M&A Conditions Precedent Checklist - Alabama
M&A CONDITIONS PRECEDENT CHECKLIST
State of Alabama
Transaction Name: [________________________________]
Transaction Type: ☐ Stock Purchase ☐ Asset Purchase ☐ Statutory Merger ☐ Other: [________________________________]
Seller/Target: [________________________________]
Buyer/Acquirer: [________________________________]
Anticipated Closing Date: [__/__/____]
Definitive Agreement Date: [__/__/____]
Outside Date (Drop-Dead Date): [__/__/____]
Deal Counsel (Seller): [________________________________]
Deal Counsel (Buyer): [________________________________]
STATUS KEY:
- NS = Not Started
- IP = In Progress
- PC = Pending Counterparty
- PR = Pending Regulatory
- C = Complete
- W = Waived
- NA = Not Applicable
PART I: PRE-CLOSING CONDITIONS
A. Regulatory Approvals
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 1.1 | Hart-Scott-Rodino (HSR) Act filing (if transaction exceeds $133.9 million size-of-transaction threshold, effective 2/17/2026; 15 U.S.C. 18a) | ☐ Buyer ☐ Seller | [____] | [__/__/____] | Filing fee tiered by deal value; threshold adjusts annually -- verify current figure at ftc.gov |
| 1.2 | HSR waiting period expired or early termination granted | ☐ Buyer ☐ Seller | [____] | [__/__/____] | Ordinarily 30 days after agency receipt of both required notifications; 15 days for a cash tender offer, subject to extensions |
| 1.3 | Federal industry-specific regulatory approvals (e.g., FCC, FDIC, OCC, SEC, DOT) | [________________________________] | [____] | [__/__/____] | |
| 1.4 | Alabama state regulatory approvals (if applicable): | ||||
| ☐ Alabama Department of Insurance (change of control of insurer, Ala. Code 27-29-1 et seq.) | [________________________________] | [____] | [__/__/____] | ||
| ☐ Alabama State Banking Department (bank transactions) | [________________________________] | [____] | [__/__/____] | ||
| ☐ Alabama Public Service Commission (utility transfers) | [________________________________] | [____] | [__/__/____] | ||
| ☐ Alabama Alcoholic Beverage Control Board (liquor license transfers) | [________________________________] | [____] | [__/__/____] | ||
| ☐ Alabama Department of Environmental Management (ADEM permit transfers) | [________________________________] | [____] | [__/__/____] | ||
| ☐ Alabama Department of Revenue (tax clearance matters) | [________________________________] | [____] | [__/__/____] | ||
| 1.5 | CFIUS review/clearance (if foreign buyer; 50 U.S.C. 4565) | [________________________________] | [____] | [__/__/____] | |
| 1.6 | Other federal or state approvals: [________________________________] | [________________________________] | [____] | [__/__/____] |
B. Third-Party Consents
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 2.1 | Consent from counterparties to material contracts with change-of-control provisions | [________________________________] | [____] | [__/__/____] | List contracts in schedule |
| 2.2 | Landlord consents for assigned leases | [________________________________] | [____] | [__/__/____] | |
| 2.3 | Licensor consents for assigned IP licenses | [________________________________] | [____] | [__/__/____] | |
| 2.4 | Lender consents / waivers under credit facilities | [________________________________] | [____] | [__/__/____] | |
| 2.5 | Surety/bonding company consents | [________________________________] | [____] | [__/__/____] | |
| 2.6 | Customer consents (if required by contract) | [________________________________] | [____] | [__/__/____] | |
| 2.7 | Supplier consents (if required by contract) | [________________________________] | [____] | [__/__/____] | |
| 2.8 | Joint venture or partnership consents | [________________________________] | [____] | [__/__/____] | |
| 2.9 | Franchisor consent (if franchise agreement involved) | [________________________________] | [____] | [__/__/____] | |
| 2.10 | Government contract novation/assignment (FAR 42.12 if federal contracts; also confirm Alabama-specific government contract requirements) | [________________________________] | [____] | [__/__/____] |
C. Stockholder/Member Approvals
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 3.1 | Seller/Target stockholder approval of merger (Ala. Code 10A-2A-11.04 generally requires a majority of votes entitled to be cast, plus any required separate voting-group approval, unless a greater requirement applies) | [________________________________] | [____] | [__/__/____] | |
| 3.2 | Buyer stockholder approval (if required by buyer's governing documents or applicable law) | [________________________________] | [____] | [__/__/____] | |
| 3.3 | Written consents in lieu of meeting obtained (if permitted under Ala. Code 10A-2A-7.04) | [________________________________] | [____] | [__/__/____] | |
| 3.4 | Dissenter/appraisal rights notices sent (Ala. Code 10A-2A-13.01 et seq.) | [________________________________] | [____] | [__/__/____] | |
| 3.5 | Dissenter/appraisal demand period expired or claims resolved | [________________________________] | [____] | [__/__/____] | |
| 3.6 | Parent-subsidiary or sibling merger: parent owns stock carrying at least 90% of the voting power of every voting class and series (Ala. Code 10A-2A-11.05) -- subsidiary board and stockholder approval generally not required | [________________________________] | [____] | [__/__/____] | If applicable |
PART II: SELLER'S CONDITIONS TO CLOSING (Conditions for Seller's Benefit)
A. Representations and Warranties Bring-Down
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 4.1 | Buyer's representations and warranties true and correct as of Closing Date (to applicable standard: ☐ in all respects ☐ in all material respects ☐ subject to MAE qualifier) | Buyer | [____] | [__/__/____] | |
| 4.2 | Buyer's officer certificate confirming accuracy of representations | Buyer | [____] | [__/__/____] |
B. Buyer's Covenants Performed
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 5.1 | Buyer has performed all covenants required to be performed on or before Closing | Buyer | [____] | [__/__/____] | |
| 5.2 | Buyer's officer certificate confirming performance of covenants | Buyer | [____] | [__/__/____] |
C. Other Seller Conditions
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 6.1 | No litigation or proceeding threatening Seller's ability to consummate transaction | Both | [____] | [__/__/____] | |
| 6.2 | Receipt of Buyer's closing deliverables (see Part VI) | Buyer | [____] | [__/__/____] | |
| 6.3 | Financing confirmed / evidence of available funds | Buyer | [____] | [__/__/____] |
PART III: BUYER'S CONDITIONS TO CLOSING (Conditions for Buyer's Benefit)
A. Representations and Warranties Bring-Down
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 7.1 | Seller's representations and warranties true and correct as of Closing Date (to applicable standard: ☐ in all respects ☐ in all material respects ☐ subject to MAE qualifier) | Seller | [____] | [__/__/____] | |
| 7.2 | Seller's officer certificate confirming accuracy of representations | Seller | [____] | [__/__/____] | |
| 7.3 | No Material Adverse Effect has occurred since date of definitive agreement | Seller | [____] | [__/__/____] |
B. Seller's Covenants Performed
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 8.1 | Seller has performed all covenants required to be performed on or before Closing | Seller | [____] | [__/__/____] | |
| 8.2 | Seller has complied with conduct-of-business covenant (interim operating covenants) | Seller | [____] | [__/__/____] | |
| 8.3 | Seller's officer certificate confirming performance of covenants | Seller | [____] | [__/__/____] |
C. No Material Adverse Change (MAC/MAE)
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 9.1 | No MAC/MAE has occurred with respect to the Target since the agreement date | Seller | [____] | [__/__/____] | Confirm MAE definition in agreement |
| 9.2 | No material damage or destruction to Target's assets | Seller | [____] | [__/__/____] |
D. Legal Opinions
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 10.1 | Legal opinion from Seller's counsel (authorization, enforceability, no conflicts) | Seller's Counsel | [____] | [__/__/____] | |
| 10.2 | Regulatory opinion(s) if required | [________________________________] | [____] | [__/__/____] |
E. Financial and Diligence Conditions
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 11.1 | Updated financial statements delivered (if required) | Seller | [____] | [__/__/____] | |
| 11.2 | Working capital estimate delivered | Seller | [____] | [__/__/____] | |
| 11.3 | No undisclosed liabilities discovered | Seller | [____] | [__/__/____] | |
| 11.4 | Environmental assessment complete (if required) | Buyer | [____] | [__/__/____] | |
| 11.5 | Buyer's financing confirmed (commitment letters, credit agreements executed) | Buyer | [____] | [__/__/____] | |
| 11.6 | Title search/commitment for real property (if applicable) | Buyer | [____] | [__/__/____] | |
| 11.7 | Lien search results satisfactory (UCC, tax, judgment) | Buyer | [____] | [__/__/____] |
F. Employee and Benefits Conditions
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 12.1 | Key employee retention/offer letters executed | Buyer | [____] | [__/__/____] | |
| 12.2 | Section 280G analysis complete (if C-corp target; excess parachute payments) | Seller | [____] | [__/__/____] | |
| 12.3 | 280G shareholder approval vote obtained (if applicable) | Seller | [____] | [__/__/____] | |
| 12.4 | Employee benefit plan transition schedule agreed | Both | [____] | [__/__/____] | |
| 12.5 | COBRA continuation coverage notices prepared | Seller | [____] | [__/__/____] | |
| 12.6 | Workers' compensation insurance confirmed for post-closing | Buyer | [____] | [__/__/____] |
G. Insurance / RWI Conditions (if Applicable)
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 13.1 | Representations and Warranties Insurance (RWI) policy bound | ☐ Buyer ☐ Seller | [____] | [__/__/____] | |
| 13.2 | RWI binder/policy terms reviewed; exclusions acceptable | Both | [____] | [__/__/____] | |
| 13.3 | Retention amount and subrogation language aligned with indemnity provisions | Both | [____] | [__/__/____] | |
| 13.4 | No-claims declaration delivered | Seller | [____] | [__/__/____] | |
| 13.5 | Broker engagement letter executed | ☐ Buyer ☐ Seller | [____] | [__/__/____] | |
| 13.6 | Tail D&O/E&O/cyber insurance policies quoted and ready to bind | Seller | [____] | [__/__/____] |
PART IV: MUTUAL CONDITIONS TO CLOSING
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 12.1 | No injunction, restraining order, or decree preventing consummation | Both | [____] | [__/__/____] | |
| 12.2 | No law enacted or pending that prohibits the transaction | Both | [____] | [__/__/____] | |
| 12.3 | All required regulatory approvals obtained (see Part I.A) | Both | [____] | [__/__/____] | |
| 12.4 | All required third-party consents obtained (see Part I.B) | Both | [____] | [__/__/____] | |
| 12.5 | All required stockholder/member approvals obtained (see Part I.C) | Both | [____] | [__/__/____] | |
| 12.6 | HSR waiting period expired or terminated (if applicable) | Both | [____] | [__/__/____] | |
| 12.7 | No governmental litigation or investigation threatening transaction | Both | [____] | [__/__/____] |
PART V: ALABAMA-SPECIFIC REQUIREMENTS
A. State Merger Filings (Statutory Merger Transactions)
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 13.1 | Prepare the Statement of Merger under Ala. Code 10A-2A-11.06 | Deal Counsel | [____] | [__/__/____] | |
| 13.2 | Statement of Merger includes each constituent and survivor's required identifying information, effective date, public organizational documents or amendments, approval statements, foreign-survivor service address when applicable, and no-cost plan-availability statement | Deal Counsel | [____] | [__/__/____] | Per 10A-2A-11.06 |
| 13.3 | Certificate signed by authorized officer or representative of each merging entity | Both | [____] | [__/__/____] | |
| 13.4 | File Certificate of Merger with Alabama Secretary of State, P.O. Box 5616, Montgomery, AL 36103-5616 | Deal Counsel | [____] | [__/__/____] | Filing fee: $100 per Ala. Code 10A-1-4.31 |
| 13.5 | Receive filed-stamped copy from Secretary of State | Deal Counsel | [____] | [__/__/____] | |
| 13.6 | Parent-subsidiary or sibling merger under Ala. Code 10A-2A-11.05: verify the 90%-of-voting-power threshold, parent-side approval requirements, subsidiary governing documents, and 10-day post-effective notice | Deal Counsel | [____] | [__/__/____] | |
| 13.7 | If non-surviving entity is a foreign entity qualified in Alabama, file certificate of withdrawal | Deal Counsel | [____] | [__/__/____] |
B. Alabama Good Standing and Entity Status
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 14.1 | Obtain Certificate of Existence/Good Standing for Seller/Target from Alabama Secretary of State | Seller | [____] | [__/__/____] | Phone: (334) 242-7200 |
| 14.2 | Obtain Certificate of Good Standing for Buyer from its state of organization | Buyer | [____] | [__/__/____] | |
| 14.3 | Confirm Seller/Target annual report is current with Secretary of State | Seller | [____] | [__/__/____] | |
| 14.4 | Confirm no administrative dissolution or revocation pending | Seller | [____] | [__/__/____] | |
| 14.5 | If Buyer is a foreign entity, confirm qualification to transact business in Alabama (Ala. Code 10A-2A-15.01) | Buyer | [____] | [__/__/____] |
C. Alabama Tax Matters
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 15.1 | Alabama Department of Revenue -- corporate income tax clearance or final return (Ala. Code 40-18-1 et seq.) | Seller | [____] | [__/__/____] | Alabama imposes corporate income tax |
| 15.2 | Alabama business privilege tax obligations current (Ala. Code 40-14A-1 et seq.) | Seller | [____] | [__/__/____] | Annual privilege tax based on net worth |
| 15.3 | Alabama Department of Revenue -- sales/use tax clearance (if asset sale involving inventory or tangible personal property) | Seller | [____] | [__/__/____] | |
| 15.4 | Local county/municipality business license and tax clearance | Seller | [____] | [__/__/____] | Alabama counties impose occupational taxes |
| 15.5 | Real property transfer tax (deed recording tax, Ala. Code 40-22-1): $0.50 per $500 (or fraction) of value of property conveyed, subject to statutory adjustments and exemptions | Seller/Buyer | [____] | [__/__/____] | If real property conveyed |
| 15.6 | Alabama unemployment compensation tax obligations current (Ala. Code 25-4-1 et seq.) | Seller | [____] | [__/__/____] |
D. Alabama-Specific Licensing and Permits
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 16.1 | Transfer or re-issuance of Alabama business license(s) (county-level) | [________________________________] | [____] | [__/__/____] | Alabama has no state business license; licenses are county-based |
| 16.2 | Transfer of professional or occupational licenses (if applicable) | [________________________________] | [____] | [__/__/____] | |
| 16.3 | Transfer of ADEM environmental permits | [________________________________] | [____] | [__/__/____] | |
| 16.4 | Transfer of Alabama Liquor Control Board licenses (if applicable) | [________________________________] | [____] | [__/__/____] | |
| 16.5 | Transfer of Alabama healthcare facility licenses (if applicable; Alabama Department of Public Health) | [________________________________] | [____] | [__/__/____] | |
| 16.6 | Alabama contractor's license transfer (if applicable; Alabama Licensing Board for General Contractors) | [________________________________] | [____] | [__/__/____] |
E. Bulk Sales Considerations
| # | Condition | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 17.1 | Alabama has repealed UCC Article 6 (Bulk Transfers); no general bulk sales law compliance required | N/A | N/A | N/A | |
| 17.2 | If asset purchase, confirm no creditor notification obligations under contract or other applicable law | Deal Counsel | [____] | [__/__/____] | |
| 17.3 | Confirm no industry-specific bulk transfer requirements (e.g., healthcare, banking) | Deal Counsel | [____] | [__/__/____] |
PART VI: CLOSING DELIVERABLES CHECKLIST
A. Seller's Closing Deliverables
| # | Deliverable | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 18.1 | Executed definitive agreement (or confirmation of prior execution) | Seller | [____] | [__/__/____] | |
| 18.2 | Officer's certificate (re: reps, warranties, covenants) | Seller | [____] | [__/__/____] | |
| 18.3 | Secretary's certificate (articles of incorporation, bylaws, resolutions, incumbency) | Seller | [____] | [__/__/____] | |
| 18.4 | Certificate of Existence/Good Standing from Alabama Secretary of State (dated within [____] days of Closing) | Seller | [____] | [__/__/____] | |
| 18.5 | Board resolutions authorizing the transaction | Seller | [____] | [__/__/____] | |
| 18.6 | Stockholder/member approval documentation | Seller | [____] | [__/__/____] | |
| 18.7 | FIRPTA certificate (IRC 1445; non-foreign affidavit) | Seller | [____] | [__/__/____] | |
| 18.8 | IRS Form W-9 (Seller) | Seller | [____] | [__/__/____] | |
| 18.9 | Stock certificates (endorsed or with stock powers) / membership interest assignments | Seller | [____] | [__/__/____] | Stock purchase only |
| 18.10 | Bill of Sale | Seller | [____] | [__/__/____] | Asset purchase only |
| 18.11 | Assignment and Assumption Agreement | Both | [____] | [__/__/____] | Asset purchase only |
| 18.12 | IP Assignment Agreement(s) | Seller | [____] | [__/__/____] | |
| 18.13 | Real property deeds (warranty deed or special warranty deed) | Seller | [____] | [__/__/____] | Record in county probate office |
| 18.14 | Vehicle title transfers (Alabama Department of Revenue, Motor Vehicle Division) | Seller | [____] | [__/__/____] | |
| 18.15 | Domain name transfer documentation | Seller | [____] | [__/__/____] | |
| 18.16 | Payoff letters from Seller's lenders | Seller | [____] | [__/__/____] | |
| 18.17 | UCC-3 termination statements (lien releases) | Seller | [____] | [__/__/____] | File with Alabama Secretary of State |
| 18.18 | Executed non-competition/non-solicitation agreements | Seller/Key Employees | [____] | [__/__/____] | Alabama enforces reasonable non-competes |
| 18.19 | Executed employment/consulting agreements with key employees | Seller/Key Employees | [____] | [__/__/____] | |
| 18.20 | Executed transition services agreement (if applicable) | Both | [____] | [__/__/____] | |
| 18.21 | Escrow agreement (if applicable) | Both | [____] | [__/__/____] | |
| 18.22 | Legal opinion of Seller's counsel | Seller's Counsel | [____] | [__/__/____] | |
| 18.23 | Resignations of directors and officers (as agreed) | Seller | [____] | [__/__/____] | |
| 18.24 | Landlord estoppels and SNDAs | Seller | [____] | [__/__/____] | |
| 18.25 | Tax allocation schedule (asset purchase, IRC 1060) | Both | [____] | [__/__/____] | |
| 18.26 | Section 280G analysis and shareholder vote (if applicable, C-corp target) | Seller | [____] | [__/__/____] |
B. Buyer's Closing Deliverables
| # | Deliverable | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 19.1 | Purchase price payment (by wire transfer of immediately available funds) | Buyer | [____] | [__/__/____] | |
| 19.2 | Officer's certificate (re: reps, warranties, covenants) | Buyer | [____] | [__/__/____] | |
| 19.3 | Secretary's certificate (articles, bylaws, resolutions, incumbency) | Buyer | [____] | [__/__/____] | |
| 19.4 | Certificate of Good Standing from Buyer's state of organization | Buyer | [____] | [__/__/____] | |
| 19.5 | Board resolutions authorizing the transaction | Buyer | [____] | [__/__/____] | |
| 19.6 | Assumption Agreement (asset purchase) | Buyer | [____] | [__/__/____] | |
| 19.7 | Executed escrow agreement (if applicable) | Buyer | [____] | [__/__/____] | |
| 19.8 | Evidence of financing (executed credit agreement, funding confirmation) | Buyer | [____] | [__/__/____] | |
| 19.9 | Solvency certificate (if debt financing involved) | Buyer | [____] | [__/__/____] | |
| 19.10 | Legal opinion of Buyer's counsel (if required) | Buyer's Counsel | [____] | [__/__/____] | |
| 19.11 | Executed ancillary agreements (employment, TSA, non-compete) | Buyer | [____] | [__/__/____] |
C. Funds Flow and Payment
| # | Deliverable | Responsible | Status | Target Date | Notes |
|---|---|---|---|---|---|
| 20.1 | Funds flow memorandum executed by all parties | Both | [____] | [__/__/____] | |
| 20.2 | Wire transfer instructions confirmed | Both | [____] | [__/__/____] | |
| 20.3 | Escrow agent funding letter (if escrow) | Escrow Agent | [____] | [__/__/____] | |
| 20.4 | Payoff wires sent to Seller's lenders | Buyer | [____] | [__/__/____] | |
| 20.5 | Net purchase price wire sent to Seller | Buyer | [____] | [__/__/____] | |
| 20.6 | Working capital adjustment estimate delivered | Seller | [____] | [__/__/____] | |
| 20.7 | Transaction expense fund distributed | Both | [____] | [__/__/____] |
PART VII: POST-CLOSING CONDITIONS AND OBLIGATIONS
| # | Obligation | Responsible | Deadline | Status | Notes |
|---|---|---|---|---|---|
| 21.1 | Working capital true-up (per agreement timeline, typically 60-90 days) | Both | [__/__/____] | [____] | |
| 21.2 | Earnout payments (if applicable, per milestones) | Buyer | Per Agreement | [____] | |
| 21.3 | Post-closing purchase price adjustment | Both | [__/__/____] | [____] | |
| 21.4 | File Certificate of Merger with Alabama Secretary of State (if not filed at closing) | Deal Counsel | [__/__/____] | [____] | |
| 21.5 | File updated annual report reflecting new ownership (if entity continues) | Buyer | [__/__/____] | [____] | |
| 21.6 | Update county business licenses | Buyer | [__/__/____] | [____] | |
| 21.7 | Customer/supplier notification letters sent | Buyer | [__/__/____] | [____] | |
| 21.8 | Employee benefit plan transitions completed | Buyer | [__/__/____] | [____] | |
| 21.9 | COBRA notices issued (if applicable) | Seller | [__/__/____] | [____] | |
| 21.10 | Tail insurance policies bound (D&O, E&O, cyber) | Seller | [__/__/____] | [____] | |
| 21.11 | Data room archived and access terminated | Both | [__/__/____] | [____] | |
| 21.12 | Transition services completed per TSA schedule | Both | Per TSA | [____] | |
| 21.13 | Indemnification claims (if any) submitted per agreement | Both | Per Agreement | [____] | |
| 21.14 | Escrow release (per escrow agreement timeline) | Escrow Agent | [__/__/____] | [____] | |
| 21.15 | Final closing binder assembled and distributed | Deal Counsel | [__/__/____] | [____] | |
| 21.16 | Record real property deeds in applicable county probate office | Deal Counsel | [__/__/____] | [____] |
PART VIII: PRACTICE NOTES -- ALABAMA-SPECIFIC
Key Alabama Considerations
-
Two-Chapter Framework: Alabama's merger law is found in two places: (a) the Alabama Business Corporation Law, Ala. Code 10A-2A (Chapter 2A), which replaced the former Chapter 2 effective January 1, 2020, via Act 2019-94; and (b) the general entity merger provisions in Ala. Code 10A-1-8.02. Ensure you are working under the correct chapter.
-
Filing Office: All merger certificates are filed with the Alabama Secretary of State, P.O. Box 5616, Montgomery, AL 36103-5616. Phone: (334) 242-7200.
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Filing Fee: The filing fee for a Certificate/Statement of Merger is $100 per Ala. Code 10A-1-4.31.
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Stockholder Approval: Under Ala. Code 10A-2A-11.04, a merger plan generally requires approval by a majority of votes entitled to be cast on the plan, plus approval by each required separate voting group. Review the certificate of incorporation and board-imposed conditions for greater requirements.
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Parent-Subsidiary or Sibling Merger: Under Ala. Code 10A-2A-11.05, a parent owning stock carrying at least 90% of the voting power of every voting class and series may use the statute's streamlined route without subsidiary board or stockholder approval, subject to governing-document and parent-side approval requirements.
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Dissenters' Rights: Alabama provides appraisal rights under Ala. Code 10A-2A-13.01 et seq. Shareholders who dissent from a merger are entitled to receive payment for the fair value of their shares. Proper notice and demand procedures must be followed strictly.
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No Bulk Sales Act: Alabama has repealed UCC Article 6 (Bulk Transfers). There is no general bulk sales compliance obligation in Alabama.
-
Business Privilege Tax: Alabama imposes a business privilege tax on entities doing business in the state (Ala. Code 40-14A-1 et seq.), based on net worth. Ensure this obligation is current before closing.
-
Deed Recording Tax: Alabama imposes a deed recording tax of $0.50 per $500 (or fraction) of value on covered transfers of real property (Ala. Code 40-22-1), subject to its adjustments and exemptions. Factor this into closing costs for asset deals involving real estate.
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County-Level Business Licenses: Alabama does not have a state-level general business license. Business licenses are issued at the county and municipal level. Ensure all local license transfers are addressed.
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Non-Competition Agreements: Alabama enforces reasonable non-competition agreements. However, Alabama has a protectable interest statute (Ala. Code 8-1-190 et seq.) that defines the requirements for enforceable restrictive covenants.
Common Pitfalls
- Using the old Chapter 2 citation (10A-2) instead of the current Chapter 2A (10A-2A) for corporation merger provisions
- Overlooking the 90%-of-voting-power threshold and the parent-side approval requirements for § 10A-2A-11.05 mergers
- Failing to address county-level occupational taxes and business licenses
- Not accounting for the business privilege tax as a separate obligation from corporate income tax
- Overlooking deed recording tax on real property transfers in asset deals
- Forgetting to withdraw foreign entity qualification after merger (if disappearing entity was foreign-qualified)
- Not addressing successor liability for county occupational taxes
RWI and Insurance Considerations
- D&O tail policies should be bound at or before closing. Typical tail period is 6 years.
- Confirm RWI policy covers Alabama-specific representations and does not exclude state-specific regulatory matters.
- For transactions involving real property, confirm environmental liability coverage under the RWI policy or obtain separate environmental insurance.
- Alabama workers' compensation insurance must be confirmed for post-closing operations.
Timing and Scheduling Notes
- Alabama Secretary of State processes filings within approximately 5-10 business days
- Expedited processing may be available; contact Secretary of State at (334) 242-7200
- HSR filing (if applicable): ordinarily 30 days after FTC/DOJ receipt of both required notifications; 15 days for a cash tender offer after receipt of the acquiring person's notification, subject to statutory extensions
- FTB/tax clearance: allow adequate time for Alabama Department of Revenue to process any tax clearance requests
- Dissenter's rights demand period must be factored into the timeline
SOURCES AND REFERENCES
- Alabama Business Corporation Law (Chapter 2A): Ala. Code 10A-2A
- Alabama Entity Mergers: Ala. Code 10A-1-8.02
- Alabama Secretary of State -- Business Entities: sos.alabama.gov
- Alabama Filing Fees: Ala. Code 10A-1-4.31
- Alabama Secretary of State Fee Schedule: sos.alabama.gov
- Hart-Scott-Rodino Act, 15 U.S.C. 18a; 2026 thresholds: ftc.gov
- Alabama Dissenters' Rights: Ala. Code 10A-2A-13.01 et seq.
About this template
- Last updated
- September 23, 2026
- Jurisdiction
- Alabama
- Category
- Corporate & Business
Legal authority
- Alabama Business Corporation Law, Ala. Code 10A-2A-11.01 through 10A-2A-11.08 (Mergers and Stock Exchanges)
- Alabama Business and Nonprofit Entities Code, Ala. Code 10A-1-8.02 (Mergers of Entities)
- Ala. Code 10A-2A-11.02 (Plan of Merger)
- Ala. Code 10A-2A-11.04 (Action on Plan of Merger)
- Ala. Code 10A-2A-11.05 (Parent-Subsidiary and Sibling Mergers)
- Ala. Code 10A-1-4.31 (Filing Fees)
- Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a
Corporate documents govern how a company makes decisions, records them, and handles disputes between owners, directors, and officers. Proper corporate paperwork is what lets a business take advantage of limited liability, pass clean audits, and survive an acquisition or investor review. Skipping formalities like written resolutions and signed consents is one of the fastest ways for a business owner to lose personal asset protection.
Not legal advice
This template is provided for informational purposes. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.
Checked against the law it cites
The statutes this template relies on are listed under Legal authority.
Ala. Code § 40-22-1(c) (checked September 23, 2026): "the privilege or license tax on all instruments which are executed to convey real or personal property situated in this state of the value of $500 or less shall be $.50, and upon all such instruments executed to convey real or personal property situated in this state of more than $500 in value there shall be paid the sum of $.50 for each $500 or fraction thereof in value of property conveyed by such instrument"
Ala. Code § 40-22-1(d) (checked September 23, 2026): "Upon the presentation of any instrument for record, the judge of probate shall calculate the amount of tax due based upon the actual purchase price paid or the actual value of the property as required in subsection (c)."
15 U.S.C. § 18a(a)-(b) (checked September 4, 2026): "Except as exempted by subsection (c), a covered acquisition requires premerger notification and expiration of the waiting period; the ordinary period ends on the thirtieth day after receipt, or the fifteenth day for a cash tender offer, subject to statutory extensions or early termination."
FTC 2026 HSR thresholds (checked September 4, 2026): "Effective February 17, 2026, the minimum size-of-transaction threshold is $133.9 million; the adjusted $10 million, $100 million, and $200 million statutory thresholds are $26.8 million, $267.8 million, and $535.5 million."
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