Alabama § 10A-2A-8.32 - Directors’ Liability for Unlawful Distributions.
Full text of Alabama Code of Alabama § 10A-2A-8.32 — Directors’ Liability for Unlawful Distributions., with citation guidance and answers to common questions.
§ 10A-2A-8.32. Directors’ Liability for Unlawful Distributions.
(a) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to Section 10A-2A-6.40(a) or Section 10A-2A-14.08(a) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating Section 10A-2A-6.40(a) or Section 10A-2A-14.08(a) if the party asserting liability establishes that when taking the action the director did not comply with Section 10A-2A-8.30.
(b) A director held liable under subsection (a) for an unlawful distribution is entitled to:
(1) contribution from every other director who could be held liable under subsection (a) for the unlawful distribution; and
(2) recoupment from each stockholder of the pro-rata portion of the amount of the unlawful distribution the stockholder accepted, knowing the distribution was made in violation of Section 10A-2A-6.40(a) or Section 10A-2A-14.08(a).
(c) A proceeding to enforce:
(1) the liability of a director under subsection (a) is barred unless it is commenced within two years after the date (i) on which the effect of the distribution was measured under Section 10A-2A-6.40(e) or (g), (ii) as of which the violation of Section 10A-2A-6.40(a) occurred as the consequence of disregard of a restriction in the certificate of incorporation, or (iii) on which the distribution of assets to stockholders under Section 10A-2A-14.08(a) was made; or
(2) contribution or recoupment under subsection (b) is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection (a).
Source: official Alabama text · Last verified 2026-08-27
Frequently Asked Questions About Alabama § 10A-2A-8.32
What does Code of Alabama § 10A-2A-8.32 cover?
Section 10A-2A-8.32 ("Directors’ Liability for Unlawful Distributions.") is part of the Code of Alabama, the codified statutory law of Alabama. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Alabama § 10A-2A-8.32?
A common citation format is "Code of Alabama § 10A-2A-8.32" (Alabama). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Alabama law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Alabama official source linked on this page or consult a licensed Alabama attorney.
How does Alabama § 10A-2A-8.32 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Alabama can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Alabama.