Alabama Constitution Section 251 Termination of business
Here is the full text and explanation for Section 251 of the Alabama Constitution:
Alabama Constitution – Section 251
Termination of business
“The legislature shall provide for the appropriate means by which any association or corporation may be dissolved or its business terminated, subject to the rights of stockholders and creditors.”
Explanation:
Section 251 gives the Alabama Legislature the responsibility to create laws for how corporations or associations can be legally dissolved or have their business operations terminated.
🔍 Key Points:
Legislative Authority: Only the legislature can establish the rules and procedures for how a business ends its existence.
Protection of Rights:
When a corporation is dissolved or terminated, the rights of stockholders (owners) and creditors (those owed money) must be protected.
This ensures fair treatment during liquidation, mergers, or voluntary closures.
Purpose:
This section ensures:
That businesses cannot dissolve in a way that harms investors or lenders.
That a structured, lawful process is in place for closing down businesses.
The public and economic interests are safeguarded during corporate terminations.
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