(a) A subsidiary nonprofit corporation incorporated in this state may be converted to a domestic nonprofit LLC pursuant to this section.

Terms Used In Tennessee Code 48-101-808

  • articles of organization: means in the case of an LLC organized under chapters 201-248 of this title, articles of organization, articles of amendment, articles of correction, certificates of merger, and all similar documents required to be filed with any of the foregoing as part of the formation and continuation of an LLC. See Tennessee Code 48-202-101
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • board of directors: means the governing board of a corporation, whether denominated the board of directors or otherwise, except that no person or group of persons is the board of directors because of powers delegated to that person or group pursuant to §. See Tennessee Code 48-51-201
  • 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.
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Directors: means natural persons, designated in the charter or bylaws or elected or appointed by the incorporators, and their successors and natural persons elected or appointed to act as members of the board, irrespective of the names or titles by which such persons are described. See Tennessee Code 48-51-201
  • Dissolution: means that the LLC has incurred an event under §. See Tennessee Code 48-202-101
  • Entity: includes the following, whether foreign or domestic: LLCs. See Tennessee Code 48-202-101
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • LLC: means a limited liability company, whether foreign or domestic, that is formed under, that is subject to, or that has elected to be governed by, as applicable, the Tennessee Revised Limited Liability Company Act, compiled in chapter 249 of this title, except where expressly indicated otherwise. See Tennessee Code 48-101-802
  • Membership: means the rights and obligations a member has pursuant to a corporation's charter, bylaws and chapters 51-68 of this title. See Tennessee Code 48-51-201
  • Nonprofit corporation: means a nonprofit corporation, whether foreign or domestic, incorporated pursuant to or subject to chapters 51-68 of this title and exempt from franchise and excise tax as not-for-profit as defined in §. See Tennessee Code 48-101-802
  • Ownership interests: means membership interests in the case of an LLC, shares in the case of a corporation, partnership interests in the case of general or limited partnerships and the equivalent with respect to other entities. See Tennessee Code 48-202-101
  • Parent nonprofit corporation: means a nonprofit corporation that is the sole member of a nonprofit corporation. See Tennessee Code 48-101-802
  • Principal office: means the office (in or out of this state) so designated in the annual report where the principal executive offices of a domestic or foreign corporation are located. See Tennessee Code 48-11-201
  • Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Tennessee Code 48-202-101
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Secretary: means the corporate officer to whom the bylaws or the board of directors has delegated responsibility under §. See Tennessee Code 48-11-201
  • Secretary of state: means the person who holds the office of secretary of state of Tennessee. See Tennessee Code 48-202-101
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Subsidiary: means a corporation more than fifty percent (50%) of whose outstanding voting shares are owned by its parent and/or the parent's other wholly-owned subsidiaries. See Tennessee Code 48-11-201
  • Subsidiary nonprofit corporation: means a nonprofit corporation, the sole member of which is also a nonprofit corporation. See Tennessee Code 48-101-802
  • Termination: means the end of an LLC's existence as a legal entity and occurs when the articles of termination are filed with the secretary of state under §. See Tennessee Code 48-202-101
(b) The terms and conditions of a conversion of a subsidiary nonprofit corporation to a domestic nonprofit LLC must be approved by the board of directors of the subsidiary nonprofit corporation and the parent nonprofit corporation.
(c) After the conversion is approved under subsection (b), the converting subsidiary nonprofit corporation shall file with the secretary of state a certificate of conversion that satisfies the requirements of § 48-249-703 and articles of organization that satisfy the requirements of § 48-101-804. The certificate of conversion shall prominently designate the LLC as a nonprofit LLC and shall also include:

(1) A statement that the converting subsidiary nonprofit corporation is being converted to a nonprofit LLC;
(2) The name of the converting subsidiary nonprofit corporation and the address of its principal office; and
(3) A statement that the terms and conditions of the conversion have been approved by the board of directors of the converting subsidiary nonprofit corporation and the parent nonprofit corporation.
(d) The conversion is effective when the certificate of conversion is filed with the secretary of state or at any future effective date or time specified in the certificate of conversion. The filing of a certificate of conversion with the secretary of state, in compliance with this section, shall constitute and, for purposes of chapter 64 of this title, be deemed to be articles of termination of corporate existence of the subsidiary nonprofit corporation.
(e) When any conversion of a subsidiary nonprofit corporation to a domestic nonprofit LLC has become effective under this section, for all purposes of the laws of this state:

(1) The domestic nonprofit LLC shall be deemed to be the same entity as the converting subsidiary nonprofit corporation;
(2) All of the rights, privileges and powers of the converting subsidiary nonprofit corporation, and all property, real, personal and mixed, of and all debts due to the converting subsidiary nonprofit corporation, as well as all other things and causes of action belonging to the converting subsidiary nonprofit corporation, shall be and remain vested in the domestic nonprofit LLC and shall be the property of the domestic nonprofit LLC;
(3) Title to any real property vested by deed or otherwise in the converting nonprofit subsidiary corporation 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 subsidiary nonprofit corporation shall be preserved unimpaired;
(5) All debts, liabilities, and obligations of the converting subsidiary nonprofit corporation shall remain attached to the domestic nonprofit 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 nonprofit LLC;
(6) Any action or proceeding pending against the converting subsidiary nonprofit corporation may be continued against the domestic nonprofit LLC as if the conversion had not occurred; and
(7) The rights, privileges, powers and interests in property of the converting subsidiary nonprofit corporation, as well as the debts, liabilities, and obligations of the converting subsidiary nonprofit corporation, shall not be deemed, as a consequence of the conversion, to have been transferred to the domestic nonprofit LLC for any purpose of the laws of this state.
(f) The converting subsidiary nonprofit corporation shall not be required to wind up its affairs or to pay its liabilities and distribute its assets, and the conversion of the converting subsidiary nonprofit corporation to the domestic nonprofit LLC shall not be deemed to constitute a dissolution of the converting subsidiary nonprofit corporation.
(g) The ownership interests or membership of the parent nonprofit corporation in the converting subsidiary nonprofit corporation shall become membership interests in the domestic nonprofit LLC.
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