# Alabama HB248: Alabama Business and Nonprofit Entities Code; revisions made to clarify procedures, make technical corrections, and codify common law Alabama HB248, Alabama Business and Nonprofit Entities Code; revisions made to clarify procedures, make technical corrections, and codify common law, is a 2026 Regular Session House bill sponsored by David Faulkner (Republican); status enacted, last action 2026-04-15 (Enacted) (as of 2026-10-19). - Canonical: https://policyrisk.com/state-bill/AL-HB248-2026rs - As of: 2026-10-19 - Plain-text twin of the page above; the HTML and this file carry the same facts. ## Facts - Bill: Alabama HB248 - State: Alabama - Session: 2026 Regular Session - Title: Alabama Business and Nonprofit Entities Code; revisions made to clarify procedures, make technical corrections, and codify common law - Status: enacted - Chamber: House - Introduced: 2026-01-15 - Last action: 2026-04-15, Enacted - Sponsor: David Faulkner (Republican) - Cosponsors: 0 - Subjects: Businesses & Financial Institutions - Touches household money: no - Roll calls: 6 (460 yes, 0 no in all) - Economic provisions PRIA read: 28 ## Summary No summary available. ## Bill overview: provisions PRIA read - Nonprofit members can recover inspection costs: benefit, low. Beginning August 1, 2026, membership nonprofits generally pay members’ expenses for obtaining court orders to inspect and copy specified records. A nonprofit avoids payment by proving a good-faith refusal based on reasonable doubt about the member’s inspection right. It can also avoid payment when… - Stockholders can gain election cost support: benefit, low. Corporate bylaws can require company voting materials to include stockholder-nominated director candidates. Bylaws can also provide repayment of stockholders’ costs for seeking other stockholders’ votes. Companies can set ownership, disclosure, eligibility, voting-support, and other lawful conditio… - Stockholders gain flexible ways to inspect: benefit, low. Eligible stockholders can appoint an agent or attorney to inspect records by including written authorization with their demand. Corporations can provide requested financial statements through a website, another accepted method, or a method allowed by federal securities rules. They must provide stat… - Corrected business filings protect prior reliance: benefit, low. Corrected or canceled business filings generally take effect on the original document’s effective date. A later date protects people who relied on the original filing and are harmed by the change. For those people, the change takes effect when the correction or cancellation certificate is filed. - Partners gain transfer-at-death planning options: benefit, low. Partnership agreements can require or allow all or part of a transferable interest to pass to others at death. The transfer can occur with or without payment. Any outstanding charging order—a court-ordered creditor claim against the interest—still applies after transfer. - Existing cases keep prior entity rules: benefit, low. The act takes effect August 1, 2026. Its changes do not affect civil actions or proceedings completed or pending on or before that date. Eligible nonprofits already governed by Chapter 3A around July/August 2026 can elect to keep the prior chapter rules. The election deadline is December 31, 2026,… - Existing nonprofits can keep prior rules: benefit, low. The law takes effect August 1, 2026, without affecting proceedings completed or pending on or before that date. Nonprofits already governed by Chapter 3A and existing before August 1, 2026, can choose to keep its prior rules. They must amend their charter by December 31, 2026, to make that choice.… - Corporate boards get simpler approval paperwork: benefit, low. Business and nonprofit boards can approve documents without attaching related disclosure letters, schedules, or similar materials. This applies when the relevant corporate law expressly requires board approval or action. Business corporate boards can also ratify previously approved documents. That… - Officer opportunity waivers need board approval: benefit, low. A corporate charter can limit or remove an officer’s duty to offer business opportunities to the corporation. Applying that provision to an officer requires later approval from qualified directors through the required process. The same safeguard covers specified relatives, household members, relate… - Investors must prove ownership for records: cost, low. Beginning August 1, 2026, investors not listed as record stockholders must provide ownership proof to inspect corporate records. Their demand must identify them as beneficial stockholders or unrestricted voting trust beneficial owners. They must provide documents proving that status and confirm tha… - Reporting companies lose state inspection duties: cost, low. Stockholders lose the state-law inspection and copying process for qualifying federally reporting corporations. The corporation must have faced Exchange Act section 13 or 15(d) reporting requirements for at least the preceding 12 months. It must also have filed all required reports. Federal duties… - Stockholders face tighter records access rules: cost, low. Stockholders must submit signed requests at least five business days ahead, explaining a good-faith ownership-related purpose and the records needed. Owners not listed in corporate records must supply additional required information. Corporations may reject requests tied to opposing lawsuits, redac… - Stockholders lose oppressive-conduct dissolution grounds: cost, low. Stockholders can no longer seek court-ordered dissolution based on oppressive conduct by corporate directors or controllers. The listed ground still allows dissolution for conduct that was, is, or will be illegal or fraudulent. - Business agents need more than virtual offices: cost, low. Registered agents for covered Alabama entities cannot work solely through virtual offices, mail-forwarding services, or both. Covered entities must continuously maintain an Alabama registered agent and a physical street address for legal service. These rules also cover registered foreign entities a… - Nonprofits lose lawsuits brought on their behalf: cost, low. Beginning August 1, 2026, the amended nonprofit rules bar derivative lawsuits. These are lawsuits people bring on a nonprofit’s behalf to enforce rights belonging to the nonprofit. The act does not affect proceedings completed or pending on or before August 1, 2026. - Corporate lawsuits get court and fee limits: mixed, low. Business corporations and nonprofits can name courts for covered corporate claims, narrowing where claimants can sue. Selected courts outside Alabama need a reasonable connection to the corporation. At least one Alabama court with jurisdiction must remain available for covered claims. Internal corp… - Nonprofit members get statements with limits: mixed, low. Eligible nonprofit members can receive requested financial statements through a website or another accepted method. Prepared statements using generally accepted accounting principles, and accountant reports on annual statements, must be made available. Members must give signed notice at least five… - Owners gain expense recovery, lose penalties: mixed, low. Eligible company and partnership owners can seek expedited court orders when proper inspection demands are not honored within a reasonable time. After covered court-ordered inspections, corporations, limited liability companies, and partnerships generally must pay the requester’s expenses. They can… - Businesses can fix flawed official filings: mixed, low. Beginning August 1, 2026, entities can correct or cancel filed documents containing errors or signing defects. An authorized person must submit a signed certificate identifying the problem and stating the correction or cancellation. The certificate takes effect upon filing and cannot have a delayed… - Company members face records notice deadlines: mixed, low. Limited liability company members must give 10 days’ written notice for required records, or 30 days for other books and records. Required records include member addresses, formation documents, the operating agreement, and three years of tax records and financial statements. Other-record requests n… - Entity owners get access with safeguards: mixed, low. Owners and members under the general entity rules must give signed notice at least 10 business days before inspection. Their demand must explain a good-faith ownership-related purpose and identify records directly related to it. Entities may redact unrelated details, require reasonable confidential… - Partners face purpose-based records access limits: mixed, low. Partnerships may redact record details unrelated to the requester’s purpose; agents and attorneys need written authorization to inspect. Limited partners must explain their ownership-related purpose and requested information in a detailed written demand. Qualifying former limited partners can inspe… - Nonprofit leaders gain protections with safeguards: mixed, low. Beginning August 1, 2026, nonprofit directors and officers gain protection from conflict-transaction claims after disclosed qualified-director or eligible-member approval, or fairness. Transactions involving controlling persons receive similar protections; charter-granted approval authority still r… - Company leaders gain business opportunity protections: mixed, low. Beginning August 1, 2026, directors and officers gain protection from corporate claims for taking a business opportunity themselves. Before becoming legally bound, they must disclose all known material facts and obtain a proper corporate decision declining the opportunity. Qualified directors or st… - Controlling stockholders gain protections with limits: mixed, low. Stockholders generally can vote in their own interest and owe no duties solely because they own stock. The personal-interest voting rule excludes controlling stockholders and control groups in controlling-stockholder transactions. Controllers must not intentionally use undue influence that causes a… - Corporate insiders gain conditional lawsuit protections: mixed, low. Beginning August 1, 2026, the law limits specified claims over corporate transactions involving directors, officers, or controlling owners. A director’s or officer’s interest alone cannot support sanctions when the deal is not a conflicting-interest transaction. For conflicting-interest deals, prot… - Corporate officers get time-limited liability shields: mixed, low. Corporate charters can limit liability for specified senior officers and other officers designated by board resolution. These limits do not cover acts or omissions before the charter provision takes effect. Ending an officer’s designation applies only going forward. Later amendment or repeal genera… - Alabama entities get clearer governance rules: mixed, low. Alabama law governs domestic entities’ formation and internal affairs, including owner and officer rights, duties, and liabilities. Officials can consider other states’ laws but do not breach a duty by declining to do so. The general disinterested-person standard does not apply to entities governed… ## Sponsors and cosponsors - Sponsor: David Faulkner (Republican), House ## Roll call votes | Date | Chamber | Motion | Result | Yes | No | Other | | --- | --- | --- | --- | --- | --- | --- | | 2026-04-09 | House | Faulkner motion to Concur In and Adopt Senate Amendment - Adopted Roll Call 1342 | pass | 104 | 0 | | | 2026-04-08 | Senate | Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1273 | pass | 30 | 0 | | | 2026-04-08 | Senate | Givhan motion to Adopt - Adopted Roll Call 1272 | pass | 30 | 0 | | | 2026-03-31 | House | Third Reading in House of Origin | pass | 98 | 0 | 4 | | 2026-03-31 | House | Motion to Adopt - Adopted Roll Call 1082 | pass | 96 | 0 | 2 | | 2026-03-31 | House | Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1083 | pass | 102 | 0 | 1 | ## Actions (22) - 2026-04-15: Enacted (House) - 2026-04-09: Faulkner motion to Concur In and Adopt Senate Amendment - Adopted Roll Call 1342 (House) - 2026-04-09: Ready to Enroll (House) - 2026-04-09: Enrolled (House) - 2026-04-09: Signature Requested (Senate) - 2026-04-09: Delivered to Governor (House) - 2026-04-08: Fiscal Responsibility and Economic Development 1st Amendment Offered (Senate) - 2026-04-08: Givhan motion to Adopt - Adopted Roll Call 1272 (Senate) - 2026-04-08: Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1273 (Senate) - 2026-04-07: Reported Out of Committee Second House (Senate) - 2026-04-07: Read for the Second Time and placed on the Calendar (Senate) - 2026-04-01: Read for the first time and referred to the Senate Committee on Fiscal Responsibility and Economic Development (Senate) - 2026-04-01: Pending Committee Action in Second House (Senate) - 2026-03-31: Third Reading in House of Origin (House) - 2026-03-31: Judiciary Engrossed Substitute Offered (House) - 2026-03-31: Motion to Adopt - Adopted Roll Call 1082 (House) - 2026-03-31: Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1083 (House) - 2026-03-31: Engrossed (House) - 2026-03-19: Read for the Second Time and placed on the Calendar (House) - 2026-03-18: Reported Out of Committee House of Origin (House) - 2026-01-15: Read for the first time and referred to the House Committee on Judiciary (House) - 2026-01-15: Pending Committee Action in House of Origin (House) ## Bill text - As Introduced: [PDF](https://alison.legislature.state.al.us/files/pdf/SearchableInstruments/2026RS/HB248-int.pdf) - Engrossed: [PDF](https://alison.legislature.state.al.us/files/pdf/SearchableInstruments/2026RS/HB248-eng.pdf) - Enrolled: [PDF](https://alison.legislature.state.al.us/files/pdf/SearchableInstruments/2026RS/HB248-enr.pdf) ## Related bills - HB67: Voter Information; limit cost of reproducing voter registration list; crime for misuse of personal voter information; created (enacted) - SB154: State employees, cost-of-living increase for fiscal year beginning October 1, 2026 (enacted) - SB165: Elections; municipal elections, to set qualification fee amounts, to require indigent candidates to submit documentation for fee exemption (enacted) - HB317: Firefighter distinctive license plate; fire chaplains included, penalty for violations provided for (enacted) - SB272: Open Records; use of public records relating to schools for certain solicitation purposes prohibited; redaction of certain information relating to financial tr… (enacted) - SB190: Sales Tax; to exempt Precision Ocular (enacted) ## Sources - [As Introduced (PDF)](https://alison.legislature.state.al.us/files/pdf/SearchableInstruments/2026RS/HB248-int.pdf) - [Engrossed (PDF)](https://alison.legislature.state.al.us/files/pdf/SearchableInstruments/2026RS/HB248-eng.pdf) - [Enrolled (PDF)](https://alison.legislature.state.al.us/files/pdf/SearchableInstruments/2026RS/HB248-enr.pdf) ## Related - [HB67: Voter Information; limit cost of reproducing voter registration list; crime for…](https://policyrisk.com/state-bill/AL-HB67-2026rs) - [SB154: State employees, cost-of-living increase for fiscal year beginning October 1, 2…](https://policyrisk.com/state-bill/AL-SB154-2026rs) - [SB165: Elections; municipal elections, to set qualification fee amounts, to require in…](https://policyrisk.com/state-bill/AL-SB165-2026rs) - [HB317: Firefighter distinctive license plate; fire chaplains included, penalty for vio…](https://policyrisk.com/state-bill/AL-HB317-2026rs) - [SB272: Open Records; use of public records relating to schools for certain solicitatio…](https://policyrisk.com/state-bill/AL-SB272-2026rs) - [SB190: Sales Tax; to exempt Precision Ocular](https://policyrisk.com/state-bill/AL-SB190-2026rs) - [Alabama bills](https://policyrisk.com/states/alabama/bills) - [Alabama state hub](https://policyrisk.com/states/alabama) - [All state legislation](https://policyrisk.com/state-bills) Source: PRIA, https://policyrisk.com/state-bill/AL-HB248-2026rs (as of 2026-10-19).