Section 10-2B-14.02 Dissolution by board of directors and shareholders. - Alabama Statutes

Section 10-2B-14.02

Dissolution by board of directors and shareholders.

(a) A corporation's board of directors may propose dissolution for submission to the shareholders.

(b) For a proposal to dissolve to be adopted:

(1) The board of directors must recommend dissolution to the shareholders unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders; and

(2) The shareholders entitled to vote must approve the proposal to dissolve as provided in subsection (e).

(c) Subject to the corporation's articles of incorporation, the board of directors may condition its submission of the proposal for dissolution on any basis, except that the board of directors may not decrease the vote required for approval under subsection (e).

(d) The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with Section 10-2B-7.05. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation.

(e) Unless the articles of incorporation require a greater or lesser vote or a vote by voting groups, or the board of directors (acting pursuant to subsection (c)) requires a greater vote or a vote by voting groups, the proposal to dissolve to be adopted must be approved by each voting group entitled to vote separately on the proposal by two thirds of all the votes entitled to be cast on the proposal by that voting group; but in no case may the vote required for shareholder approval be set at less than a majority of all the votes entitled to be cast on the proposal by each voting group.

(f) In lieu of the procedure set forth in subsections (a) through (e) above, a corporation may be dissolved by the written consent of all of its shareholders, whether or not otherwise entitled to vote, without action by the corporation's board of directors.

(Acts 1994, No. 94-245, p. 343, §1.)