Alabama corporate bylaws are internal documents that outline the rules and procedures for the operation and management of a corporation. These cover essential aspects such as the identification of the organization, its purpose, shareholder rights and responsibilities, officer roles and election procedures, protocols for conducting meetings, record-keeping requirements, indemnification of directors and officers, and dissolution procedures.
Additionally, while it’s not mandatory to file bylaws with the Alabama Secretary of State, they should be kept as part of the corporation’s internal records and made available to shareholders and other relevant parties as needed.
Legal Requirements
Alabama law requires corporations to adopt bylaws. [1] Additionally, it’s crucial to be aware of some further legal requirements when drafting bylaws for your corporation:
- Annual Meetings – Held for electing directors, done remotely or at a location specified in the certificate of incorporation or bylaws. If the bylaws do not specify where the meeting is to be held, it is held at the corporation’s office. Failure to hold this meeting does not invalidate corporate actions. [2]
- Corporate Bylaws – Must comply with the law and the certificate of incorporation. Bylaws may include provisions allowing stockholders to nominate directors and seek reimbursement for proxy solicitation expenses, forming a binding contract with stockholders under applicable law. [3]
- Issuance of Stock – The board of directors may reserve powers to stockholders, authorize stock issuance for contributions with ensured adequate consideration, validate stock as fully paid and nonassessable upon receipt, and restrict stock issued for future services or benefits until conditions are fulfilled. [4]
Naming Considerations
- Required Words: “Corporation,” “Incorporated,” or an abbreviation thereof (choose one).
- Prohibited Words: Language suggesting that the entity is organized for an impermissible objective.
- Name Reservation Period: One year.
- Renewal Period: Renewable.
- Transferability: Yes.
Emergency Bylaws
Emergency bylaws are permissible solely in a “catastrophic event” for convening a meeting and managing corporate affairs. Following the conclusion of the catastrophic event, the regular bylaws will resume precedence. [5]
