Unincorporated nonprofit associations; decentralized associations provided for

HB483 INTRODUCED
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HB483
4UV5A3R-1
By Representatives Brinyark, Shaw
RFD: Economic Development and Tourism
First Read: 19-Feb-26
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4UV5A3R-1 02/18/2026 GP (L)lg 2026-973
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First Read: 19-Feb-26
SYNOPSIS:
This bill would authorize the formation and
operation of decentralized unincorporated nonprofit
associations as a subtype of unincorporated nonprofit
associations, which are authorized under existing law.
This bill would allow a decentralized
unincorporated nonprofit association to use distributed
ledger technology and smart contracts for its
governance and operation.
This bill would permit decentralized
unincorporated nonprofit associations to acquire and
maintain property and engage in profit-making
activities, subject to certain standards relating to
the distribution of proceeds.
This bill would provide for the duties,
obligations, and liabilities of the members and
administrators of a decentralized unincorporated
nonprofit association.
This bill would also provide for the dissolution
and winding up of a decentralized unincorporated
nonprofit association.
A BILL
TO BE ENTITLED
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TO BE ENTITLED
AN ACT
Relating to corporations, partnerships, and
associations; to designate Sections 10A-17-1.01 through
10A-17-1.18, Code of Alabama 1975, inclusive, as Article 1;
and to add Article 2, commencing with Section 10A-17-2.01, to
Chapter 17 of Title 10A of the Code of Alabama 1975; to
provide for the formation, management, and governance of
decentralized unincorporated nonprofit associations; to
provide for the duties, obligations, and liabilities of
members and administrators of decentralized unincorporated
nonprofit associations; and to provide for the dissolution and
winding up of decentralized unincorporated nonprofit
associations.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 10A-17-1.01 through 10A-17-1.18,
Code of Alabama 1975, inclusive, are designated as Article 1.
Section 2. Article 2, commencing with Section
10A-17-2.01, is added to Chapter 17 of Title 10A of the Code
of Alabama 1975, to read as follows:
§10A-17-2.01
This article together with applicable provisions of
Chapter 1 shall be known and may be cited as the Decentralized
Unincorporated Nonprofit Association Law.
§10A-17-2.02
For the purposes of this article, the following terms
have the following meanings:
(1) ADMINISTRATOR. A person authorized by the members
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(1) ADMINISTRATOR. A person authorized by the members
of a decentralized unincorporated nonprofit association to
fulfill administrative or operational tasks at the direction
of the membership.
(2) DECENTRALIZED UNINCORPORATED NONPROFIT ASSOCIATION
or NONPROFIT ASSOCIATION. An unincorporated nonprofit
association that meets the following requirements:
a. Consists of at least 100 members joined by mutual
consent in digital activity under an agreement, which may be
in writing or inferred from conduct, for a common nonprofit
purpose, including, but not limited to, administering the
affairs of a distributed ledger technology or network of smart
contracts.
b. Has elected to be formed under this article.
c. Is not formed under any other law governing the
nonprofit association's organization or operation.
(3) DIGITAL ASSET. A representation of economic,
proprietary, or access rights that is stored in a computer
readable format and is either a digital consumer asset,
digital security, or virtual currency.
(4) DISTRIBUTED LEDGER TECHNOLOGY. A distributed ledger
protocol and supporting infrastructure, including blockchain,
which uses a distributed, shared, and replicated ledger,
whether public or private, permissioned or permissionless, and
which may include the use of digital assets as a medium of
electronic exchange.
(5) ESTABLISHED PRACTICES. The practices used by a
decentralized unincorporated nonprofit association without
material change during the most recent five years of the
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material change during the most recent five years of the
nonprofit association's existence, or if the nonprofit
association has existed for less than five years, during the
nonprofit association's entire existence.
(6) GOVERNING PRINCIPLES. All agreements and any
amendment or restatement of those agreements, including any
decentralized unincorporated nonprofit association agreements,
consensus formation algorithms, smart contracts, or enacted
governance proposals, which govern the purpose or operation of
a decentralized unincorporated nonprofit association and the
rights and obligations of the nonprofit association's members
and administrators, whether contained in a record, implied
from the nonprofit association's established practices, or
both.
(7) MEMBER. A person who, under the governing
principles of a decentralized unincorporated nonprofit
association, may participate in the selection of the
decentralized unincorporated nonprofit association's
administrators or the development of the policies and
activities of the decentralized unincorporated nonprofit
association.
(8) MEMBERSHIP INTEREST. A member's voting rights in a
decentralized unincorporated nonprofit association determined
by the decentralized unincorporated nonprofit association's
governing principles, including as ascertained from
decentralized ledger technology on which the decentralized
unincorporated nonprofit association relies to determine a
member's voting rights.
(9) NONPROFIT PURPOSE. Any purpose for which a
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(9) NONPROFIT PURPOSE. Any purpose for which a
nonprofit corporation could be organized under Article 1, and
where no part of income or profit is distributable to its
members or administrators.
(10) PERSON. An individual, corporation, business
trust, estate, trust, partnership, association, agency, joint
venture, government, governmental subdivision or
instrumentality, or any other legal commercial entity.
(11) RECORD. Information that is inscribed on a
tangible medium or stored in an electronic or other medium
that is retrievable in perceivable form.
(12) SMART CONTRACT. An automated transaction, as
defined in any substantially similar analogue or code, script,
or programming language relying on distributed ledger
technology, including blockchain, which may include
facilitating and instructing transfers of an asset,
administrating membership interest votes with respect to a
decentralized unincorporated nonprofit association, or issuing
executable instructions for these actions based on the
occurrence or nonoccurrence of specified conditions.
(13) STATE. A state of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, or any territory
or insular possession subject to the jurisdiction of the
United States.
§10A-17-2.03
(a) The law of this state governs any decentralized
unincorporated nonprofit association that is formed in this
state.
(b) Each decentralized unincorporated nonprofit
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(b) Each decentralized unincorporated nonprofit
association's governing principles shall identify the
jurisdiction in which the decentralized unincorporated
nonprofit association is formed.
§10A-17-2.04
(a) A decentralized unincorporated nonprofit
association may engage in profit-making activities. Profits
from any activities shall be used in furtherance of, or set
aside for, the nonprofit association's common nonprofit
purpose.
(b) Except as provided in subsection (c), a
decentralized unincorporated nonprofit association may not
make distributions to its members or administrators.
(c) A decentralized unincorporated nonprofit
association may do all of the following:
(1) Pay reasonable compensation or reimburse reasonable
expenses to its members, administrators, and persons outside
of the nonprofit association for services rendered, including
with respect to the administration and operation of the
nonprofit association, which may include the provision of
collateral for the self-insurance of the nonprofit
association, voting, or participation in the nonprofit
association's operations and activities.
(2) Confer benefits on its members and administrators
in conformity with its common nonprofit purpose.
(3) Repurchase membership interests to the extent
authorized by the nonprofit association's governing
principles.
(4) Make distributions of property to members upon
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(4) Make distributions of property to members upon
winding up and termination of the decentralized unincorporated
nonprofit association to the extent permitted by Section
10A-17-2.26.
§10A-17-2.05
(a) Unless prohibited or otherwise limited by its
written rules or governing documents, a decentralized
unincorporated nonprofit association in its name may acquire,
hold, encumber, or transfer an estate or interest in real or
personal property.
(b) Unless prohibited or otherwise limited by its
written rules or governing documents, a decentralized
unincorporated nonprofit association may be a legatee,
devisee, or beneficiary of a trust or contract.
(c) Real and personal property in Alabama may be
acquired, held, encumbered, and transferred by a decentralized
unincorporated nonprofit association, whether it or a member
has any other relationship to Alabama.
§10A-17-2.06
(a) A decentralized unincorporated nonprofit
association shall execute and record a statement of authority
to transfer an estate or interest in real property in the name
of the nonprofit association.
(b) An estate or interest in real property in the name
of a decentralized unincorporated nonprofit association may be
transferred by a person so authorized in a statement of
authority recorded in the office of the judge of probate of
the county in which the real property is located.
(c) A statement of authority shall set forth:
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(c) A statement of authority shall set forth:
(1) The name of the decentralized unincorporated
nonprofit association;
(2) The address in Alabama, including the street
address, if any, of the decentralized unincorporated nonprofit
association, or, if the decentralized unincorporated nonprofit
association does not have an address in Alabama, its address
out of state;
(3) The name or title of a person authorized to
transfer an estate or interest in real property held in the
name of the decentralized unincorporated nonprofit
association; and
(4) The action, procedure, or vote of the decentralized
unincorporated nonprofit association which authorizes the
person to transfer the real property of the decentralized
unincorporated nonprofit association and which authorizes the
person to execute the statement of authority.
(d) A statement of authority shall be executed and
recorded in the same manner as a deed by a person who is not
the person authorized to transfer the estate or interest.
(e) The judge of probate shall collect a fee for
recording a statement of authority in accordance with Article
4 of Chapter 1.
(f) An amendment, including a cancellation, of a
statement of authority shall meet the requirements for
execution and recording, and be accompanied by payment of the
same recording fee payable to and for the judge of probate, of
an original statement. Unless canceled earlier, a recorded
statement of authority as amended is canceled by operation of
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statement of authority as amended is canceled by operation of
law five years after the date of the most recent amended
statement of authority.
(g) If the record title to real property is in the name
of a decentralized unincorporated nonprofit association and
the statement of authority is recorded in the office of the
judge of probate of the county in which the real property is
located, the authority of the person named in a statement of
authority is conclusive in favor of a person who gives value
without notice that the person lacks authority.
§10A-17-2.07
(a) A decentralized unincorporated nonprofit
association is a legal entity separate from its members for
the purposes of determining and enforcing rights, duties, and
liabilities in contract and tort.
(b) A person is not liable for a breach of a
decentralized unincorporated nonprofit association's contract
merely because the person is a member, administrator,
authorized to participate in the management of the affairs of
the nonprofit association, or considered a member by the
nonprofit association.
(c) A person is not liable for a tortious act or
omission for which a decentralized unincorporated nonprofit
association is liable merely because the person is a member or
administrator of the nonprofit association, authorized to
participate in the management of the affairs of the nonprofit
association, or considered a member by the nonprofit
association.
(d) A tortious act or omission of a member,
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(d) A tortious act or omission of a member,
administrator, or other person for which a decentralized
unincorporated nonprofit association is liable is not imputed
to a person merely because the person is a member or
administrator of the nonprofit association, authorized to
participate in the management of the affairs of the nonprofit
association, or considered a member by the nonprofit
association.
(e) A member, administrator, person authorized to
participate in the management of the affairs of the nonprofit
association, or person considered a member by the nonprofit
association may assert a claim against the decentralized
unincorporated nonprofit association. A decentralized
unincorporated nonprofit association may assert a claim
against a member, administrator, person authorized to
participate in the management of the affairs of the nonprofit
association, or person considered a member by the nonprofit
association.
§10A-17-2.08
(a) A decentralized unincorporated nonprofit
association, in its own name, may institute, defend,
intervene, or participate in a judicial, administrative, or
other governmental proceeding or in an arbitration, mediation,
or any other form of alternative dispute resolution.
(b) A decentralized unincorporated nonprofit
association may assert a claim on behalf of its members if all
of the following apply:
(1) One or more members of the nonprofit association
have standing to assert a claim in their own right.
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have standing to assert a claim in their own right.
(2) The interests the nonprofit association seeks to
protect are germane to the nonprofit association's purposes.
(3) Neither the claim asserted, nor the relief
requested, requires the participation of a member.
§10A-17-2.09
A judgment or order against a decentralized
unincorporated nonprofit association is not by itself a
judgment or order against a member or administrator of the
nonprofit association.
§10A-17-2.10
(a) A decentralized unincorporated nonprofit
association may deliver to the Secretary of State for filing a
statement appointing an agent authorized to receive service of
process.
(b) A statement appointing an agent shall set forth:
(1) The name of the nonprofit association;
(2) The address in Alabama, including the street
address, if any, of the decentralized unincorporated nonprofit
association, or, if the decentralized unincorporated nonprofit
association does not have an address in Alabama, its address
out of state; and
(3) The name of the person in Alabama authorized to
receive service of process and the person's address, including
the street address, in Alabama.
(c) A statement appointing an agent shall be signed and
acknowledged by a person authorized to manage the affairs of
the decentralized unincorporated nonprofit association. The
statement shall also be signed and acknowledged by the person
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statement shall also be signed and acknowledged by the person
appointed agent, who thereby accepts appointment.
(d) The appointed agent may resign by delivering to the
Secretary of State for filing a resignation, and by giving
notice to the decentralized unincorporated nonprofit
association. The appointment of the agent shall terminate upon
the expiration of 30 days after the Secretary of State has
filed the resignation.
(e) The Secretary of State may collect a fee for filing
a statement appointing an agent to receive service of process,
an amendment, or a resignation in the amount charged for
filing similar documents for nonprofit corporations.
(f) An amendment to a statement appointing an agent to
receive service of process shall meet the requirements for
execution of an original statement.
§10A-17-2.11
In an action or proceeding against a decentralized
unincorporated nonprofit association, a summons and complaint
shall be served on the agent authorized by appointment in
Section 10A-17-2.10 to receive service of process, on a person
authorized to administer the affairs of the nonprofit
association, or in any manner otherwise provided in the
Alabama Rules of Civil Procedure. If, after reasonable efforts
to accomplish service through the methods provided in this
section, service cannot be accomplished, then service may be
made on a member of the nonprofit association.
§10A-17-2.12
A claim for relief against a decentralized
unincorporated nonprofit association shall not abate merely
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unincorporated nonprofit association shall not abate merely
because of a change in its members or persons authorized to
administer the affairs of the nonprofit association.
§10A-17-2.13
Venue shall be:
(1) As provided in Section 6-3-6; or
(2) The county in which the agent authorized to receive
service of process under Section 10A-17-2.10 resides.
§10A-17-2.14
(a) A decentralized unincorporated nonprofit
association shall have perpetual existence unless its
governing principles otherwise specify.
(b) A decentralized unincorporated nonprofit
association may be dissolved as follows:
(1) If the governing principles of the nonprofit
association provide a time or method for dissolution, by that
method.
(2) If the governing principles of the nonprofit
association do not provide a method for dissolution, by
approval of its members pursuant to Section 10A-17-2.20.
(3) If membership in the decentralized unincorporated
nonprofit association falls below 100 members and the
decentralized unincorporated nonprofit association does not
meet the requirements of Sections 10A-17-2.01 through
10A-17-2.15. In the event membership in the nonprofit
association falls below 100 members and the nonprofit
association meets the requirements of Sections 10A-17-2.01
through 10A-17-2.15, the entity shall automatically transition
to an Alabama unincorporated nonprofit association unless the
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to an Alabama unincorporated nonprofit association unless the
governing principles otherwise specify.
(4) By court order.
(c) After dissolution, a decentralized unincorporated
nonprofit association continues in existence until its
activities are wound up and terminated pursuant to Section
10A-17-2.26.
§10A-17-2.15
(a)(1) A person may become a member of a decentralized
unincorporated nonprofit association in accordance with the
governing principles of that decentralized unincorporated
nonprofit association.
(2) If there are no applicable governing principles, a
person shall be considered a member upon the purchase or
assumption of ownership of a membership interest.
(3) A person shall continue as a member absent the
person's suspension, dismissal, or expulsion pursuant to
subsection (b), resignation pursuant to Section 10A-17-2.16,
or the decentralized unincorporated nonprofit association's
dissolution and winding-up pursuant to this article.
(b) Subject to the governing principles of the
decentralized unincorporated nonprofit association, a member
may be suspended, dismissed, or expelled. If there are no
applicable governing principles, a member may be suspended,
dismissed, or expelled by approval of the membership in
accordance with Section 10A-17-2.20.
(c) Unless otherwise provided for in the governing
principles, suspension, dismissal, or expulsion of a member
does not relieve the member of any obligation incurred, or
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does not relieve the member of any obligation incurred, or
commitment made by the member, before the suspension,
dismissal, or expulsion.
§10A-17-2.16
(a)(1) A member may resign as a member of a
decentralized unincorporated nonprofit association in
accordance with the governing principles of that decentralized
unincorporated nonprofit association.
(2) If there are no applicable governing principles, a
member shall be deemed to have resigned as a member upon the
disposal, whether voluntary or involuntary, of all membership
interests or other property or instruments that confer upon
the person a voting right within the nonprofit association.
(b) Unless otherwise provided for in the governing
principles, resignation of a member does not relieve the
member of any obligation incurred or commitment made by the
member before the resignation.
§10A-17-2.17
(a) Unless otherwise provided for in the governing
principles, a member shall not have any fiduciary duty to a
decentralized unincorporated nonprofit association or to any
other member of the decentralized unincorporated nonprofit
association merely by reason of being a member.
(b) A member acting on behalf of the decentralized
unincorporated nonprofit association shall discharge his or
her duties in a manner the member reasonably believes to be in
the best interest of the nonprofit association.
§10A-17-2.18
(a) A member is not an agent of a decentralized
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(a) A member is not an agent of a decentralized
unincorporated nonprofit association merely by being a member.
(b) A person's status as a member does not prevent or
restrict laws other than this article from imposing liability
on a decentralized unincorporated nonprofit association
because of a member's conduct.
§10A-17-2.19
Except as otherwise provided in the decentralized
unincorporated nonprofit association's governing principles, a
member's interest or any right granted pursuant to the
governing principles is freely transferable to another person
through conveyance of the membership interest.
§10A-17-2.20
(a) Except as otherwise provided in the governing
principles, a decentralized unincorporated nonprofit
association shall have the approval of a majority of the
membership interests participating in a vote to do any of the
following:
(1) Suspend, dismiss, or expel a member.
(2) Select or dismiss an administrator.
(3) Adopt, amend, or repeal the governing principles.
(4) Sell, lease, exchange, or otherwise dispose of the
property of the decentralized unincorporated nonprofit
association.
(5) Dissolve the decentralized unincorporated nonprofit
association under Section 10A-17-2.14.
(6) Undertake any other act outside of the ordinary
course of the decentralized unincorporated nonprofit
association's activities.
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association's activities.
(7) Determine the policy and purpose of the
decentralized unincorporated nonprofit association.
(b) In order to perform any act or exercise any right
that the governing principles require to be approved by the
membership, a decentralized unincorporated nonprofit
association must have the approval of the membership to act in
accordance with its governing principles.
(c) Unless otherwise provided for in the governing
principles, membership interest in a decentralized
unincorporated nonprofit association shall be calculated in
proportion to a member's voting rights within the nonprofit
association.
§10A-17-2.21
(a) A decentralized unincorporated nonprofit
association may provide for its governance, in whole or in
part, through distributed ledger technology including, but not
limited to, smart contracts.
(b) The governing principles for a decentralized
unincorporated nonprofit association may include, but not be
limited to, the following provisions:
(1) Specify whether any distributed ledger technology
used or enabled by the decentralized unincorporated nonprofit
association will be fully immutable or subject to change by
the decentralized unincorporated nonprofit association and
whether any distributed ledger will be fully or partially
public or private, including the extent of a member's access
to information.
(2) Adopt voting procedures, which may include smart
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(2) Adopt voting procedures, which may include smart
contracts deployed to distributed ledger technology and which
may provide for all of the following:
a. Proposals from members or administrators in the
decentralized unincorporated nonprofit association for
upgrades, modifications, or additions to software systems or
protocols.
b. Other proposed changes to the decentralized
unincorporated nonprofit association's governing principles.
c. Any other matters of governance or activities within
the purpose of the decentralized unincorporated nonprofit
association.
§10A-17-2.22
In accordance with its governing principles, a
decentralized unincorporated nonprofit association may do both
of the following:
(1) Adopt any reasonable algorithmic means for
establishing consensus for the validation of records, as well
as for establishing requirements, processes, and procedures
for conducting operations or making organizational decisions
with respect to the distributed ledger technology used by the
nonprofit association.
(2) In accordance with any procedure specified pursuant
to Section 10A-17-2.21, modify the consensus mechanism, as
well as the requirements, processes, and procedures or
substitute a new consensus mechanism, requirements, processes,
or procedures that comply with this state's law and the
governing principles of the nonprofit association.
§10A-17-2.23
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§10A-17-2.23
(a) Unless otherwise provided for in the decentralized
unincorporated nonprofit association's governing principles,
the members of the nonprofit association may select the
nonprofit association's administrators in accordance with
Section 10A-17-2.20.
(b) If no administrators are selected, none of the
members may be considered administrators for the decentralized
unincorporated nonprofit association.
(c) No decentralized unincorporated nonprofit
association shall be required to have an administrator, and
the rights and duties of all administrators shall be
established as part of the authorization of authority to act
as an administrator.
(d) If in a record, the governing principles of a
decentralized unincorporated nonprofit association may limit
or eliminate the liability of an administrator to the
decentralized unincorporated nonprofit association or its
members for money damages for any action taken, or failure to
take any action, as an administrator except liability for any
of the following:
(1) The amount of financial benefit improperly received
by an administrator.
(2) An intentional infliction of harm on the nonprofit
association or its members.
(3) An intentional violation of criminal law.
(4) Breach of the duty of loyalty should one exist,
unless, following full disclosure of all material facts to the
nonprofit association members, the specific act or transaction
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nonprofit association members, the specific act or transaction
that would otherwise breach the duty of loyalty is authorized
or ratified by approval of the disinterested members pursuant
to Section 10A-17-2.20.
(5) Improper distributions.
§10A-17-2.24
(a) Except as provided by subsection (b), on reasonable
notice, a member or administrator of a decentralized
unincorporated nonprofit association is entitled to an
electronic record of any record maintained by the nonprofit
association regarding the nonprofit association's activities,
financial condition, and other circumstances, to the extent
the information is material to the member's or administrator's
rights and duties under the decentralized unincorporated
nonprofit association's governing principles or this article.
(b) A decentralized unincorporated nonprofit
association is not obligated to provide records requested from
a member or administrator if access to the information is
contained in a record available to the member or administrator
in a medium available to the member, including distributed
ledger technology.
(c)(1) A decentralized unincorporated nonprofit
association may impose reasonable restrictions on access to
and use of information that may be provided under this
section, including by designating the information confidential
and imposing nondisclosure or other safeguarding obligations
on the recipient of the information.
(2) In a dispute concerning the reasonableness of a
restriction under this subsection, the decentralized
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restriction under this subsection, the decentralized
unincorporated nonprofit association shall have the burden of
proving reasonableness.
(d) A former member or administrator may have access to
information to which the former member or administrator was
entitled to as a member or administrator if all of the
following apply:
(1) The information relates to the period of time
during which the former member or administrator was a member
or administrator.
(2) The former member or administrator seeks the
information in good faith.
(3) The former member or administrator satisfies the
requirements of subsections (a) through (c) with respect to
the information.
(e) A decentralized unincorporated nonprofit
association shall not be obligated to collect and maintain a
list of members or information on an individual member,
including the names or addresses of members.
§10A-17-2.25
(a) Unless otherwise provided in its governing
principles, a decentralized unincorporated nonprofit
association may reimburse a member or administrator for
authorized expenses reasonably incurred on behalf of the
nonprofit association.
(b) A decentralized unincorporated nonprofit
association may indemnify a member or administrator for any
debt, obligation, or other liability incurred in the course of
the member or administrator's activities on behalf of the
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the member or administrator's activities on behalf of the
nonprofit association. To be eligible for indemnification, an
administrator must have complied with the duties stated in
Section 10A-17-2.23. If in a record, a nonprofit association's
governing principles may broaden or limit this right of
indemnification.
(c) If a person is made or threatened to be made a
party in a proceeding based on that person's conduct in the
affairs of a decentralized unincorporated nonprofit
association, that person is entitled, upon written request to
the decentralized unincorporated nonprofit association,
including through distributed ledger technology, to receive
payment of or reimbursement by the nonprofit association, of
reasonable expenses, including attorney fees and
disbursements, incurred by that person in advance of the final
disposition of the proceeding. To be entitled to these
payments or advances, the person making the request shall make
a written affirmation that the person has a good faith belief
that the criteria for indemnification in subsection (b) has
been satisfied and that the person will repay the amounts paid
or reimbursed if it is determined that the criteria for
reimbursement has not been satisfied. No payment or
reimbursement under this subsection shall be made without
prior approval, in a record, of the disinterested members
under Section 10A-17-2.20.
(d) A decentralized unincorporated nonprofit
association may purchase and maintain insurance on behalf of a
member or administrator for liability asserted against or
incurred by the member or administrator in that capacity, even
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incurred by the member or administrator in that capacity, even
if the decentralized unincorporated nonprofit association
would not have the power to indemnify or advance expenses to
the member or administrator against the same liability under
this section.
(e) These rights of reimbursement, indemnification, and
advancement of expense apply to former members or
administrators for activities undertaken on behalf of the
decentralized unincorporated nonprofit association while they
were members or administrators.
§10A-17-2.26
(a) A dissolved decentralized unincorporated nonprofit
association shall wind up its operations and may continue
after dissolution only for the purpose of winding up.
(b) In winding up a decentralized unincorporated
nonprofit association, the members shall discharge the
decentralized unincorporated nonprofit association's debts,
obligations, and other liabilities, settle and close the
decentralized unincorporated nonprofit association's business,
and distribute any remaining property as follows:
(1) To another entity or person with similar nonprofit
purposes, if required by law other than this article.
(2) In accordance with the decentralized unincorporated
nonprofit association's governing principles. In the absence
of applicable governing principles, to the current members of
the decentralized unincorporated nonprofit association in
proportion to their membership interests.
(3) If neither subdivision (1) or (2) applies, in
accordance with the law of unclaimed property contained in
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accordance with the law of unclaimed property contained in
Article 2A, Chapter 12 of Title 35, Code of Alabama 1975.
(c) In winding up a decentralized unincorporated
nonprofit association, the members may do all of the
following:
(1) Authorize an administrator to wind up the
decentralized unincorporated nonprofit association in
accordance with Section 10A-17-2.14. Any authorized
administrator shall owe the nonprofit association a duty of
care in the conduct or winding up of the decentralized
unincorporated nonprofit association to refrain from grossly
negligent or reckless conduct, willful or intentional
misconduct, or a knowing violation of the law.
(2) Preserve the decentralized unincorporated nonprofit
association's operations and property as a going concern for a
reasonable time.
(3) Prosecute and defend actions and proceedings,
whether civil, criminal, or administrative.
(4) Transfer the decentralized unincorporated nonprofit
association's property.
(5) Settle disputes by mediation or arbitration.
(6) Perform other acts necessary or appropriate to the
winding up.
(d) If the members of a decentralized unincorporated
nonprofit association do not appoint an administrator or
administrators to wind up the decentralized unincorporated
nonprofit association, the members shall owe the decentralized
unincorporated nonprofit association a duty of care in the
conduct or winding up of the decentralized unincorporated
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conduct or winding up of the decentralized unincorporated
nonprofit association's operations to refrain from engaging in
grossly negligent or reckless conduct, willful or intentional
misconduct, or a knowing violation of the law.
§10A-17-2.27
A decentralized unincorporated nonprofit association
may effect a merger or conversion by complying with the
applicable provisions of Chapter 1 and its governing
principles.
§10A-17-2.28
Principles of law and equity supplement this chapter
unless displaced by a specific provision of this chapter.
Section 3. This act shall become effective on October
1, 2026.
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