USA - ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser and Katie Sinclair, Dentons
member’s vote as set forth in the limited liability company agreement. The other structure is a “manager-managed” LLC, in which a person or entity is designated as the manager with decision-making rights as set forth in the limited liability company agreement. Members who are not managers often retain the right to consent to certain major decisions. A manager can be one person or several persons each having the ability to act independently or being required to act by majority, supermajor - ity, or unanimous vote, depending on the nature of the decision and the relative weight of each member’s vote as set forth in the limited liability company agreement. Corporation Governance For corporations, including REITs, governance is set forth in their articles of incorporation and their by-laws. The articles of incorporation are a filed, public document containing certain statu - torily required information, such as the name, registered office, and registered address of the corporation. The by-laws govern: • how shareholders vote for the members of the board of directors; • how the board elects officers; • the duties of the officers; • the frequency of shareholder meetings; • the frequency of board of directors’ meetings; and • other routine matters. In most corporations, all day-to-day decisions are made by the officers without the approval of owners who are not officers. Certain decisions outside the normal course of business will be made by the board of directors, again without input from owners who are not part of the board. Unless an owner is a director or officer, its only
governance right is to periodically vote for mem - bers 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. Cer - tain entities must pay an annual Business Privi - lege Tax in accordance with Sections 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 lease - hold estate or license 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 categorized into the fol - lowing types. • A tenancy for years is a leasehold estate “lim - ited 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 (Alabama 2005). If no time for termination is stated, the law construes the term to be from December 1st to December 1st (Section 35-9-3).
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