Texas Business Organizations Code 10.106 – General Effect of Conversion
Terms Used In Texas Business Organizations Code 10.106
- Appraisal: A determination of property value.
- Conversion: means :
(A) the continuance of a domestic entity as a non-code organization of any type;
(B) the continuance of a non-code organization as a domestic entity of any type;
(C) the continuance of a domestic entity of one type as a domestic entity of another type;
(D) the continuance of a domestic entity of one type as a foreign entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity; or
(E) the continuance of a foreign entity of one type as a domestic entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity. See Texas Business Organizations Code 1.002 - Converted entity: means an organization resulting from a conversion. See Texas Business Organizations Code 1.002
- Converting entity: means an organization as the organization existed before the organization's conversion. See Texas Business Organizations Code 1.002
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Domestic: means , with respect to an entity, that the entity is formed under this code or the entity's internal affairs are governed by this code. See Texas Business Organizations Code 1.002
- Domestic entity: means an organization formed under or the internal affairs of which are governed by this code. See Texas Business Organizations Code 1.002
- Entity: means a domestic entity or foreign entity. See Texas Business Organizations Code 1.002
- in writing: includes any representation of words, letters, or figures, whether by writing, printing, or other means. See Texas Government Code 312.011
- Law: means , unless the context requires otherwise, both statutory and common law. See Texas Business Organizations Code 1.002
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Member: means :
(A) in the case of a limited liability company, a person who has become, and has not ceased to be, a member in the limited liability company as provided by its governing documents or this code;
(B) in the case of a nonprofit corporation, a person who has membership rights in the nonprofit corporation under its governing documents;
(C) in the case of a cooperative association, a member of a nonshare or share association;
(D) in the case of a nonprofit association, a person who has membership rights in the nonprofit association under its governing documents; or
(E) in the case of a professional association, a person who has membership rights in the professional association under its governing documents. See Texas Business Organizations Code 1.002 - Non-code organization: means an organization other than a domestic entity. See Texas Business Organizations Code 1.002
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Plan of conversion: means a document that conforms with the requirements of § 10. See Texas Business Organizations Code 1.002
- Property: includes tangible and intangible property and an interest in that property. See Texas Business Organizations Code 1.002
- Secretary: means the:
(A) individual designated as secretary of an entity under the entity's governing documents; or
(B) officer or committee of persons authorized to perform the functions of secretary of an entity without regard to the designated name of the officer or committee. See Texas Business Organizations Code 1.002 - Service of process: The service of writs or summonses to the appropriate party.
When a conversion takes effect:
(1) the converting entity continues to exist without interruption in the organizational form of the converted entity rather than in the organizational form of the converting entity;
(2) all rights, title, and interests to all property owned by the converting entity continues to be owned, subject to any existing liens or other encumbrances on the property, by the converted entity in the new organizational form without:
(A) reversion or impairment;
(B) further act or deed; or
(C) any transfer or assignment having occurred;
(3) all liabilities and obligations of the converting entity continue to be liabilities and obligations of the converted entity in the new organizational form without impairment or diminution because of the conversion;
(4) the rights of creditors or other parties with respect to or against the previous owners or members of the converting entity in their capacities as owners or members in existence when the conversion takes effect continue to exist as to those liabilities and obligations and may be enforced by the creditors and obligees as if a conversion had not occurred;
(5) a proceeding pending by or against the converting entity or by or against any of the converting entity’s owners or members in their capacities as owners or members may be continued by or against the converted entity in the new organizational form and by or against the previous owners or members without a need for substituting a party;
(6) the ownership or membership interests of the converting entity that are to be converted into ownership or membership interests of the converted entity as provided in the plan of conversion are converted as provided by the plan, and if the converting entity is a domestic entity, the former owners or members of the domestic entity are entitled only to the rights provided in the plan of conversion or a right of dissent and appraisal under this code;
(7) if, after the conversion takes effect, an owner or member of the converted entity as an owner or member is liable for the liabilities or obligations of the converted entity, the owner or member is liable for the liabilities and obligations of the converting entity that existed before the conversion took effect only to the extent that the owner or member:
(A) agrees in writing to be liable for the liabilities or obligations;
(B) was liable, before the conversion took effect, for the liabilities or obligations; or
(C) by becoming an owner or member of the converted entity, becomes liable under other applicable law for the existing liabilities and obligations of the converted entity; and
(8) if the converted entity is a non-code organization, the converted entity is considered to have:
(A) appointed the secretary of state in this state as its agent for service of process in a proceeding to enforce any obligation or the rights of dissenting owners or members of the converting domestic entity; and
(B) agreed that the converted entity will promptly pay the dissenting owners or members of the converting domestic entity the amount, if any, to which they are entitled under this code.