Alabama Constitution Section 230 Cancellation of certain corporate charters
Alabama Constitution – Section 230: Cancellation of Certain Corporate Charters
Text of Section 230:
"The legislature shall pass such laws as may be necessary and proper for the cancellation or forfeiture of the charters of all corporations for abuse, misuse, or nonuse of their corporate powers and franchises, or for failure to comply with the laws of the state."
Explanation:
This section requires the Alabama Legislature to create laws that allow the revocation ("cancellation or forfeiture") of corporate charters under certain circumstances.
Key Conditions for Charter Cancellation:
Abuse of corporate powers – Using corporate status for illegal or improper purposes.
Misuse of powers – Operating outside the lawful scope of the corporation's purpose.
Nonuse of powers – Failing to actually operate or function as a corporation.
Failure to comply with state laws – Ignoring or violating Alabama's statutory requirements for corporations.
Purpose:
To ensure accountability of corporations operating in Alabama.
To provide the state with a legal mechanism to dissolve or revoke the rights of corporations that violate public trust or law.
To prevent corporations from existing in name only or from engaging in misconduct without consequences.
In Practice:
The legislature may empower state agencies (like the Secretary of State or Attorney General) or courts to initiate charter cancellations. This section acts as a constitutional mandate that such laws must exist.
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