State Legislative Updates

Alabama – New Partnership Law Authorizes New Partnership Filings

Alabama – New Partnership Law Authorizes New Partnership Filings

On January 1, 2019, a new partnership law goes into effect in Alabama. Among the new features of this law are the authorization for notice filings by for-profit general partnerships and not for profit general partnerships. These filings provide notice to the state and third parties that the general partnership exists and how to contact it. It also will make post formation transactions such as mergers or conversions easier to accomplish.

Statement of Partnership – This filing is voluntary. A general partnership for-profit can still be formed without a filing being made. However, a partnership may file a Statement of Partnership with the Secretary of State. The statement must contain the partnership’s name (which must meet the requirements of Alabama law), the date it was formed or became governed by Alabama law, the street and mailing address of its principal office, the street and mailing address of its registered office and the name of its registered agent at that office, a statement that the partnership was formed for the purpose of carrying out a for-profit business, a statement that it has two or more partners, and that the partnership agreement is governed by Alabama law and that a written partnership agreement, if it has one, has such a statement.

Statement of Not for Profit Partnership – The concept of the not for profit general partnership is new. Previously, a general partnership was defined as a for-profit entity. A not for profit general partnership must file a Statement of Not for Profit Partnership in order to be considered a nonprofit entity. The Statement contains similar information as the Statement of Partnership except it must state that the partnership was formed for the purpose of carrying out a not for profit activity. A not for profit partnership is also required to maintain a registered agent and registered office in Alabama.

For more information on the new partnership law please see House Bill 72 http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2018RS/PrintFiles/HB72-enr.pdf or Title 10A, Chapter 8A of the Alabama Code, where the new partnership act is codified. The section governing these two new statements is Sec. 10A-8A-2.02.

 

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