Louisiana Revised Statutes 12:1-934 – Effect of nonprofit conversion
Terms Used In Louisiana Revised Statutes 12:1-934
- Appraisal: A determination of property value.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Personal property: All property that is not real property.
- Service of process: The service of writs or summonses to the appropriate party.
A. When a conversion of a domestic business corporation to a domestic nonprofit corporation becomes effective, all of the following shall apply:
(1) The title to all real and personal property, both tangible and intangible, of the corporation remains in the corporation without any transfer, assignment, reversion, or impairment.
(2) The liabilities of the corporation remain the liabilities of the corporation.
(3) An action or proceeding pending against the corporation continues against the corporation as if the conversion had not occurred.
(4) The articles of incorporation of the domestic or foreign nonprofit corporation become effective.
(5) The shares of the corporation are reclassified into memberships, securities, obligations, rights to acquire memberships or securities, or into cash or other property in accordance with the plan of conversion, and the shareholders are entitled only to the rights provided in the plan of nonprofit conversion or to any rights they may have under Part 13 of this Chapter.
(6) The corporation is deemed to be all of the following:
(a) A domestic nonprofit corporation for all purposes.
(b) The same corporation without interruption as the corporation that existed prior to the conversion.
(c) Incorporated on the date that it was originally incorporated as a domestic business corporation.
B. When a conversion of a domestic business corporation to a foreign nonprofit corporation becomes effective, the foreign nonprofit corporation remains both of the following:
(1) Obligated under the laws of this state to pay promptly the amount, if any, to which shareholders who exercise appraisal rights in connection with the conversion are entitled under Part 13 of this Chapter.
(2) Subject to the personal jurisdiction of the courts of this state in accordance with La. Rev. Stat. 13:3201, and to service of process in accordance with law.
C. [Reserved.]
D. A shareholder who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of the nonprofit corporation shall have owner liability only for those debts, obligations, or liabilities of the nonprofit corporation that arise after the effective time of the articles of nonprofit conversion.
Acts 2014, No. 328, §1, eff. Jan. 1, 2015.