Unincorporated Professional Associations.

Ala. Code tit. 10A, ch. 30, art. 1

in effect

Ala. Code § 10A-30-1.01 Definitions; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.01. Definitions; Applicable to Professional Associations Formed Prior to January 1, 1984. For the purposes of this article, the following terms shall have the meanings respectively ascribed to them by this section: (1) PROFESSIONAL ASSOCIATION. An unincorporated association organized under this article for the purpose of rendering professional service. (2) PROFESSIONAL SERVICE. Any type of professional service which may be legally performed only pursuant to a license issued by a state court, state regulatory licensing board, or other like agency pursuant to state laws. (Acts 1961, No. 865, p. 1349, §1; §10-10-1; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.02 Laws Governing - Generally; Applicability of Article to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.02. Laws Governing - Generally; Applicability of Article to Professional Associations Formed Prior to January 1, 1984. (a) Professional associations organized pursuant to this article shall be governed generally by all laws governing or applicable to corporations, where applicable, and not in conflict herewith. No such association shall be held or deemed to be a partnership, nor shall such association be governed by laws relating to partnerships. (b) This chapter shall apply only to professional associations organized hereunder before January 1, 1984. (Acts 1961, No. 865, p. 1349, §16; Acts 1983, No. 83-514, §30; §10-10-2; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.03 Laws Governing - Actions; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.03. Laws Governing - Actions; Applicable to Professional Associations Formed Prior to January 1, 1984. Actions by and against a professional association organized pursuant to this article shall be governed by Article 7 of Chapter 7 of Title 6. (Acts 1961, No. 865, p. 1349, §15; §10-10-3; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.04 Formation; Restriction on Service Rendered; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.04. Formation; Restriction on Service Rendered; Applicable to Professional Associations Formed Prior to January 1, 1984. Prior to January 1, 1984, one or more persons duly licensed to practice a profession under the laws of this state may form a professional association, as distinguished from a partnership or corporation, for the purpose of carrying on a profession upon compliance with the terms of this article; provided, that no professional association organized pursuant to the provisions of this article shall render professional service in more than one type of professional service. (Acts 1961, No. 865, p. 1349, §2; Acts 1971, No. 184, p. 479; §10-10-4; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.05 Certificate of Formation; Name of Association; Dissolution; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.05. Certificate of Formation; Name of Association; Dissolution; Applicable to Professional Associations Formed Prior to January 1, 1984. Prior to January 1, 1984, person or persons may form a professional association by executing and recording the certificate of formation in the office of the judge of probate of the county in which the principal office of the association is located, and must be by the judge recorded in a book kept for that purpose. After recording the certificate of formation, the judge of probate shall endorse thereon a certificate of registration, showing the book and page where recorded, and for services for recording the certificate shall receive fifteen cents ($.15) for each 100 words of the certificate of formation and two dollars fifty cents ($2.50) for examining the certificate of formation. The person or persons forming the association shall adopt such name for the association as they in their discretion may determine, provided that the name selected shall be followed by the words “Professional Association” or the abbreviation “P.A.” Any dentist or dentists forming the association shall be governed by the rules of the regulating board of their profession in adopting a name for the association. The certificate of formation may contain any provisions not in violation of law or the public policy of this state as the members of the association may decide. The certificate of formation may be amended or dissolved at any time and from time to time by agreement of two thirds of the members at any regular meeting or at a special meeting called for that purpose, upon likewise recording an amendment or instrument of dissolution in the same place or places as the original certificate of formation. (Acts 1961, No. 865, p. 1349, §3; Acts 1971, No. 184, p. 479; §10-10-5; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.06 Purposes; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.06. Purposes; Applicable to Professional Associations Formed Prior to January 1, 1984. A professional association may be organized only for the purpose of rendering one specific kind of professional service and shall not engage in any business other than rendering the professional service for which it was organized. However, it may invest its funds in real estate, mortgages, stocks, bonds, or any other type of investment and may own real or personal property necessary or appropriate for rendering professional service. (Acts 1961, No. 865, p. 1349, §4; §10-10-6; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.07 Stock and Nonstock Associations; Nature and Transferability of Members’ Interests; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.07. Stock and Nonstock Associations; Nature and Transferability of Members’ Interests; Applicable to Professional Associations Formed Prior to January 1, 1984. A professional association organized pursuant to this article may issue stock or certificates of evidence of ownership of an interest in the assets of the professional association to the members of a stock-type association, or the association may be a nonstock organization with the members owning no individual interest in the assets of the association but with the rights and duties specified in the certificate of formation, or the association may be a nonstock organization with the members owning undivided interests in the assets of the association according to the certificate of formation. The stock or certificates of ownership, if a stock-type association, or a membership in a nonstock association, shall be freely transferable, except as may be lawfully restricted in the certificate of formation. A professional association may issue its capital stock to, if it is a stock-type association, or accept as members of the professional association, if a nonstock association, only persons who are duly licensed or otherwise legally authorized to render the same professional service as that for which the professional association was organized. Subject to the provisions of the certificate of formation, the estate of a member or shareholder who was a person duly licensed or otherwise legally authorized to render the same professional service as that for which the professional association was organized may continue to hold stock or membership pursuant to the certificate of formation for a reasonable period of administration of the estate, but shall not be authorized to participate in any decisions concerning the rendering of professional service. (Acts 1961, No. 865, p. 1349, §9; §10-10-7; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.08 Board of Governors; Officers; Bylaws; Voting by Members or Shareholders; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.08. Board of Governors; Officers; Bylaws; Voting by Members or Shareholders; Applicable to Professional Associations Formed Prior to January 1, 1984. A professional association organized pursuant to this article shall be governed by a board of governors elected by the members or shareholders and represented by officers elected by the board of governors, so that centralization of management will be assured, and no member shall have the power to bind the association within the scope of the association’s business or profession merely by virtue of being a member or shareholder of the association. Members of the board of governors need not be members or shareholders of the professional association and officers need not be members of the board of governors; except, that the president shall be a member of the board of governors; provided, that no officer or member of the board of governors who is not duly licensed to practice the profession for which the professional association was organized shall participate in any decisions constituting the practice of the profession. The members may adopt bylaws as they may deem proper, or the power to promulgate bylaws of the association may be delegated by the certificate of formation to the board of governors of the professional association, as the members or shareholders may decide. Each member or shareholder shall have the power to cast a vote or votes at the meeting of the members or shareholders as the certificate of formation shall provide. The officers of the professional association may employ agents or employees of the association as they may deem advisable subject to Section 10A-30-1.12. The officers of the association shall include a president, vice-president, secretary, treasurer, and other officers as the board of governors may determine. Any one person may serve in more than one office; provided, that the president and the secretary of the professional association shall not be the same person. (Acts 1961, No. 865, p. 1349, §7; §10-10-8; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.09 Powers; Conveyances; Exemption from Liability; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.09. Powers; Conveyances; Exemption from Liability; Applicable to Professional Associations Formed Prior to January 1, 1984. A professional association organized pursuant to the provisions of this article may contract in its own name, take, hold, and sell real and personal property in its own name, independent of its members, and sue and be sued as independent entities as now provided by law. Any conveyance in the name of the professional association to a third person executed by the president and attested by the secretary shall be conclusively presumed to be properly executed and shall divest all right, title, and interest of the professional association, its members, and the board of governors thereof. The assets of a professional association shall not be liable to attachment for the individual debts of its members or shareholders. (Acts 1961, No. 865, p. 1349, §14; §10-10-9; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.10 Furnishing of Statements to Secretary of State; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.10. Furnishing of Statements to Secretary of State; Applicable to Professional Associations Formed Prior to January 1, 1984. A professional association shall, within 30 days after the organization of the professional association pursuant to this article and within 30 days after November 1 of each year thereafter, furnish a statement to the Secretary of State showing the names and post office addresses of all members or shareholders in the professional association and shall certify that all members or shareholders are duly licensed or otherwise legally authorized to render professional service in this state. This report shall be made on such forms and shall be prescribed and furnished upon request by the Secretary of State, shall be signed by the president or vice-president of the professional association and acknowledged and sworn to before a notary public by the person signing the report and shall be filed in the office of the Secretary of State. Upon the failure or refusal of any professional association to make the return or report to the Secretary of State, the professional association shall be liable for a penalty of fifty dollars ($50), and the Secretary of State is authorized to issue his or her execution therefor, including all costs incurred. (Acts 1961, No. 865, p. 1349, §12; Acts 1989, Ex. Sess., No. 89-1005, p. 49, §1; §10-10-10; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.11 Effect of Article on Professional Relationships; Liability of Members or Shareholders; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.11. Effect of Article on Professional Relationships; Liability of Members or Shareholders; Applicable to Professional Associations Formed Prior to January 1, 1984. This article does not modify any law applicable to the relationship between a person furnishing professional services and a person receiving the service, including liability for tort arising out of such professional service and including the confidential relationship between the person rendering the professional service and the person receiving such professional service, if any; and all confidential relationships previously enjoyed under the laws of this state or hereinafter enacted shall remain inviolate. Subject to the foregoing provisions of this section, the members or shareholders of any professional association organized pursuant to this article shall not be individually liable for the debts of, or claims against, the professional association unless such member or shareholder has personally participated in the transaction for which the debt or claim is made or out of which it arises. (Acts 1961, No. 865, p. 1349, §6; §10-10-11; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.12 Professional Services to Be Rendered Only through Licensed Officers or Employees; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.12. Professional Services to Be Rendered Only through Licensed Officers or Employees; Applicable to Professional Associations Formed Prior to January 1, 1984. A professional association may render professional services only through officers, employees, and agents who are themselves duly licensed or otherwise legally authorized to render professional service within this state. The term “employee,” as used in this section, does not include clerks, bookkeepers, technicians, nurses, or other individuals who are not usually or ordinarily considered by custom and practice to be rendering professional services for which a license or other legal authorization is required in connection with the profession practiced by a particular professional association, nor does the term “employee” include any other person who performs all his or her employment under the direct supervision and control of an officer, agent, or employee who is himself or herself rendering professional service to the public on behalf of the professional association; provided, that no person shall under the guise of employment practice a profession unless duly licensed to practice that profession under the laws of this state. (Acts 1961, No. 865, p. 1349, §5; §10-10-12; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.13 Withdrawal of Members and Employees Becoming Disqualified to Practice; Proceedings to Dissolve Noncomplying Association; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.13. Withdrawal of Members and Employees Becoming Disqualified to Practice; Proceedings to Dissolve Noncomplying Association; Applicable to Professional Associations Formed Prior to January 1, 1984. If any member, shareholder, agent, or employee of a professional association becomes legally disqualified to render a professional service within the state or accepts employment or is elected to a public office that, pursuant to existing law, is a restriction or limitation upon rendering of professional service, he or she shall sever all employment with, or financial interest in, such professional association forthwith. A professional association’s failure to comply or require compliance with this section shall be a ground for the forfeiture of its right to render professional service as a professional association pursuant to this article. When a professional association’s failure to comply with this section is brought to the attention of the Secretary of State, the Secretary of State shall certify that fact to the Attorney General for appropriate action to dissolve the professional association. (Acts 1961, No. 865, p. 1349, §10; §10-10-13; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.14 Purchase of Membership or Shares of Former Member or Shareholder; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.14. Purchase of Membership or Shares of Former Member or Shareholder; Applicable to Professional Associations Formed Prior to January 1, 1984. If the governing documents of a professional association fail to fix a price at which a professional association or its members or shareholders may purchase the membership or shares of a deceased, retired, expelled, or disqualified member or shareholder and if the governing documents do not otherwise provide, then the price for such share or shares or membership shall be the book value of such share or shares or membership at the end of the month immediately preceding the death or disqualification of the member or shareholder. Book value shall be determined by an independent certified accountant employed for such purpose from the books and records of the professional association by the regular method of accounting employed by the professional association. The determination by the certified public accountant of book value shall be conclusive on the professional association and its members or shareholders. (Acts 1961, No. 865, p. 1349, §11; §10-10-14; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.15 Continuity of Association Independent of Members or Shareholders; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.15. Continuity of Association Independent of Members or Shareholders; Applicable to Professional Associations Formed Prior to January 1, 1984. Unless the certificate of formation expressly provide otherwise, a professional association shall continue as a separate entity independent of its members or shareholders for all purposes for such period of time as provided in the certificate of formation or until dissolved by a vote of two thirds of the members, and shall continue notwithstanding the death, insanity, incompetency, conviction for felony, resignation, withdrawal, transfer of membership or ownership of shares, retirement, or expulsion of any one or more of the members or shareholders, the admission or transfer of membership or shares to any new member, members, shareholder, or shareholders or the happening of any other event which, under the law of this state and under like circumstances, would work a dissolution of the partnership, it being the aim and intention of this section that such professional association shall have continuity of life independent of the life or status of its members or shareholders. (Acts 1961, No. 865, p. 1349, §8; Acts 1971, No. 184, p. 479; §10-10-15; amended and renumbered by Act 2009-513, p. 967, §370.)

Ala. Code § 10A-30-1.16 Distribution of Assets on Dissolution; Applicable to Professional Associations Formed Prior to January 1, 1984.

10A-30-1.16. Distribution of Assets on Dissolution; Applicable to Professional Associations Formed Prior to January 1, 1984. In the event of dissolution of a stock-type professional association, the board of governors, as trustees of the property of such professional association, shall apply the assets first to the payment of debts of the association and, secondly, to the holders of the stock as provided in the certificate of formation. In the event of dissolution of a nonstock-type association, the assets shall be distributed, or sold, and the net proceeds distributed first to the payment of debts of the association and, secondly, to or among the members of the association, as the certificate of formation shall provide. (Acts 1961, No. 865, p. 1349, §13; §10-10-16; amended and renumbered by Act 2009-513, p. 967, §370.)

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