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Alabama House Bill 248: A Need-to-Know Brief for Nonprofit Leaders

Date postedSeptember 8, 2026

During the 2026 Alabama Legislative Session, the Alabama Legislature passed House Bill 248 (HB 248), legislation revising the Alabama Business and Nonprofit Entities Code. The legislation is designed to clarify statutory requirements, address technical issues, and codify certain principles of existing Alabama common law.

For nonprofit organizations, HB 248 is not a wholesale rewrite of nonprofit governance law. Instead, it provides greater clarity around several areas of governance and compliance, including conflict-of-interest transactions, member rights, corporate opportunities, and registered-agent requirements.

For nonprofit leaders, the most immediate consideration is understanding how these changes may affect your organization—and determining whether any action is appropriate before the December 31, 2026 deadline.

Key Changes for Alabama Nonprofits

The Alabama Association of Nonprofits (AAN) has prepared this summary to help nonprofit leaders quickly understand the provisions of HB 248 that may have the greatest practical relevance to their organizations. Many of the changes clarify existing requirements or codify principles already recognized under Alabama common law. AAN’s review indicates that the legislation is intended primarily to provide greater clarity and consistency within Alabama’s business and nonprofit statutes. It should not, by itself, be viewed as an indication of increased scrutiny of Alabama nonprofit organizations, their work, structure, or members.

AAN’s goal is to ensure that nonprofit leaders have the information they need to assess the potential impact on their organizations, engage in appropriate legal counsel, and make informed governance decisions.

Below are several key provisions nonprofit leaders should be aware of:

Governance and Conflict of Interest: HB 248 establishes more detailed procedures (“safe harbors”) for approving conflict-of-interest transactions. It also updated definitions related to director independence and disinterested decision making and encourages stronger governance practices and clearer board. To learn more about these governance and conflict of interest changes, click here.

Member Rights: HB 248 revises rules governing member inspection of organizational records and allows reasonable limitations to protect confidential information and records associated with litigation. To learn more about these changes click here.

Corporate Opportunity: HB 248 creates procedures allowing boards to formally decline business opportunities, providing liability protection for directors and officers when statutory requirements are met. To read more about the corporate opportunity changes click here.

Registered Agent Requirements: HB248 requires registered agents to maintain a physical Alabama address process service. We have listed a few of the detailed changes here.

The Opt-Out Provision: One of the most significant aspects of HB 248 is that nonprofits existing before August 1, 2026, may elect by December 31, 2026, to remain governed by the prior nonprofit law for Chapter 3A changes. This decision should not be viewed as a default “yes” or “no.” Each organization should evaluate the option with legal counsel based on its governance structure, bylaws, and risk profile. This is not a decision that should be treated as an automatic “yes” or “no.” Each organization should consider the potential implications to own governance structure, bylaws, policies, and risk profile. AAN strongly encourages organizations considering this option to consult qualified Alabama nonprofit legal counsel before making a decision. AAN has prepared additional resources providing a more detailed overview of these changes here.

Recommended Next Steps

AAN encourages nonprofit leaders to treat HB 248 as an opportunity to conduct a focused review of their organization’s governance and compliance practices. Before the December 31, 2026 deadline, organizations should consider:

  • Consulting qualified Alabama nonprofit legal counsel to determine whether HB 248 requires or recommends action by the organization, particularly with respect to the opt-out provision.
  • Reviewing and, where appropriate, updating:
     o Conflict-of-interest policies
     o Board governance procedures
     o Member records and inspection policies, if applicable
     o Registered-agent information
  • Reviewing organizational bylaws and governance practices to identify provisions that may warrant further consideration considering the statutory changes.
  • Monitoring additional guidance and best practices as legal interpretations and implementation practices develop.


AAN encourages our members not to view HB 248 as a wholesale change to how their organizations operate. However, the legislation creates several important governance and compliance considerations and the December 31, 2026, opt-out deadline makes timely review particularly important for eligible organizations.


The Alabama Association of Nonprofits is committed to helping nonprofit organizations understand and navigate changes that may affect their governance, operations, and long-term sustainability.

Questions about HB 248? Please contact Mandla Moyo at mandla@alabamanonprofits.org. 

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