45-21 Conversions and Mergers
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<![CDATA[CHAPTER 45-21CONVERSIONS AND MERGERS45-21-01. (901) Definitions - Conversions and mergers. For the purposes of thischapter, unless the context otherwise requires:1."Certificate of creation" means:a.A certificate of incorporation, if the converted organization is a corporation<br>deemed to be incorporated under chapter 10-19.1;b.A certificate of organization, if the converted organization is a limited liability<br>company deemed to be organized under chapter 10-32;c.A certificate of limited partnership, if the converted organization is a limited<br>partnership deemed to be formed under chapter 45-10.2;d.The filed registration, if the converted organization is a limited liability<br>partnership deemed to be established under chapter 45-22; ore.A certificate of limited liability limited partnership, if the converted organization<br>is a limited liability limited partnership deemed to be formed under chapter<br>45-23.2."Constituent organization" means an organization that is party to a merger.3."Constituent partnership" means a constituent organization that is a partnership.4."Converted organization"means the organization into which a convertingorganization converts pursuant to sections 45-21-01 through 45-21-07.1.5."Converting organization" means an organization that converts into another<br>organization pursuant to sections 45-21-01 through 45-21-07.1.6."Converting partnership" means a converting organization that is a partnership.7."Date of origin" means the date on which:a.A corporation that is:(1)The converting organization was incorporated; or(2)The converted organization is deemed to be incorporated;b.A limited liability company that is:(1)The converting organization was organized; or(2)The converted organization is deemed to be organized;c.A general partnership that is the converting organization was formed;d.A general partnership that is the converted organization was formed;e.A limited partnership that is:(1)The converting organization was formed; orPage No. 1(2)The converted organization is deemed to be formed;f.A limited liability partnership that is:(1)The converting organization was established; or(2)The converted organization is deemed to be established; andg.A limited liability limited partnership that is:(1)The converting organization was formed; or(2)The converted organization was deemed to be formed.8."Filed registration" means the registration of a limited liability partnership that has<br>been filed with the secretary of state.9."General partner" means a partner in a partnership and a general partner in a limited<br>partnership.10."General partnership" means an organization formed by two or more persons under<br>chapters 45-13 through 45-21.11."Governing statute" means:a.With respect to a domestic organization, the following chapters of this code<br>which govern the internal affairs of the organization:(1)If a corporation, then chapter 10-19.1;(2)If a limited liability company, then chapter 10-32;(3)If a limited partnership, then chapter 45-10.2;(4)If a general partnership, then chapters 45-13 through 45-21;(5)If a limited liability partnership, then chapter 45-22; and(6)If a limited liability limited partnership, then chapter 45-23; andb.With respect to a foreign organization, the laws of the jurisdiction under which<br>the organization is created and under which the internal affairs of the<br>organization are governed.12."Limited partner" means a limited partner in a limited partnership.13."Limited partnership" means a partnership that is formed by two or more persons<br>under chapter 45-10.2, predecessor law, or comparable law of another jurisdiction<br>and which has one or more general partners and one or more limited partners.14."Organizational records" means for an organization that is:a.A corporation, its articles of incorporation and bylaws;b.A limited liability company, its articles of organization, operating agreement or<br>bylaws, and any member-control agreement;c.A limited partnership, its partnership agreement;Page No. 2d.A general partnership, its partnership agreement;e.A limited liability partnership, its partnership agreement; orf.A limited liability limited partnership, its partnership agreement.15."Originating record" means for an organization that is:a.A corporation, its articles of incorporation;b.A limited liability company, its articles of organization;c.A limited partnership, its certificate of limited partnership;d.A limited liability partnership, its registration; ore.A limited liability limited partnership, its certificate of limited liability limited<br>partnership.16."Ownership interest" means for an organization which is:a.A corporation, its shares;b.A limited liability company, its membership interests;c.A limited partnership, its partnership interests;d.A general partnership, its partnership interests;e.A limited liability partnership, its partnership interests; orf.A limited liability limited partnership, its partnership interests.17."Partner" includes both a general partner and a limited partner.18."Surviving organization" means an organization into which one or more other<br>organizations are merged and which:a.May preexist the merger; orb.Be created by the merger.45-21-02. (902) Conversion. Other organizations may not convert to a partnership.However, a partnership may convert to another organization pursuant to sections 45-21-01<br>through 45-21-07.1 and a plan of conversion, if:1.The governing statute of the other organization authorizes the conversion;2.The conversion is not prohibited by the law of the jurisdiction that enacted the<br>governing statute; and3.The other organization complies with its governing statute in effecting the<br>conversion.45-21-02.1. Plan of conversion. A plan of conversion must be in a record and mustinclude:1.The name and form of the converting organization before conversion;Page No. 32.The name and form of the converted organization after conversion;3.The terms and conditions of the conversion;4.The manner and basis for converting each ownership interest in the converting<br>organization into ownership interests in the converted organization, or in whole or in<br>part, into money or other property;5.The organizational records of the converted organization; and6.Any other provisions with respect to the proposed conversion that are deemed to be<br>necessary or desirable.45-21-03. (903) Plan of conversion approval and amendment.1.If the converting organization is a partnership, then:a.A plan of conversion must be consented to by all of the partners of a converting<br>partnership.b.Subject to any contractual rights, after a conversion is approved, and at any<br>time before a filing is made under section 45-21-04, a converting partnership<br>may amend the plan or abandon the planned conversion:(1)As provided in the plan; and(2)Except as prohibited by the plan, by the same consent as was required to<br>approve the plan.2.If the converting organization is not a partnership, then the approval and the<br>amendment of the plan of conversion must comply with the governing statute in<br>effecting the conversion.45-21-04. (904) Statement of conversion.1.Upon receiving the approval required by section 45-21-03, a statement of conversion<br>must be prepared in a record that must contain:a.A statement that the converting organization is being converted into another<br>organization, including:(1)The name of the converting organization immediately before the filing of<br>the statement of conversion;(2)The name to which the name of the converting organization is to be<br>changed, which must be a name that satisfies the laws applicable to the<br>converted organization;(3)The form of organization that the converted organization will be; and(4)The jurisdiction of the governing statute of the converted organization;b.A statement that the plan of conversion has been approved by the converting<br>organization as provided in section 45-21-03;c.A statement that the plan of conversion has been approved as required by the<br>governing statute of the converted organization;d.The plan of conversion without organizational records;Page No. 4e.A copy of the originating record of the converted organization; andf.If the converted organization is a foreign organization not authorized to transact<br>business or conduct activities in this state, then the street and mailing address<br>of an office which the secretary of state may use for the purposes of<br>subsection 3 of section 45-21-03.2.The statement of conversion must be signed on behalf of the converting organization<br>and filed with the secretary of state.a.If the converted organization is a domestic organization, then:(1)The filing of the statement of conversion must also include the filing with<br>the secretary of state of the originating record of the converted<br>organization.(2)Upon both the statement of conversion and the originating record of the<br>converted organization being filed with the secretary of state, the<br>secretary of state shall issue a certificate of conversion and the<br>appropriate certificate of creation to the converted organization or its<br>legal representative.b.If the converted organization is a foreign organization:(1)That is transacting business or conducting activities in this state, then:(a)The filing of the statement of conversion must include the filing with<br>the secretary of state of an application for certificate of authority by<br>the converted organization.(b)Upon both the statement of conversion and the application for a<br>certificate of authority by the converted organization being filed<br>with the secretary of state, the secretary of state shall issue a<br>certificate of conversion and the appropriate certificate of authority<br>to the converted organization or the legal representative.(2)That is not transacting business or conducting activities in this state, then<br>upon the statement of conversion being filed with the secretary of state,<br>the secretary of state shall issue the appropriate certificate of conversion<br>to the converted organization or its legal representative.3.A converting organization that is the owner of a trademark or trade name, is a<br>general partner named in a fictitious name certificate, is a general partner in a<br>limited partnership or a limited liability limited partnership, or is a managing partner<br>of a limited liability partnership that is on file with the secretary of state must change<br>or amend the name of the converting organization to the name of the converted<br>organization in each registration when filing the statement of conversion.45-21-04.1. Abandonment of conversion.1.If the statement of conversion has not been filed with the secretary of state, and:a.If the converting organization is a partnership, then subject to any contractual<br>rights, after a conversion is approved, and at any time before the effective date<br>of the plan, a converting partnership may abandon the planned conversion:(1)As provided in the plan; andPage No. 5(2)Except as provided otherwise by the plan, by the same consent as was<br>required to approve the plan.b.If the converting organization is not a partnership, then the abandonment of the<br>plan of conversion must comply with its governing statute.2.If the statement of conversion has been filed with the secretary of state, but has not<br>yet become effective, then the converting organization shall file with the secretary of<br>state articles of abandonment that contain:a.The name of the converting organization;b.The provision of this section under which the plan is abandoned; andc.If the plan is abandoned:(1)By the consent of all of the partners, then the text of the resolution<br>abandoning the plan; or(2)As provided in the plan, then a statement that the plan provides for<br>abandonment and that all conditions for abandonment set forth in the<br>plan are met.45-21-04.2. Effective date of conversion - Effect.1.A conversion is effective when the filing requirements of subsection 2 of section<br>45-21-04 have been fulfilled or on a later date specified in the statement of<br>conversion.2.With respect to the effect of conversion on the converting organization and on the<br>converted organization:a.An organization that has been converted as provided in sections 45-21-01<br>through 45-21-07.1 is for all purposes the same entity that existed before the<br>conversion.b.Upon a conversion becoming effective:(1)If the converted organization is not a partnership, then the converted<br>organization has all the rights, privileges, immunities, and powers, and is<br>subject to the duties and liabilities as provided in its governing statute;(2)All property owned by the converting organization remains vested in the<br>converted organization;(3)All debts, liabilities, and other obligations of the converting organization<br>continue as obligations of the converted organization;(4)An action or proceeding pending by or against the converting<br>organization may be continued as if the conversion had not occurred;(5)Except as otherwise provided by other law, all rights, privileges,<br>immunities, and powers of the converting organization remain vested in<br>the converted organization;(6)Except as otherwise provided in the plan of conversion, the terms and<br>conditions of the plan of conversion take effect; andPage No. 6(7)Except as otherwise agreed, the conversion does not dissolve a<br>converting partnership for the purposes of sections 45-20-01 through<br>45-20-07.3.When a conversion becomes effective, each ownership interest in the converting<br>organization is deemed to be converted into ownership interests in the converted<br>organization or, in whole or in part, into money or other property to be received<br>under the plan.4.A converted organization that is a foreign organization consents to the jurisdiction of<br>the courts of this state to enforce any obligations owed by the converting<br>partnership, if before the conversion the converting partnership was subject to suit in<br>this state on the obligation.5.A converted organization that is a foreign organization and not authorized to transact<br>business or conduct activities in this state appoints the secretary of state as its agent<br>for service of process for purposes of enforcing an obligation under this subsection<br>as provided in section 10-01.1-13.45-21-05. (905) Merger of partnerships.1.Pursuant to a plan of merger approved as provided in subsection 3, a partnership<br>may be merged with one or more other organizations.2.The plan of merger must set forth:a.The name of:(1)The partnership;(2)Each other constituent organization proposing to merge; and(3)The surviving organization into which the other organizations will merge;b.The status of each partner;c.The terms and conditions of the merger;d.The manner and basis of converting the ownership interests of each constituent<br>organizationintoownershipinterestsorobligationsofthesurvivingorganization, or into money or other property in whole or part; ande.The street address of the principal executive office of the surviving organization.3.The plan of merger must be approved:a.In the case of a partnership that is a party to the merger, by all of the partners,<br>or a number or percentage specified for merger in the partnership agreement;<br>andb.In the case of a constituent organization other than a partnership that is a party<br>to the merger, by the vote required for approval of a merger by the governing<br>statute of the constituent organization in the jurisdiction in which the constituent<br>organization is organized.4.After a plan of merger is approved and before the merger takes effect, the plan may<br>be amended or abandoned as provided in the plan.5.The merger takes effect on the later of:Page No. 7a.The approval of the plan of merger by all constituent organizations, as provided<br>in subsection 3;b.The filing of all records required by law to be filed as a condition to the<br>effectiveness of the merger; orc.Any effective date specified in the plan of merger.45-21-06. (906) Effect of merger.1.When a merger takes effect:a.The separate existence of each constituent partnership that is a party to the<br>merger, other than the surviving organization, ceases;b.All property owned by each of the constituent partnerships vests in the surviving<br>organization;c.All obligations of each constituent partnership become the obligations of the<br>surviving organization; andd.An action or proceeding pending against a constituent partnership may be<br>continued as if the merger had not occurred, or the surviving organization may<br>be substituted as a party to the action or proceeding.2.The secretary of state of this state is the agent for service of process in an action or<br>proceeding against a surviving foreign partnership to enforce an obligation of a<br>partnership that is a constituent organization.The surviving organization shallpromptly notify the secretary of state of the mailing address of its principal executive<br>office and of any change of address. Upon receipt of process, the secretary of state<br>shall mail a copy of the process to the surviving foreign partnership as provided in<br>section 10-01.1-13.3.A general partner of the surviving partnership is liable for:a.All obligations of a party to the merger for which the general partner was<br>personally liable before the merger;b.All other obligations of the surviving organization incurred before the merger by<br>a constituent organization, but those obligations may be satisfied only out of<br>property of the surviving organization; andc.All obligations of the surviving organization incurred after the merger takes<br>effect.4.If the obligations incurred before the merger by a constituent partnership are not<br>satisfied out of the property of the surviving organization, then the general partners<br>of the constituent partnership immediately before the effective date of the merger<br>shall contribute the amount necessary to satisfy the obligations of the constituent<br>partnership to the surviving organization, in the manner provided in section<br>45-20-07.5.A partner of a constituent partnership who does not receive an ownership interest of<br>the surviving organization is dissociated from the partnership, of which that partner<br>was a partner, as of the date the merger takes effect. The surviving organization<br>shall cause the ownership interest of the partner in the constituent partnership to be<br>purchased under section 45-19-01 or another statute specifically applicable to that<br>ownership interest of that partner with respect to a merger.The survivingorganization is bound under section 45-19-02 by an act of a general partnerPage No. 8dissociated under this subsection, and the partner is liable under section 45-19-03<br>for transactions entered into by the surviving organization after the merger takes<br>effect.45-21-07. (907) Statement of merger.1.After a merger, the surviving organization may file a statement that one or more<br>partnerships or other constituent organizations have merged into the surviving<br>organization.2.A statement of merger must be accompanied by the plan of merger without<br>organizational records and must contain:a.The name of:(1)The partnership;(2)Each other constituent organization that is a party to the merger; and(3)The surviving organization into which the other constituent organizations<br>were merged;b.The form of organization that the surviving organization will be;c.The jurisdiction of the governing statute of the surviving organization; andd.The street address of the principal executive office of the surviving organization<br>and of an office in this state, if any.3.Except as otherwise provided in subsection 4, for the purposes of section 45-15-02,<br>property of the surviving organization which before the merger was held in the name<br>of another party to the merger is property held in the name of the surviving<br>organization upon filing a statement of merger.4.For the purposes of section 45-15-02, real property of the surviving organization<br>which before the merger was held in the name of another constituent organization is<br>property held in the name of the surviving organization upon recording a certified<br>copy of the statement of merger in the office for recording transfers of that real<br>property.5.A filed and, if appropriate, recorded statement of merger, signed and declared to be<br>accurate pursuant to subsection 3 of section 45-13-05, stating the name of a<br>constituent partnership that is a constituent organization in whose name property<br>was held before the merger and the name of the surviving organization, but not<br>containing all of the other information required by subsection 2, operates with<br>respect to the constituent partnership and the surviving organization to the extent<br>provided in subsections 3 and 4.45-21-07.1. Liability of general partner after conversion or merger.1.A conversion or merger under this chapter does not discharge any liability under<br>sections 45-15-06, 45-15-07, and 45-15-08 of a person that was a general partner in<br>or dissociated as a general partner from a converting or constituent partnership, but:a.The provisions of this chapter pertaining to the collection or discharge of the<br>liability continue to apply to the liability;b.For the purposes of applying those provisions, the converted or surviving<br>organization is deemed to be the converting or constituent partnership; andPage No. 9c.If a person is required to pay any amount under this subsection, then:(1)The person has a right of contribution from each other person that was<br>liable as a general partner under section 45-15-06 when the obligation<br>was incurred and has not been released from the obligation under<br>section 45-20-06; and(2)The contribution due from each of those persons is in proportion to the<br>right to receive distributions in the capacity of general partner in effect for<br>each of those persons when the obligations were incurred as provided in<br>section 45-20-07.2.In addition to any other liability provided by law:a.A person that immediately before a conversion or merger became effective was<br>a general partner in a converting or constituent partnership is personally liable<br>for each obligation of the converted or surviving organization arising from a<br>transaction with a third party after the conversion or merger becomes effective,<br>if, at the time the third party enters into the transaction, the third party:(1)Does not have notice of the conversion or merger; and(2)Reasonably believes that:(a)The converted or surviving organization or business is the<br>converting or constituent partnership; and(b)The person is a general partner in the converting or constituent<br>partnership; andb.A person that was dissociated as a general partner from a converting or<br>constituent partnership before the conversion or merger became effective is<br>personally liable for each obligation of the converted or surviving organization<br>arising from a transaction with a third party after the conversion or merger<br>becomes effective, if at the time the third party enters into the transaction less<br>than two years have passed since the person dissociated as a general partner<br>and the third party:(1)Does not have notice of the dissociation;(2)Does not have notice of the conversion or merger; and(3)Reasonably believes that:(a)The converted or surviving organization or business is the<br>converting or constituent partnership; and(b)The person is a general partner in the converting or constituent<br>partnership.45-21-08. (908) Nonexclusive. This chapter is not exclusive. Partnerships or limitedpartnerships may be converted or merged in any other manner provided by law.Page No. 10Document Outlinechapter 45-21 conversions and mergers]]>