A-3A-13.04. Action on a Plan of Conversion in a Nonmembership Nonprofit Corporation. In the case of a conversion of a nonmembership nonprofit corporation the plan of conversion shall be adopted in the following manner: (a) The plan of conversion shall be adopted by the board of directors; and (b) A plan of conversion adopted by the board of directors under this section must also be approved in writing by a person or group of persons, if any, whose approval is required under Section 10A-3A-13.08. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-13.05 Statement of Conversion; Effectiveness.

10A-3A-13.05. Statement of Conversion; Effectiveness. (a) After a plan of conversion is approved: (1) if the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, the converting organization shall file a statement of conversion in accordance with subsection (c), which statement of conversion must be signed in accordance with Section 10A-1-4.01 and which must include: (A) the name, type of organization, and mailing address of the principal office of the converting organization, and its unique identifying number or other designation as assigned by the Secretary of State, if any; (B) a statement that the converting organization has been converted into the converted organization; (C) the name and type of organization of the converted organization and the jurisdiction of its governing statute; (D) the street and mailing address of the principal office of the converted organization; (E) the date the conversion is effective under the governing statute of the converted organization; (F) a statement that the conversion was approved as required by this chapter; (G) a statement that the conversion was approved as required by the governing statute of the converted organization; (H) a statement that a copy of the plan of conversion will be furnished by the converted organization, on request and without cost, to any owner of the converting organization; and (I) if the converted organization is a foreign organization not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-3A-13.07(b); and (2) if the converted organization is a nonprofit corporation, the converting organization shall deliver for filing a certificate of incorporation in accordance with subsection (d), which certificate of incorporation must include, in addition to the information required by Section 10A-3A-2.02: (A) a statement that the nonprofit corporation was converted from the converting organization; (B) the name and type of organization of the converting organization, the jurisdiction of the converting organization’s governing statute, and the converting organization’s unique identifying number or other designation as assigned by the Secretary of State, if any; and (C) a statement that the conversion was approved in a manner that complied with the converting organization’s governing statute. (b) A conversion becomes effective: (1) if the converted organization is a nonprofit corporation, when the certificate of incorporation takes effect; and (2) if the converted organization is not a nonprofit corporation, as provided by the governing statute of the converted organization. (c) If the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, then the converting organization shall deliver for filing the statement of conversion required under subsection (a)(1) to the Secretary of State. (d) If the converted organization is a nonprofit corporation, then, the converting organization shall deliver for filing the certificate of incorporation required under subsection (a)(2) to the Secretary of State. (e) If the converting organization is required to deliver for filing a statement of conversion and a certificate of formation or a certificate of incorporation to the Secretary of State, then the converting organization shall deliver for filing the statement of conversion and the certificate of formation or certificate of incorporation to the Secretary of State simultaneously. (f) If: (1) the converting organization is a filing entity or a foreign filing entity registered to conduct activities and affairs in this state; (2) the converted organization will be a filing entity or a foreign filing entity registered to conduct activities and affairs in this state; (3) the name of the converting organization and the converted organization are to be the same, other than words, phrases, or abbreviations indicating the type of entity; and (4) the name of the converted organization complies with Division A of Article 5 of Chapter 1 or Section 10A-1-7.07, as the case may be; then notwithstanding Division B of Article 5 of Chapter 1, no name reservation shall be required and the converted organization shall for all purposes of this title be entitled to utilize the name of the converting organization without any further action by the converting organization or the converted organization. (g) A certified copy of any document required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which the converting organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect a filing fee of five dollars ($5). Any such filing with the judge of probate shall evidence chain of title, but lack of filing shall not affect the converted organization’s title to such real property. (h) A statement of conversion is a filing instrument under Chapter 1. (i) The filing fees for a statement of conversion shall be as set forth in Chapter 1. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-13.06 Amendment of Plan of Conversion; Abandonment.

10A-3A-13.06. Amendment of Plan of Conversion; Abandonment. (a) A plan of conversion of a converting organization that is a nonprofit corporation may be amended: (1) in the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended; or (2) in the manner provided in the plan, except that if the plan has been approved by the members that were entitled to vote on, consent to, or approve of the plan, then those members are entitled to vote on, consent to, or approve of any amendment of the plan that will change: (i) the amount or kind of interests, if any, or other securities, obligations, rights to acquire interests, if any, or other securities, cash, other property, or any combination of the foregoing, to be received by the members, if any, of the converting nonprofit corporation under the plan; (ii) the organizational documents of the converted organization that will be in effect immediately after the conversion becomes effective, except for changes that do not require approval of the interest holders of the converted organization under its governing statute or organizational documents; or (iii) any other terms or conditions of the plan, if the change would adversely affect the members in any material respect. (b) After a plan of conversion has been approved by a converting organization that is a nonprofit corporation in the manner required by this article and before the statement of conversion becomes effective, the plan may be abandoned by the nonprofit corporation without action by its members, if any, or a person or group of persons under Section 10A-3A-13.08, in accordance with any procedures set forth in the plan or, if no procedures are set forth in the plan, in the manner determined by the board of directors. (c) If a conversion is abandoned after the statement of conversion has been delivered to the Secretary of State for filing and before the statement of conversion becomes effective, a statement of abandonment, signed by the converting organization, must be delivered to the Secretary of State for filing before the statement of conversion becomes effective. The statement of abandonment takes effect on filing, and the conversion is abandoned and does not become effective. The statement of abandonment must contain: (1) the name of the converting organization; (2) the date on which the statement of conversion was filed by the Secretary of State; and (3) a statement that the conversion has been abandoned in accordance with this section. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-13.07 Effect of Conversion.

10A-3A-13.07. Effect of Conversion. (a) When a conversion takes effect: (1) all property and contract rights owned by the converting organization remain vested in the converted organization without transfer, reversion, or impairment, and the title to any property vested by deed or otherwise in the converting organization shall not revert or be in any way impaired by reason of the conversion; (2) all debts, obligations, or other liabilities of the converting organization continue as debts, obligations, or other liabilities of the converted organization and neither the rights of creditors, nor the liens upon the property of the converting organization shall be impaired by the conversion; (3) an action or proceeding pending by or against the converting organization continues as if the conversion had not occurred and the name of the converted organization may, but need not, be substituted for the name of the converting organization in any pending action or proceeding; (4) except as prohibited by law other than this chapter, all of the rights, privileges, immunities, powers, and purposes of the converting organization remain vested in the converted organization; (5) except as otherwise provided in the plan of conversion, the terms and conditions of the plan of conversion take effect; (6) except as otherwise agreed, for all purposes of the laws of this state, the converting organization shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of the converting organization; (7) for all purposes of the laws of this state, the rights, privileges, powers, interests in property, debts, liabilities, and duties of the converting organization, shall be the rights, privileges, powers, interests in property, debts, liabilities, and duties of the converted organization, and shall not be deemed as a consequence of the conversion, to have been transferred to the converted organization; (8) if the converted organization is a nonprofit corporation, for all purposes of the laws of this state, the nonprofit corporation shall be deemed to be the same organization as the converting organization, and the conversion shall constitute a continuation of the existence of the converting organization in the form of a nonprofit corporation; (9) if the converted organization is a nonprofit corporation, the existence of the nonprofit corporation shall be deemed to have commenced on the date the converting organization commenced its existence in the jurisdiction in which the converting organization was first created, formed, organized, incorporated, or otherwise came into being; (10) the conversion shall not affect the choice of law applicable to matters arising prior to conversion; (11) if the Secretary of State has assigned a unique identifying number or other designation to the converting organization and (i) the converted organization is formed pursuant to, or its internal affairs are governed by, the laws of this state, or (ii) the converted organization is, within 30 days after the effective date of the conversion, registered to transact business in this state, then that unique identifying number or other designation shall continue to be assigned to the converted organization; and (12) the interests, if any, of the converting organization are reclassified into interests or other securities, obligations, rights to acquire interests or other securities, cash, or other property in accordance with the terms of the conversion, and the interest holders, if any, of the converting organization are entitled only to the rights provided to them by those terms and to any rights they may have under the governing statute of the converting organization. (b) A converted organization that is a foreign entity consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability for which the converting nonprofit corporation, is liable if, before the conversion, the converting nonprofit corporation was subject to suit in this state on the debt, obligation, or other liability. If a converted organization is a foreign entity and fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then service of process on that converted organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35. EndFragment (Act 2023-503, §1.)

Ala. Code § 10A-3A-13.08 Approval by Specified Person or Group of Persons.

10A-3A-13.08. Approval by Specified Person or Group of Persons. (a) The certificate of incorporation of a membership nonprofit corporation may require that a conversion under this article or under Article 8 of Chapter 1 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 conversion under this article or under Article 8 of Chapter 1 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 subsections (a) or (b) of this section 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-13.09 Nonexclusive.

10A-3A-13.09. Nonexclusive. This article is not exclusive. This article does not preclude a nonprofit corporation from converting under law other than this chapter. 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