Current as of: 2009 Chapter 156D: Section 9.55. Effect of entity conversion Section 9.55. EFFECT OF ENTITY CONVERSION [ Introductory paragraph of subsection (a) effective until January 5, 2009. For text effective January 5, 2009, see below.] (a) When a conversion under this subchapter in which the surviving entity is a domestic business corporation or domestic other entity becomes effective: [ Introductory paragraph of subsection (a) as amended by 2008, 451, Sec. 127 effective January 5, 2009. For text effective until January 5, 2009, see above.] (a) When a conversion under this subdivision in which the surviving entity is a domestic business corporation or domestic other entity becomes effective: (1) the title to all real and personal property, both tangible and intangible, of the converting entity remains in the surviving entity without reversion or impairment; (2) the liabilities of the converting entity remain the liabilities of the surviving entity; (3) an action or proceeding pending against the converting entity continues against the surviving entity as if the conversion had not occurred; (4) in the case of a surviving entity that is a filing entity, the articles of conversion, or the articles of organization or public organic document attached to the articles of conversion, constitute the articles of organization or public organic document of the surviving entity; (5) in the case of a surviving entity that is a nonfiling entity, the private organizational document provided for in the plan of conversion constitutes the private organizational document of the surviving entity; (6) the shares or interests of the converting entity are reclassified into shares, interests, other securities, obligations, rights to acquire shares, interests or other securities of the surviving entity or into cash or other property in accordance with the plan of conversion, and the shareholders or interest holders of the converting entity are entitled only to the rights provided in the plan of conversion or, in the case of a converting entity that is a domestic business corporation, to any rights they may have under PART 13; and (7) the surviving entity is considered to: (i) be a domestic business corporation or other entity for all purposes; (ii) be the same corporation or other entity without interruption as the converting entity that existed prior to the conversion; and (iii) have been incorporated or otherwise organized on the date that the converting entity was originally incorporated or organized. (b) When a conversion of a domestic business corporation to a foreign other entity becomes effective, the surviving entity is considered to: (1) appoint the secretary of state as its agent for service of process in a proceeding to enforce the rights of shareholders who exercise appraisal rights in connection with the conversion; and (2) agree that it will promptly pay the amount, if any, to which such shareholders are entitled under PART 13. (c) A shareholder who becomes subject to owner liability for some or all of the debts, obligations or liabilities of the surviving entity as a result of an entity conversion shall be personally liable only for those debts, obligations or liabilities of the surviving entity that arise after the effective time of the articles of entity conversion. (d) The owner liability of an interest holder in an other entity that converts to a domestic business corporation shall be as follows: (1) The conversion does not discharge any owner liability under the organic law of the other entity to the extent any such owner liability arose before the effective time of the articles of entity conversion. (2) The interest holder shall not have owner liability under the organic law of the other entity for any debt, obligation or liability of the corporation that arises after the effective time of the articles of entity conversion. (3) The provisions of the organic law of the other entity shall continue to apply to the collection or discharge of any owner liability preserved by paragraph (1), as if the conversion had not occurred and the surviving entity were still the converting entity. (4) The interest holder shall have whatever rights of contribution from other interest holders are provided by the organic law of the other entity with respect to any owner liability preserved by paragraph (1), as if the conversion had not occurred and the surviving entity were still the converting entity. Prev | Next________________________________________________________________________
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