§ 7-16-5.2 - Approval of conversion of a limited liability company.
SECTION 7-16-5.2
§ 7-16-5.2 Approval of conversion of alimited liability company. – (a) A domestic limited liability company may convert to a corporation, abusiness trust, or association, a real estate investment trust, a common lawtrust, a sole proprietorship or any other unincorporated business or entityincluding a partnership, (whether general or limited including a registeredlimited liability partnership), or a foreign limited liability company upon theauthorization of the conversion in accordance with this section.
(b) If the limited liability company agreement specified themanner of authorizing a conversion of the limited liability company, theconversion shall be authorized as specified in the limited liability companyagreement. If the limited liability company agreement does not specify themanner of authorizing a conversion of the limited liability company and doesnot prohibit a conversion of the limited liability company, the conversionshall be authorized in the same manner as is specified in the limited liabilitycompany agreement for authorizing a merger or consolidation that involves thelimited liability company as a constituent party to the merger orconsolidation. If the limited liability company agreement does not specify themanner of authorizing a conversion of the limited liability company or a mergeror consolidate that involves the limited liability company as a constituentparty and does not prohibit a conversion of the limited liability company, theconversion shall be authorized by the approval by the members or, if there ismore than one class or group of members, then by each class or group ofmembers, in either case, by members who own more than fifty percent (50%) ofthe then current percentage or other interest in the profits of the domesticlimited liability company owned by all of the members or by the members in eachclass or group, as appropriate.
(c) Unless otherwise agreed, the conversion of a domesticlimited liability company to another entity or business form pursuant to thissection shall not require such limited liability company to wind up its affairsunder § 7-16-45 or pay its liabilities and distribute its assets under§ 7-16-46, and the conversion shall not constitute a dissolution of suchlimited liability company. When a limited liability company has converted toanother entity or business form pursuant to this section, for all purposes ofthe laws of the state of Rhode Island, the other entity or business form shallbe deemed to be the same entity as the converting limited liability company andconversion shall constitute a continuation of the existence of the limitedliability company in the form of such other entity or business form.
(d) In connection with a conversion of a domestic limitedliability company to another entity or business form pursuant to this section,rights or securities of or interests in the domestic limited liability companywhich is to be converted may be exchanged for or converted into cash, property,rights or securities of or interests in the entity or business form into whichthe domestic limited liability company is being converted or, in addition to orin lieu thereof, may be exchanged for or converted into cash, property, rightsor securities of or interests in another entity or business form or may becancelled.
(e) If a limited liability company shall convert inaccordance with this section to another entity or business form organized,formed or created under the laws of a jurisdiction other than the state ofRhode Island, a certificate of conversion to non-Rhode Island entity shall befiled in the office of the secretary of state. The certificate of conversion tonon-Rhode Island entity shall state:
(1) The name of the limited liability company and, if it hasbeen changed, the name under which its certificate of formation was originallyfiled;
(2) The date of filing of its original certificate offormation with the secretary of state;
(3) The jurisdiction in which the entity or business form, towhich the limited liability company shall be converted, is organized, formed orcreated, and the name and type of such entity or business form;
(4) The future effective date or time (which shall be a dateor time certain) of the conversion if it is not to be effective upon the filingof the certificate of conversion to non-Rhode Island entity;
(5) That the conversion has been approved in accordance withthis section;
(6) The agreement of the limited liability company that itmay be served with process in the state of Rhode Island in any action, suit orproceeding for enforcement of any obligation to the limited liability companyarising while it was a limited liability company of the state of Rhode Island,and that it irrevocably appoints the secretary of state as its agent to acceptservice of process in any such action, suit or proceeding;
(f) Upon the filing in the office of the secretary of stateof the certificate of conversion to non-Rhode Island entity or upon the futureeffective date or time of the certificate of conversion to non-Rhode Islandentity and payment to the secretary of state of all fees prescribed in thischapter, the secretary of state shall certify that the limited liabilitycompany has filed all documents and paid all fees required by this chapter, andthereupon the limited liability company shall cease to exist as a limitedliability company of the state of Rhode Island. Such certificate of thesecretary of state shall be prima facie evidence of the conversion by suchlimited liability company out of the state of Rhode Island.
(g) The conversion of a limited liability company out of thestate of Rhode Island in accordance with this section and the resultingcessation of its existence as a limited liability company of the state of RhodeIsland pursuant to a certificate of conversion to non-Rhode Island entity shallnot be deemed to affect any obligations or liabilities of the limited liabilitycompany incurred prior to such conversion or the personal liability of anyperson incurred prior to such conversion, nor shall it be deemed to affect thechoice of laws applicable to the limited liability company with respect tomatters arising prior to such conversion.
(h) When a limited liability company has been converted toanother entity or business form pursuant to this section, the other entity orbusiness form shall, for all purposes of the laws of the state of Rhode Island,be deemed to be the same entity as the limited liability company. When anyconversion shall have become effective under this section, for all purposes ofthe laws of the state of Rhode Island, all of the rights, privileges and powersof the limited liability company that has converted, and all property, real,personal and mixed, and all such debts due to such limited liability company,as well as all other things and causes of action belonging to such limitedliability company, shall remain vested in the other entity or business form towhich such limited liability company has converted and shall be the property ofsuch other entity or business form, and the title to any real property vestedby deed or otherwise in such limited liability company shall not revert to suchlimited liability company or be in any way impaired by reason of this chapter;but all rights of creditors and all liens upon any property of such limitedliability company shall be preserved unimpaired, and all debts, liabilities andduties of the limited liability company that has converted shall remainattached to the other entity or business form to which such limited liabilitycompany has converted, and may be enforced against it to the same extent as ifsaid debts, liabilities and duties had originally been incurred or contractedby it in its capacity as such other entity or business form. The rights,privileges, powers and interests in property of the limited liability companythat has converted, as well as the debts, liabilities and duties of suchlimited liability company, shall not be deemed, as a consequence of theconversion, to have been transferred to the other entity or business form towhich such limited liability company has converted for any purpose of the lawsof the state of Rhode Island.