(a) The board of directors of a membership nonprofit corporation may propose dissolution for submission to the members by first adopting a resolution authorizing the dissolution.
lawyer at desk

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Alabama Code 10A-3A-11.02

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • certificate of incorporation: as used in this chapter is synonymous to the term certificate of formation used in Chapter 1. See Alabama Code 10A-3A-1.02
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • Quorum: The number of legislators that must be present to do business.
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
  • writing: includes typewriting and printing on paper. See Alabama Code 1-1-1
(b) For a proposal to dissolve to be adopted, it shall then be approved by the members entitled to vote thereon. In submitting the proposal to dissolve to the members for approval, the board of directors shall recommend that the members approve the dissolution, unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation in which case the board of directors must inform the members of the basis for that determination.
(c) The board of directors may set conditions for the approval of the proposal for dissolution by the members or the effectiveness of the dissolution.
(d) If the approval of the members is to be given at a meeting, the membership nonprofit corporation shall notify each member entitled to vote on the dissolution, of the meeting of members at which the dissolution is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider dissolving the membership nonprofit corporation and how the assets of the membership nonprofit corporation will be distributed after all creditors have been paid, or how the distribution of assets will be determined.
(e) Unless the certificate of incorporation, the bylaws, or the board of directors acting pursuant to subsection (c), requires a greater vote, a greater quorum, or a vote by voting groups, adoption of the proposal to dissolve shall require the approval of the members at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the proposal to dissolve.
(f) Dissolution of a membership nonprofit corporation may also be authorized without action of the directors if all the members entitled to vote thereon shall consent in writing and a certificate of dissolution shall be delivered to the Secretary of State for filing pursuant to Section 10A-3A-11.05.
(g) In addition to the approval of the dissolution of a membership nonprofit corporation as set forth in subsections (a) through (f), the dissolution must also be approved in writing by a person or group of persons whose approval is required under the certificate of incorporation in accordance with Section 10A-3A-11.04.
  Previous section
Next section  
 Division A Contents