USA – ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser, Katie Sinclair and Courtney Dow, Dentons
REITs must pay the same filing fees as other Alabama entities required under Section 10A-1-4.31. When computing such fees, a REIT should treat its decla - ration of trust in the same manner as a certificate of formation. See Section 10A-10-1.13. REITs organised under Alabama law (Section 10A-10- 1.01 to -1.24) should file their declaration of trust in the same manner as the certificate of formation of an Alabama domestic filing entity. Section 10A-10- 1.06 identifies the requirements of a declaration of trust, and Section 10A-10-1.07 sets forth the division of classes of REIT shares permitted by Alabama law. REITs should follow Section 10A-10-1.11 regarding annual report requirements and submission require - ments to shareholders. 5.4 Minimum Capital Requirement There is no minimum capital requirement, though a nominal amount such as USD100 is common. 5.5 Applicable Governance Requirements LP Governance The governance structure of an LP is set out in the agreement of limited partnership, and generally pro - vides that most decisions be made by the GP. Ala - bama law allows certain voting rights for the LPs with - out jeopardising their status as LPs.
such as the name, registered office and registered address of the corporation. The by-laws govern: • shareholder voting; • board and officer elections; • officer duties; • shareholder/board meeting frequency; and • other routine matters. In most corporations, day-to-day decisions are made by the officers. Certain decisions outside the normal course of business will be made by the board of direc - tors. Unless an owner is a director or officer, its only governance right is to periodically vote for members of the board or in connection with certain statutorily required matters, such as merger transactions. 5.6 Annual Entity Maintenance and Accounting Compliance Maintenance and costs are variable and will depend on ownership/accounting structure. Certain entities must pay an annual Business Privilege Tax in accord - ance with Section 40-14A-21 through -29. The rate will vary depending on taxable income and net worth. See Section 40-14A-22. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time A real property’s fee owner may grant a leasehold estate or licence to permit others to occupy and use the owner’s real property for a limited timeframe. Leasehold estates allowing a tenant to occupy and use real estate without buying it outright are generally categorised into the following types. • A tenancy for years is a leasehold estate “limited to endure for a definite and ascertained period, fixed in advance”. See Waldrop v Siebert , 237 So 2d 493, 494 (Alabama 1970). • A periodic tenancy is one where the lease has no stated duration and periodic rent is reserved or paid. See Gulf Coast Realty Co, Inc v Prof’l Real Estate Partners, Inc , 926 So 2d 992, 1007 (Ala - bama 2005). If no time for termination is stated, the
LLC Governance An LLC may be:
• “member-managed”, where the members make decisions by majority, supermajority or unanimous vote, as set forth in the limited liability company agreement; or • “manager-managed”, where a designated manager holds decision-making rights. Members who are not managers often retain the right to consent to certain major decisions. Corporation Governance For corporations, including REITs, governance is set forth in their articles of incorporation and by-laws. The articles of incorporation are a filed, public document containing certain statutorily required information,
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