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Legislative updates

House Bill 202, effective January 1, 2021, provides for the formation of new benefit corporations and for existing corporations to elect to become a benefit corporation. Among other things the bill provides that in fulfilling the duties a director shall consider, in addition to the interests of stockholders generally, the separate interests of stakeholders known to be affected by the business of the corporation and that no less than annually, a benefit corporation shall prepare a benefit report addressing the efforts of the corporation during the preceding year to operate in a responsible and sustainable manner, to pursue any public benefit or benefits identified in any public benefit provision, and to consider the interests of stakeholders.
House Bill 250, effective January 1, 2020, enacts a new Alabama Business Corporation Law. Among many other changes the new law provides for incorporation, amendment, and dissolution filings to be made with the Secretary of State rather than with the county judge of probate. The new law applies to all corporations incorporated on or after January 1, 2020 and pre-existing corporations that elect to be governed by the new law. All corporations will be governed by the new law on January 1, 2021.

Case summaries

Stock Purchase Agreement
Patel v. Shah, No. 1180012, decided September 30, 2019. The Alabama Supreme Court held that an oral stock purchase agreement was exempt from the statute of frauds because it was fully performed.

Other notices

December 19, 2019 — Alabama’s Secretary of State issued a release warning the business community of a misleading letter from the “AL Certificate Service” being circulated across the state.