48-249-703 - Conversion to LLC.
48-249-703. Conversion to LLC.
(a) General. Any other entity may convert to a domestic LLC, by complying with this section and by filing with the secretary of state:
(1) A certificate of conversion to a domestic LLC; and
(2) Articles of organization that comply with § 48-249-202.
(b) Contents of certificate of conversion. The certificate of conversion to a domestic LLC shall state the following:
(1) The jurisdiction, date of formation and type of entity of the converting other entity immediately prior to its conversion to a domestic LLC;
(2) The name of the converting other entity immediately prior to the filing of the certificate of conversion to a domestic LLC;
(3) The name of the domestic LLC, as set forth in its articles of organization filed in accordance with subsection (a);
(4) That all required approvals of the conversion have been obtained by the converting other entity; and
(5) The future effective date or time of the conversion to a domestic LLC, if it is not to be effective upon the filing of the certificate of conversion to a domestic LLC and the articles of organization.
(c) Status of converted entity. Upon the filing of the certificate of conversion to a domestic LLC and the articles of organization of the domestic LLC with the secretary of state, or upon the future effective date or time of the certificate of conversion to a domestic LLC and the articles of organization of the domestic LLC, the other entity shall be converted into a domestic LLC, and the domestic LLC shall thereafter be subject to all of the provisions of this chapter, except that, notwithstanding § 48-249-201, the existence of the domestic LLC shall be deemed to have commenced on the date the other entity commenced its existence in the jurisdiction in which the other entity was first formed.
(d) Result of conversion. The conversion of any other entity into a domestic LLC shall not be deemed to affect any debts, liabilities, and obligations of the other entity incurred prior to its conversion to a domestic LLC, or the personal liability of any person incurred prior to the conversion.
(e) Effects of conversion. When any conversion of another entity to a domestic LLC has become effective under this section, for all purposes of the laws of this state:
(1) The domestic LLC shall be deemed to be the same entity as the converting other entity;
(2) All of the rights, privileges and powers of the converting other entity and all property, real, personal and mixed, of, and all debts due to, the converting other entity, as well as all other things and causes of action belonging to the converting other entity, shall be and remain vested in the domestic LLC and shall be the property of the domestic LLC;
(3) The title to any real property vested by deed, or otherwise, in the converting other entity shall not revert, or be in any way impaired, by reason of this section;
(4) All rights of creditors, and all liens upon any property of the converting other entity, shall be preserved unimpaired;
(5) All debts, liabilities and obligations of the converting other entity shall remain attached to the domestic LLC, and may be enforced against it to the same extent as if the debts, liabilities and obligations had originally been incurred or contracted by it in its capacity as a domestic LLC;
(6) Any proceeding pending against the converting other entity may be continued against the domestic LLC as if the conversion had not occurred; and
(7) The rights, privileges, powers and interests in property of the converting other entity, as well as the debts, liabilities and obligations of the converting other entity, shall not be deemed, as a consequence of the conversion, to have been transferred to the domestic LLC for any purpose of the laws of this state.
(f) No dissolution or winding up. The converting other entity shall not be required to wind up its affairs or to pay its liabilities and distribute its assets. The conversion shall not be deemed to constitute a dissolution of the converting other entity, and shall constitute a continuation of the existence of the converting other entity in the form of a domestic LLC.
(g) Compliance with other applicable law. If the converting other entity is a foreign entity, the conversion shall be permitted under the laws of the jurisdiction of the converting other entity, and the converting other entity shall comply with such laws. If the converting other entity is a domestic entity, the conversion shall be permitted under the other laws of this state that apply to the domestic entity, and the domestic entity shall comply with such laws. Notwithstanding the absence of any express provision in the Revised Uniform Partnership Act, compiled in title 61, chapter 1, or the Revised Uniform Limited Partnership Act, compiled in title 61, chapter 2, permitting or authorizing a partnership formed pursuant to the Revised Uniform Partnership Act or a limited partnership formed pursuant to the Revised Uniform Limited Partnership Act to convert to an LLC, each of a partnership formed pursuant to the Revised Uniform Partnership Act and a limited partnership formed pursuant to the Revised Uniform Limited Partnership Act is authorized to convert to an LLC upon the approval by all of the partners of the partnership or limited partnership, as applicable, or by the number or percentage of partners specified for conversion in the partnership agreement of the partnership or the limited partnership agreement of the limited partnership, as applicable.
(h) Approval Prior to filing a certificate of conversion of another entity to a domestic LLC with the secretary of state:
(1) The conversion shall be approved in the manner provided by any document, instrument, agreement or other writing governing the internal affairs of the converting other entity and the conduct of its business, as appropriate, and if:
(A) The converting other entity is a partnership formed pursuant to the Revised Uniform Partnership Act, compiled in title 61, chapter 1, or a limited partnership formed pursuant to the Revised Uniform Limited Partnership Act, compiled in title 61, chapter 2, in the manner provided for in subsection (g); or
(B) The converting other entity is other than a partnership formed pursuant to the Revised Uniform Partnership Act, compiled in title 61, chapter 1, or a limited partnership formed pursuant to the Revised Uniform Limited Partnership Act, compiled in title 61, chapter 2, in the manner provided by applicable laws of the jurisdiction of the converting other entity; and
(2) The articles of organization and operating agreement, as applicable, for the domestic LLC, shall be approved by the same authorization required for the converting other entity to approve the conversion.
(i) Exchange or conversion of interests. In connection with a conversion of another entity to a domestic LLC under this section, rights or securities of or interests in the converting other entity may be exchanged for or converted into cash, property or rights or securities of or interests in the domestic LLC, or, in addition to or in lieu of such exchange or conversion, may be exchanged for or converted into cash, property or rights or securities of or interests in another domestic LLC or other entity, or may be cancelled.
(j) Nonexclusivity. This section is nonexclusive. Any other entity may be converted to a domestic LLC in any other manner provided by law.
[Acts 2005, ch. 286, § 1; 2006, ch. 620, §§ 40-42.]