Alabama Constitution Section 236 Security for dues from private corporations liability of stockholders
Alabama Constitution – Section 236:
Text:
"The legislature shall not have power to relieve the stockholders of any corporation or joint-stock association from the payment of the liabilities of such corporation or association, while the property of the same remains in possession."
Explanation:
Section 236 of the Alabama Constitution addresses financial responsibility and liability within corporations and joint-stock associations.
Key Points:
Stockholder Liability Cannot Be Waived:
The Alabama Legislature is not allowed to pass laws that excuse or relieve stockholders from paying debts or liabilities owed by the corporation, as long as the corporation still owns property.
Protection of Creditors and the Public:
This ensures that corporations and their owners remain financially accountable.
Creditors can rely on corporate assets—and potentially stockholder liability—to recover what they are owed.
Prevents Abuse:
Prevents stockholders from keeping the assets of a corporation while avoiding its debts through legislative intervention.
In summary: Stockholders in Alabama remain responsible for corporate liabilities unless the corporation no longer has property. The state legislature cannot interfere to protect them from those debts while assets remain.
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