A written agreement among the shareholders of a close corporation holding a majority of the outstanding shares entitled to vote, whether solely among themselves or with a party not a shareholder, is not invalid, as between the parties to the agreement, on the ground that it so relates to the conduct of the business and affairs of the corporation as to restrict or interfere with the discretion or powers of the board of directors. The effect of any such agreement shall be to relieve the directors and impose upon the shareholders who are parties to the agreement the liability for managerial acts or omissions which is imposed on directors to the extent and so long as the discretion or powers of the board in its management of corporate affairs is controlled by such agreement.
Ala. Code § 10A-30-2.07
Agreements Restricting Discretion of Directors; Applicable to Corporations Formed as Close Corporations or Electing Close Corporation Status Prior to January 1, 1995.
Known as the Alabama Business and Nonprofit Entity Code
The act spans §§ 10A-1-1.01 to 10A-9A-9.09 (1,341 sections).
(Acts 1980, No. 80-633, p. 1094, §168; §10-2A-307; amended and renumbered by Act 2009-513, p. 967, §374.)
Official source: Alabama Legislature (ALISON). Reproduced from public-domain Alabama statutes; confirm against the official source for the current text. Not legal advice.