Virginia Code 13.1-1086: Effect of entity conversion
A. When an entity conversion under this article becomes effective, with respect to that entity:
Terms Used In Virginia Code 13.1-1086
- Articles of organization: means all documents constituting, at any particular time, the articles of organization of a limited liability company. See Virginia Code 13.1-1002
- Converting entity: means the domestic limited liability company, partnership, or limited partnership that adopts a plan of entity conversion pursuant to this article. See Virginia Code 13.1-1081
- 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.
- domestic limited liability company: means an entity that is an unincorporated organization organized and existing under this chapter, or that has become a domestic limited liability company of the Commonwealth pursuant to § 13. See Virginia Code 13.1-1002
- Eligible interests: means , as to a partnership, partnership interest as specified in § 50-73. See Virginia Code 13.1-1002
- Entity: includes any domestic or foreign limited liability company, any domestic or foreign other business entity, any estate or trust, and any state, the United States, and any foreign government. See Virginia Code 13.1-1002
- Entity conversion: means conversion. See Virginia Code 13.1-1002
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Member: means a person that has been admitted to membership in a limited liability company as provided in § 13. See Virginia Code 13.1-1002
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Property: means all property, whether real, personal, or mixed or tangible or intangible, or any right or interest therein. See Virginia Code 13.1-1002
- real estate: includes lands, tenements and hereditaments, and all rights and appurtenances thereto and interests therein, other than a chattel interest. See Virginia Code 1-219
- Resulting entity: means the domestic stock corporation, business trust, or limited liability company that is in existence upon consummation of an entity conversion pursuant to this article. See Virginia Code 13.1-1081
1. The title to all real estate and other property remains in the resulting entity without reversion or impairment;
2. The liabilities of the converting entity remain the liabilities of the resulting entity; and
3. A proceeding pending may be continued by or against the resulting entity as if the conversion did not occur.
B. When the resulting entity is a domestic stock corporation or business trust:
1. The articles of incorporation or articles of trust attached to the articles of entity conversion constitute the articles of incorporation or articles of trust of the resulting entity;
2. The interests of the converting entity are reclassified into shares or beneficial interests of the resulting entity in accordance with the plan of entity conversion; and the members of the converting entity are entitled only to the rights provided in the plan of entity conversion;
3. The resulting entity is deemed to:
a. Be a domestic stock corporation or business trust, as the case may be, for all purposes;
b. Be the same stock corporation or business trust without interruption as the converting entity that existed before the conversion; and
c. Have been incorporated or formed on the date that the converting entity was originally incorporated, organized, or formed;
4. The converting entity shall cease to be a limited liability company when the certificate of entity conversion becomes effective; and
5. Any member of a converting entity who, before the conversion, was liable for the liabilities or obligations of the converting entity is not released from those liabilities or obligations by reason of the conversion.
C. When the converting entity is a partnership or a limited partnership:
1. The articles of organization attached to the articles of entity conversion constitute the articles of organization of the resulting entity;
2. The eligible interests of the converting entity are reclassified into membership interests in accordance with the plan of entity conversion; and the partners of the converting entity are entitled only to the rights provided in the plan of entity conversion;
3. The resulting entity is deemed to:
a. Be a domestic limited liability company for all purposes;
b. Be the same limited liability company without interruption as the converting entity that existed before the conversion; and
c. Have been organized on the date that the converting entity was originally formed, organized, or incorporated;
4. The converting entity shall cease to be a partnership or limited partnership when the certificate of entity conversion becomes effective;
5. If the converting entity is a partnership, a statement of partnership authority filed by the partnership that has not been canceled shall be deemed canceled when the certificate of entity conversion becomes effective;
6. If the converting entity is a limited partnership, its certificate of limited partnership shall be deemed canceled when the certificate of entity conversion becomes effective;
7. If the partnership or limited partnership is registered as a registered limited liability partnership, that status shall be deemed canceled when the certificate of entity conversion becomes effective; and
8. Any partner of a converting entity who, before the conversion, was liable for the liabilities or obligations of the converting entity is not released from those liabilities or obligations by reason of the conversion.
2016, c. 288.