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Alabama Professional Corporation By-Laws

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BY-LAWS OF ALABAMA PROFESSIONAL CORPORATION

SAMPLE BY-LAWS

ALABAMA PROFESSIONAL CORPORATION

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BY-LAWS

OF

ARTICLE I. NAME AND LOCATION

SECTION 1. The name of this Alabama Professional Corporation (“the corporation”) shall be .

SECTION 2. The Principal office of the corporation in the State of Alabama shall be , , Alabama, and its initial registered office in the State of Alabama shall be , Alabama.

ARTICLE II. SHAREHOLDERS

SECTION 1. Annual Meeting. The annual meeting of the shareholders shall be held on the second Tuesday of the month of December in each year, beginning with the year at the time designated by the Board of Directors.

SECTION 2. Special Meeting. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by resolution of the Board of Directors or by the President at the request of the holders of not less than a majority of all the outstanding shares.

SECTION 3. Place of Meeting. The Board of Directors may designate any place, either within or without the State of Alabama unless otherwise prescribed by statute as the place of meeting for any annual meeting or for any special meeting of shareholders.

SECTION 4. Notice of Meeting. Written or printed notice stating the place, day and hour of the meeting shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting.

SECTION 5. Closing of Transfer Books or Fixing of Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, the Board of Directors may provide that the stock transfer books shall be closed for a stated period.

SECTION 6. Shareholders' List. After fixing a record date, the officer or agent having charge of the share ledger of the corporation shall prepare an alphabetical list of all persons entitled to notice and to represent shares at such meeting.

SECTION 7. Quorum. A majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders.

SECTION 8. Proxies. At all meetings of shareholders, a shareholder may vote by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact.

SECTION 9. Voting of Shares. Subject to the provisions of Section 12 of this Article II, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders.

SECTION 10. Voting of Share by Certain Holders. Shares standing in the name of another corporation may be voted by such officer, agent or proxy as the By-Laws of such corporation may preserve.

SECTION 11. Informal Action by Shareholders. Any action required to be taken at a meeting of the shareholders may be taken without a meeting if a consent in writing is signed by all of the shareholders entitled to vote.

SECTION 12. Cumulative Voting. Each shareholder entitled to vote shall have the right to cumulate votes for Directors as provided by law.

SECTION 13. Shareholders and Transfer of Shares: Limitations. The corporation may issue shares only to qualified persons authorized by law in Alabama to engage in the practice of .

ARTICLE III. BOARD OF DIRECTORS

SECTION 1. General Powers. The business and affairs of the corporation shall be managed by its Board of Directors except as otherwise herein provided.

SECTION 2. Number, Tenure and Qualifications. The number of Directors of the corporation shall be ().

SECTION 3. Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this By-Law immediately after, and at the same place as the annual meeting of shareholders.

SECTION 4. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the President or any Director.

SECTION 5. Notice. Notice of any special meeting shall be given at least five (5) days previously thereto by notice personally given or mailed to each Director.

SECTION 6. Quorum. A majority of the number of Directors fixed by Section 2 of this Article III shall constitute a quorum for the transaction of business at any meeting of the Board of Directors.

SECTION 7. Manner of Acting. The act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

SECTION 8. Compensation. By resolution of the Board of Directors, the Directors may be paid their expenses and may be paid a fixed sum for attendance at each meeting of the Board of Directors.

SECTION 9. Presumption of Assent. A Director present at a meeting shall be presumed to have assented to the action taken unless his dissent is entered in the minutes.

SECTION 10. Informal Action by Board of Directors. Any action required to be taken at a meeting of the Directors may be taken without a meeting if a consent in writing is signed by each director.

ARTICLE IV. OFFICERS

SECTION 1. Number. The officers of the corporation shall be a [President and Secretary required].

SECTION 2. Election and Term of Office. The officers shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders.

SECTION 3. Removal. Any officer or agent elected or appointed by the Board of Directors may be removed whenever in its judgment the best interest of the corporation would be served thereby.

SECTION 4. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors.

SECTION 5. President. The President shall be the principal executive officer of the corporation and shall supervise and control all business and affairs.

SECTION 6. Vice-President. The Board of Directors may determine when there is a need for a Vice-President or Vice-Presidents.

SECTION 7. Secretary. The Secretary shall keep the minutes, maintain corporate records, and perform the duties of Secretary.

SECTION 8. Salaries. The salaries, compensation and other benefits of the officers shall be fixed from time to time by the Board of Directors.

ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS

SECTION 1. Contracts. The Board of Directors may authorize any officer or agents to enter into any contract on behalf of the corporation.

SECTION 2. Loans. No loans shall be contracted on behalf of the corporation unless authorized by a resolution of the Board of Directors.

SECTION 3. Checks, Drafts, etc. All checks, drafts, or other orders for the payment of money shall be signed by such officer or officers as determined by resolution of the Board of Directors.

SECTION 4. Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time in such banks or depositories as the Board of Directors may select.

ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER

SECTION 1. Certificates for Shares. Certificates representing shares of the corporation shall be in such form as shall be determined by the Board of Directors.

SECTION 2. Transfer of Shares. Transfer of shares of the corporation shall be made only on the stock transfer books of the corporation subject to limitations set forth in the Articles of Incorporation.

ARTICLE VII. FISCAL YEAR

The fiscal year of the corporation shall begin on the 1st day of January and end on the 31st day of December in each year.

ARTICLE VIII. DIVIDENDS

The Board of Directors may from time to time declare and pay dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Articles of Incorporation.

ARTICLE IX. SEAL

The Board of Directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the corporation and the state of incorporation and the words "Corporate Seal."

ARTICLE X. WAIVER OF NOTICE

Whenever any notice is required to be given to any shareholder or Director, a waiver thereof in writing shall be equivalent to the giving of such notice.

ARTICLE XI. AMENDMENTS

These By-Laws may be altered, amended or repealed by a majority vote of the Board of Directors or by a majority vote of the shareholders.

END BY-LAWS

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What the Alabama Professional Corporation By-Laws Are

Alabama Professional Corporation By-Laws are the internal rules that govern a professional corporation organized under Alabama law. They set officer roles, board structure, meeting procedures, voting rules, share ownership restrictions tied to professional licensure, and amendment processes. Bylaws are typically adopted by the incorporators or board and kept with corporate records; they are not usually filed with the Alabama Secretary of State. Clear bylaws reduce internal disputes, guide corporate decision-making, and establish how licensed professionals may own or transfer shares within the corporation.

Why well-drafted bylaws matter

Bylaws create predictable governance, document decision authority, and help protect limited liability for owners. They also define professional-license restrictions, approval processes, and succession rules tailored to Alabama professional corporations.

Why well-drafted bylaws matter

Who typically prepares and relies on these bylaws

These bylaws are prepared and used by a small set of corporate stakeholders responsible for governance and regulatory compliance.

  • Licensed professionals and owners who must meet state licensure ownership rules and corporate eligibility
  • Corporate officers and directors who implement governance, hold meetings, and maintain records
  • Corporate counsel or outside attorneys who draft, review, and update bylaws to align with Alabama law

Keep bylaws accessible to officers and counsel; distribute updated versions after each amendment and record adoption in meeting minutes.

Primary user profiles

Corporate Officer

A president, secretary, or treasurer who enforces day-to-day governance. Officers need clear bylaws to administer meetings, sign documents, and maintain corporate records in compliance with Alabama corporate practice rules.

Corporate Counsel

An in-house or outside attorney who drafts and reviews bylaws to ensure compliance with state statutes, professional licensing requirements, and contractual obligations; counsel documents amendment history and advises on dispute resolution clauses.

Core components included in professional corporation bylaws

A professional corporation’s bylaws combine standard corporate governance items with profession-specific rules to address licensure, ownership, and transfer limitations.

Purpose Clause

Defines the professional services the corporation will provide and confirms that only licensed professionals may perform those services; helps align corporate activity with professional licensing boards and scope of practice.

Shareholder Eligibility

Specifies that only individuals licensed in the applicable profession may hold shares, sets documentation requirements for licensure, and provides procedures for share transfers when licensure changes.

Board Structure

Details the number and qualifications of directors, staggered terms if used, quorum and voting thresholds, and procedures for filling vacancies consistent with profession-specific rules.

Officer Duties

Assigns roles for president, secretary, treasurer and any other officers; clarifies authority to execute contracts, manage finances, and represent the corporation to regulators.

Meetings and Voting

Sets the schedule for annual shareholder and board meetings, notice requirements, voting methods (including proxies), and rules for special meetings to ensure valid corporate actions.

Amendment Process

Specifies how bylaws may be amended, required notice to shareholders, voting majorities for amendments, and any restrictions tied to licensure or regulatory approvals.

Step-by-step: adopt bylaws for an Alabama professional corporation

Follow these standard steps to draft, approve, and record an adopted set of bylaws for a professional corporation.

  • 01
    Draft: Prepare an initial draft aligned with Articles of Incorporation
  • 02
    Legal Review: Have corporate counsel verify licensure and statutory compliance
  • 03
    Board Approval: Hold a board meeting and vote to adopt the bylaws
  • 04
    Recordkeeping: Attach signed bylaws to corporate minutes and store securely

How adoption and internal distribution typically flow

A standard governance workflow moves from drafting to approval and secure retention, with distribution to officers and counsel.

  • Drafting: Draft by counsel or managing shareholder; incorporate profession-specific provisions
  • Review: Circulate to directors and counsel for comment and revision
  • Adoption: Board votes; record resolution in meeting minutes
  • Distribution: Provide executed copies to officers and retain originals in corporate records

Digital workflow settings for completing bylaws online

When using a document platform, configure fields and signer order to match corporate signatory requirements.

Field Configuration
Signing Order Board chair then officers; sequential order recommended
Authentication Email verification with optional SMS code for higher assurance
Template Locking Lock core governance clauses to prevent unauthorized edits
Retention Policy Retain signed bylaws and minutes for the corporate retention period

Technical considerations for e-signature and storage

Choose a platform that supports secure signatures, audit trails, and access controls suited to corporate records.

  • File Formats: Supports PDF and DOCX documents
  • Integrations: Connects with Google Workspace and document repositories
  • Authentication: Email, SMS, or stronger signer verification options

Ensure the chosen system provides tamper-evident signed copies, a retrievable audit trail, and secure long-term storage to meet retention obligations.

Key dates and timing to track

Keep track of adoption and routine governance dates to maintain compliance and ensure corporate actions are valid.

Adoption Date:

Date bylaws are approved and enter into effect

Annual Meeting Timing:

Set date for shareholder or board annual meetings per bylaws

Record Retention Start:

Retention period begins on the adoption or record-creation date

Amendment Effective Date:

Date specified in amendment when changes take effect

Periodic Review:

Schedule regular review at least every 2–3 years

Milestone timeline for adopting and preserving bylaws

A simple milestone view can help stakeholders track progress from drafting to long-term retention.

01

Draft Completion

Finalize the draft text and internal review comments

02

Legal Clearance

Counsel confirms licensure and statutory alignment

03

Board Vote

Formal vote to adopt bylaws recorded in minutes

04

Archive Originals

Store signed bylaws and minutes in secure corporate records

Common pitfalls to avoid when preparing bylaws

  • Drafting bylaws that conflict with the Articles of Incorporation or with state professional corporation rules can invalidate corporate actions and cause regulatory scrutiny.
  • Failing to restrict ownership or transferability of shares to licensed professionals can lead to unlicensed practice and potential sanctions from licensing boards.
  • Not recording the adoption vote in the corporate minutes or failing to distribute signed copies can make later approvals difficult to verify.
  • Using vague amendment procedures or undefined quorum and voting thresholds creates uncertainty and increases the risk of governance disputes.

Consequences of incorrect or missing bylaws

Regulatory Action: Discipline from licensing boards
Loss of Limited Liability: Risk of veil piercing in disputes
Invalid Corporate Acts: Contracts may be challenged
Tax Complications: Issues during audits or filings
Ownership Disputes: Share transfers may be contested
Operational Delays: Board actions stalled by ambiguity

Recordkeeping and security considerations

Access Controls: Limit access to officers and counsel
Audit Trail: Retain signer IP and timestamps
Encryption: Encrypt records at rest
Backups: Store offsite backups regularly
Versioning: Keep historical amendment versions
BAA Considerations: Use BAA if PHI is present

eSignature vendor comparison for completing and storing bylaws

Compare starting prices and key platform limits; signNow appears first. Confirm plan features and enterprise options directly with vendors.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes (Business Premium) Yes Yes Yes Varies
Audit Trail Yes Yes Yes Yes Yes
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

How organizations use professional corporation bylaws in practice

Two practical scenarios show common uses: creating licensing rules and documenting succession plans.

Licensure and Ownership Rules

A midsize medical practice codified that only state-licensed physicians may hold shares.

  • The point: protect license-based ownership.
  • The outcome: clearer transfer rules reduced disputes and ensured the practice complied with state licensing board expectations while preserving governance continuity for future ownership changes.

Succession and Continuity

A small legal firm added a detailed succession clause for retiring shareholders.

  • The point: predefine buyout mechanics.
  • The outcome: the firm avoided post-exit disputes, accelerated partner transitions, and provided prospective buyers and lenders with documented governance and financial procedures that supported confidence in continuity planning.

Practical tips for accurate and efficient completion

Follow these practical steps to reduce risk and make bylaws easy to administer over time.

Align with Articles of Incorporation
Ensure every bylaw provision is consistent with the Articles of Incorporation; inconsistencies can create legal uncertainty and complicate enforcement.
Define Share Restrictions Clearly
Specify licensing, transfer approval processes, and consequences for loss of license to protect the corporation and comply with professional regulations.
Record and Preserve Minutes
Document the adopting board resolution in signed minutes and attach the executed bylaws to the corporate minute book for later verification.
Schedule Regular Reviews
Review bylaws periodically and after significant regulatory or ownership changes to keep governance aligned with current law and business needs.

Frequently asked questions about Alabama Professional Corporation By-Laws

Answers address common practical and legal questions about adoption, signature, electronic execution, and retention of bylaws.


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