(a) An organization other than a nonprofit corporation may convert to a nonprofit corporation, and a nonprofit corporation may convert to an organization other than a nonprofit corporation pursuant to this article, and a plan of conversion, if:

non profit

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Terms Used In Alabama Code 10A-3A-13.02

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Dependent: A person dependent for support upon another.
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • property: includes both real and personal property. See Alabama Code 1-1-1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
  • Statute: A law passed by a legislature.
  • writing: includes typewriting and printing on paper. See Alabama Code 1-1-1
(1) the governing statute of the organization that is not a nonprofit corporation authorizes the conversion;
(2) the law of the jurisdiction governing the converting organization and the converted organization does not prohibit the conversion; and
(3) the converting organization and the converted organization each comply with the governing statute and organizational documents applicable to that organization in effecting the conversion.
(b) A plan of conversion must be in writing and must include:

(1) the name, type of organization, and mailing address of the principal office of the converting organization and its unique identifying number or other designation as assigned by the Secretary of State, if any, before conversion;
(2) the name, type of organization, and mailing address of the principal office of the converted organization after conversion;
(3) the terms and conditions of the conversion, including the manner and basis for converting interests, if any, in the converting organization into any combination of money, interests in the converted organization, and other consideration allowed in subsection (c); and
(4) the organizational documents of the converted organization.
(c) In connection with a conversion, rights or securities of or interests, if any, in the converting organization may be exchanged for or converted into cash, property, or rights or securities of or interests, if any, in the converted organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights, securities, or interests, if any, in another organization, or may be cancelled.
(d) In addition to the requirements of subsection (b), a plan of conversion may contain any other provision not prohibited by law.
(e) Terms of a plan of conversion may be made dependent on facts objectively ascertainable outside the plan in accordance with Section 10A-3A-1.04(c).
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