Authorized Stock.

Ala. Code tit. 10A, ch. 2A, art. 6, div. A

in effect

Ala. Code § 10A-2A-6.01 Authorized Stock.

10A-2A-6.01. Authorized Stock. (a) The certificate of incorporation must set forth any classes of stock and series of stock within a class, and the number of shares of stock of each class and series, that the corporation is authorized to issue. If more than one class or series of stock is authorized, the certificate of incorporation must prescribe a distinguishing designation for each class or series and, before the issuance of stock of a class or series, describe the terms, including the preferences, rights, and limitations, of that class or series. Except to the extent varied as permitted by this section, all shares of stock of a class or series must have terms, including preferences, rights, and limitations, that are identical with those of other shares of stock of the same class or series. (b) The certificate of incorporation must authorize: (1) one or more classes or series of stock that together have full voting rights, and (2) one or more classes or series of stock (which may be the same class, classes, or series as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution. (c) The certificate of incorporation may authorize one or more classes or series of stock that: (1) have special, conditional, or limited voting rights, or no right to vote, except to the extent otherwise provided by this chapter; (2) are redeemable or convertible as specified in the certificate of incorporation: (i) at the option of the corporation, the stockholder, or another person or upon the occurrence of a specified event; (ii) for cash, indebtedness, securities, or other property; and (iii) at prices and in amounts specified or determined in accordance with a formula; (3) entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative; or (4) have preference over any other class or series of stock with respect to distributions, including distributions upon the dissolution of the corporation. (d) Terms of stock may be made dependent upon facts objectively ascertainable outside the certificate of incorporation in accordance with Section 10A-2A-1.20(c). (e) Any of the terms of stock may vary among holders of the same class or series so long as those variations are expressly set forth in the certificate of incorporation. (f) The description of the preferences, rights, and limitations of classes or series of stock in subsection (c) is not exhaustive. (g) The certificate of incorporation may authorize the board of directors, without stockholder approval, to adopt resolutions, prepare and deliver certificates and certificates of designation to the Secretary of State, and take any other actions described in Section 10A-2A-6.02. (Act 2019-94, §1.)

Ala. Code § 10A-2A-6.02 Terms of Class or Series Determined by Board of Directors.

10A-2A-6.02. Terms of Class or Series Determined by Board of Directors. (a) When any corporation desires to issue any shares of stock of any class or of any series of any class of which the powers, designations, preferences, and relative, participating, optional, or other rights, if any, or the qualifications, limitations, or restrictions thereof, if any, shall not have been set forth in the certificate of incorporation or in any amendment thereto but shall be provided for in a resolution or resolutions adopted by the board of directors pursuant to authority expressly vested in it by the certificate of incorporation or any amendment thereto, a certificate of designations setting forth a copy of the board resolution or resolutions and the number of shares of stock of the class or series as to which the resolution or resolutions apply shall be executed and delivered to the Secretary of State for filing and shall become effective in accordance with Article 4 of Chapter 1. If the certificate of incorporation vests authority in the board of directors to determine the powers, designations, preferences, and relative, participating, optional, or other rights, if any, or the qualifications, limitations, or restrictions thereof, if any, of any class or series of stock, the board of directors is authorized to do so to the same extent permitted under Section 10A-2A-6.01. (b) Unless otherwise provided in any resolution or resolutions described in subsection (a), the number of shares of stock of any class or series to which the resolution or resolutions apply may be increased (but not above the total number of authorized shares of the class) or decreased (but not below the number of shares thereof then outstanding) by a certificate likewise executed and delivered to the Secretary of State for filing setting forth a statement that a specified increase or decrease therein had been authorized and directed by a resolution or resolutions likewise adopted by the board of directors. In case the number of the authorized shares shall be decreased the number of shares so specified in the certificate shall resume the status which they had prior to the adoption of the first resolution or resolutions. (c) When no shares of any authorized class or series are outstanding, either because none were issued or because no issued shares of any authorized class or series remain outstanding, a certificate setting forth a resolution or resolutions adopted by the board of directors that none of the authorized shares of that class or series are outstanding, and that none will be issued subject to the certificate of designations previously filed with respect to that class or series, may be executed and delivered to the Secretary of State for filing and shall become effective in accordance with Article 4 of Chapter 1, and when the certificate becomes effective, it shall have the effect of eliminating from the certificate of incorporation all matters set forth in the certificate of designations with respect to that class or series of stock. (d) Unless otherwise provided in the certificate of incorporation, if no shares of stock have been issued of a class or series of stock established by a resolution of the board of directors, the voting powers, designations, preferences, and relative, participating, optional, or other rights, if any, or the qualifications, limitations, or restrictions thereof, may be amended by a resolution or resolutions adopted by the board of directors. A certificate which: (1) states that no shares of the class or series have been issued; (2) sets forth a copy of the resolution or resolutions; and (3) if the designation of the class or series is being changed, indicates the original designation and the new designation, shall be executed and delivered to the Secretary of State for filing and shall become effective in accordance with Article 4 of Chapter 1. (e) When any certificate filed under this section becomes effective, it shall have the effect of amending the certificate of incorporation; except that neither the filing of that certificate nor the filing of a restated certificate of incorporation pursuant to Section 10A-2A-10.07 shall prohibit the board of directors from subsequently adopting resolutions as authorized by this section. (Act 2019-94, §1.)

Ala. Code § 10A-2A-6.03 Issued and Outstanding Stock.

10A-2A-6.03. Issued and Outstanding Stock. (a) A corporation may issue the number of shares of stock of each class or series authorized by the certificate of incorporation. Stock that is issued is outstanding stock until it is reacquired, redeemed, converted, or cancelled. (b) The reacquisition, redemption, or conversion of outstanding stock is subject to the limitations of subsection (c) and to Section 10A-2A-6.40. (c) At all times that stock of the corporation is outstanding, one or more shares of stock that together have full voting rights and one or more shares of stock that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding. (Act 2019-94, §1.)

Ala. Code § 10A-2A-6.04 Fractional Stock.

10A-2A-6.04. Fractional Stock. (a) A corporation may issue fractions of a share of stock or in lieu of doing so may: (1) pay in cash the value of fractions of a share of stock; (2) issue scrip in certificated or uncertificated form entitling the holder to receive a full share of stock upon surrendering enough scrip to equal a full share of stock; or (3) arrange for disposition of fractional stock by the holders of that stock. (b) Each certificate representing scrip must be conspicuously labeled “scrip” and must contain the information required by Section 10A-1-3.42(c). A corporation shall not issue a certificate representing scrip in bearer form. Within a reasonable time after the issuance or transfer of scrip without certificate, the corporation shall comply with the notice requirements of Section 10A-1-3.45. (c) The holder of a fractional share of stock is entitled to exercise the rights of a stockholder, including the rights to vote, to receive dividends, and to receive distributions upon dissolution. The holder of scrip is not entitled to any of these rights unless the scrip provides for them. (d) The board of directors may authorize the issuance of scrip subject to any condition, including that: (1) the scrip will become void if not exchanged for full stock before a specified date; and (2) the stock for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders. (Act 2019-94, §1; Act 2022-124, §1.)

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