Judicial Corporate Dissolution – Alabama

According to § 10-2B-14.30 of the Alabama code, the Circuit Court of Montgomery County, may dissolve a corporation if:

  • The Corporation’s articles of incorporation are filed in the circuit court of the county, or,
  • The Corporation was created by an act of the Legislature prior to the adoption of the Constitution of Alabama of 1901, or
  • The Corporation resulted from a merger or consolidation.

For judicial dissolution, it should be established in a proceeding by the Attorney General that the corporation obtained its articles of incorporation through fraud or that it continued to exceed or abuse the authority legally conferred upon it.  Moreover, it should be established in a proceeding by a shareholder that there is a deadlock in the management of the corporate affairs, or that the actions of directors of the corporation are illegal, oppressive, or fraudulent; or that the shareholders have failed to elect successors to directors whose terms have expired for a period that includes at least two consecutive annual meeting dates, or that the corporate assets are being misapplied or wasted.
Further it should be established in a proceeding by a creditor that the creditor’s claim has been reduced to judgment which returned unsatisfied, and the corporation is insolvent; or that the corporation has admitted in writing that the creditor’s claim is due and the corporation is insolvent.

A proceeding by the corporation may continue the voluntary dissolution of a corporation under court supervision.  Unless relief is sought against the shareholders individually, it is not necessary to make them parties to a proceeding to dissolve a corporation.


Inside Judicial Corporate Dissolution – Alabama