Chapter
094
2007 -- H 6249
Enacted 06/27/07
A N A C T
RELATING
TO CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS -- CONVERSIONS
Introduced
By: Representatives Mattiello, DeSimone, Brien, Giannini, and Ucci
Date
Introduced: April 04, 2007
It is enacted by the General Assembly as
follows:
SECTION 1. Section
7-1.2-106 of the General Laws in Chapter 7-1.2 entitled "Rhode
Island Business Corporation Act" is hereby
amended to read as follows:
7-1.2-106.
Definitions. -- As used in this chapter:
(1)
"Articles of incorporation" means the original or restated articles
of incorporation and
all of their amendments including agreements of
merger.
(2)
"Authorized shares" means the shares of all classes which the
corporation is
authorized to issue.
(3)
"Corporation" or "domestic corporation" means a corporation
for profit subject to the
provisions of this chapter, except a foreign
corporation.
(4)
"Electronic transmission" means any form of communication, not directly
involving
the physical transmission of paper, that creates
a record that may be retained, retrieved, and
reviewed by a recipient thereof, and that may be
directly reproduced in paper form by such a
recipient through an automated process.
(5) "Employee"
includes officers but not directors. A director may accept duties which
also make him or her an employee.
(6) "Foreign
corporation" means a corporation for profit organized under laws other
than
the laws of this state for a purpose or purposes
for which a corporation may be organized under
this chapter.
(7)
"Individual" means a natural person.
(8)
"Insolvent" means the inability of a corporation to pay its debts as
they become due
in the usual course of its business.
(9)
"Person" means an individual or an entity. An entity includes
domestic and foreign
business corporation, domestic and foreign
nonprofit corporation; estate; trust; domestic and
foreign unincorporated entity; and a state, the
United States and a foreign government.
(10)
"Shares" means the units into which the proprietary interests in a
corporation are
divided.
(11)
"Subscriber" means one who subscribes for shares in a corporation,
whether before
or after incorporation.
(12)
"Shareholder" means one who is a holder of record of shares in a
corporation.
(13)
"State" means the state of Rhode Island and Providence Plantations.
(13) (14)
The singular shall be construed to include the plural, the plural the singular,
and the masculine the feminine, when consistent
with the intent of this chapter.
SECTION 2. Chapter
7-1.2 of the General Laws entitled "Rhode Island Business
Corporation Act" is hereby amended by
adding thereto the following sections:
7-1.2-1007.
Conversion of other entities to a domestic corporation. – (a) As
used in
this section, the term "other entity"
means a limited liability company, business trust or
association, real estate investment trust,
common-law trust, or any other unincorporated business
or entity including a partnership (whether
general or limited, including a registered limited
liability partnership) or a foreign corporation.
(b) Any other
entity may convert to a corporation of this state by complying with
subsection (h) of this section and filing in the
office of the secretary of state:
(1) A
certificate of conversion to corporation that has been executed in accordance
with
subsection (i) of this section and filed in
accordance with section 7-1.2-105; and
(2) Articles of
incorporation that have been executed, acknowledged and filed in
accordance with section 7-1.2-105.
(c) The
certificate of conversion to corporation shall state:
(1) The date on
which and jurisdiction where the other entity was first created,
incorporated, formed or otherwise came into
being and, if it has changed, its jurisdiction
immediately prior to its conversion to a
domestic corporation;
(2) The name
and type of the other entity immediately prior to the filing of the certificate
of conversion to corporation; and
(3) The name of
the corporation as set forth in its articles of incorporation filed in
accordance with subsection (b) of this section.
(d) Upon the
effective time of the certificate of conversion to corporation and the articles
of incorporation, the other entity shall be
converted to a corporation of this state and the
corporation shall thereafter be subject to all
of the provisions of this title, except that
notwithstanding subsection 7-1.2-105(d) the
existence of the corporation shall be deemed to have
commenced on the date the other entity commenced
its existence in the jurisdiction in which the
other entity was first created, formed,
incorporated or otherwise came into being.
(e) The
conversion of any other entity to a corporation of this state shall not be
deemed
to affect any obligations or liabilities of the
other entity incurred prior to its conversion to a
corporation of this state or the personal
liability of any person incurred prior to such conversion.
(f) When an
other entity has been converted to a corporation of this state pursuant to this
section, the corporation of this state shall,
for all purposes of the laws of the state of Rhode
Island, be deemed to be the same entity as the
converting other entity. When any conversion shall
have become effective under this section, for
all purposes of the laws of the state of Rhode Island,
all of the rights, privileges and powers of the
other entity that has converted, and all property,
real, personal and mixed, and all debts due to
such other entity, as well as all other things and
causes of action belonging to such other entity,
shall remain vested in the domestic corporation to
which such other entity has converted and shall
be the property of such domestic corporation and
that title to any real property vested by deed
or otherwise in such other entity shall not revert to
such other entity or be in any way impaired by
reason of this chapter: but all rights of creditors
and all liens upon any property of such other
entity shall be preserved unimpaired, and all debts,
liabilities and duties of the other entity that
has converted shall remain attached to the corporation
of this state to which such other entity has
converted, and may be enforced against it to the same
extent as if said debts, liabilities and duties
had originally been incurred or contracted by it in its
capacity as a corporation of this state. The
rights, privileges, powers and interests in property of
the other entity, as well as the debts,
liabilities and duties of the other entity, shall not be deemed,
as a consequence of the conversion, to have been
transferred to the domestic corporation to which
such other entity has converted for any purpose
of the laws of the state of Rhode Island.
(g) Unless
otherwise agreed for all purposes of the laws of the state of Rhode Island or
as
required under applicable non-Rhode Island law,
the converting other entity shall not be required
to wind up its affairs or pay its liabilities
and distribute its assets, and the conversion shall not be
deemed to constitute a dissolution of such other
entity and shall constitute a continuation of the
existence of the converting other entity in the
form of a corporation of this state.
(h) Prior to
filing a certificate of conversion to corporation with the office of the
secretary
of state, the conversion shall be approved in
the manner provided for by the document,
instrument, agreement or other writing, as the
case may be, governing the internal affairs of the
other entity and the conduct of its business or
by applicable law, as appropriate, and articles of
incorporation shall be approved by the same
authorization required to approve the conversion.
(i) The
certificate of conversion to corporation shall be signed by any person who is
authorized to sign the certificate of conversion
to corporation on behalf of the other entity.
(j) In
connection with a conversion hereunder, rights or securities of, or interests
in, the
other entity which is to be converted to a
corporation of this state may be exchanged for or
converted into cash, property, or shares of stock,
rights or securities of such corporation of this
state or, in addition to or in lieu thereof, may
be exchanged for or converted into cash, property,
or shares of stock, rights or securities of or
interests in another domestic corporation or other
entity or may be cancelled.
7-1.2-1008.
Conversion of a domestic corporation to other entities. – (a) A
corporation of this state may, upon the
authorization of such conversion in accordance with this
section, convert to a limited liability company,
business trust or association, real estate investment
trust, common-law trust or any other
unincorporated business or entity including a partnership
(whether general or limited, including a
registered limited liability partnership) or a foreign
corporation.
(b) The board
of directors of the corporation which desires to convert under this section
shall adopt a resolution approving such
conversion, specifying the type of entity into which the
corporation shall be converted and recommending
the approval of such conversion by the
stockholders of the corporation. Such resolution
shall be submitted to the stockholders of the
corporation at an annual or special meeting. Due
notice of the time, and purpose of the meeting
shall be mailed to each holder of stock, whether
voting or nonvoting, of the corporation at the
address of the stockholder as it appears on the
records of the corporation, at least twenty (20) days
prior to the date of the meeting. At the
meeting, the resolution shall be considered and a vote
taken for its adoption or rejection. If all
outstanding shares of stock of the corporation, whether
voting or nonvoting, shall be voted for the
adoption of the resolution, the conversion shall be
authorized.
(c) If a
corporation shall convert in accordance with this section to another entity
organized, formed or created under the laws of a
jurisdiction other than the state of Rhode Island,
the corporation shall file with the secretary of
state a certificate of conversion executed in
accordance with section 7-1.2-105 which
certifies:
(1) The name of
the corporation, and if it has been changed, the name under which it was
originally incorporated;
(2) The date of
filing of its original articles of incorporation with the secretary of state;
(3) The name
and jurisdiction of the entity and type of entity to which the corporation
shall be converted;
(4) That the
conversion has been approved in accordance with the provisions of this
section;
(5) The
agreement of the corporation that it may be served with process in the state of
Rhode Island in any action, suit or proceeding
for enforcement of any obligation of the
corporation arising while it was a corporation of
this state, and that it irrevocably appoints the
secretary of state as its agent to accept
service of process in any such action, suit or proceeding;
and
(6) The address
to which a copy of the process referred to in subsection (c)(5) of this
section shall be mailed to it by the secretary
of state. In the event of such service upon the
secretary of state in accordance with subsection
(c)(5) of this section, the secretary of state shall
forthwith notify such corporation that has converted
out of the state of Rhode Island by letter,
certified mail, return receipt requested,
directed to such corporation that has converted out of the
state of Rhode Island at the address so
specified, unless such corporation shall have designated in
writing to the secretary of state a different
address for such purpose, in which case it shall be
mailed to the last address designated. Such
letter shall enclose a copy of the process and any other
papers served on the secretary of state pursuant
to this subsection. It shall be the duty of the
plaintiff in the event of such service to serve
process and any other papers in duplicate, to notify
the secretary of state that service is being
affected pursuant to this subsection and to pay the
secretary of state the sum of fifteen dollars
($15.00) for the use of the state, which sum shall be
taxed as part of the costs in the proceeding, if
the plaintiff shall prevail therein. The secretary of
state shall maintain an alphabetical record of
any such service setting forth the name of the
plaintiff and the defendant, the title, docket
number and nature of the proceeding in which process
has been served, the fact that service has been
effected pursuant to this subsection, the return date
thereof, and the day and hour service was made.
The secretary of state shall not be required to
retain such information longer than five (5)
years from receipt of the service of process.
(d) Upon the filing in the office of the secretary of state of a certificate
of conversion to
non-Rhode
Island entity in accordance with subsection (c) of this section or upon the
future
effective
date or time of the certificate of conversion to non-Rhode Island entity and
payment to
the
secretary of state of all fees prescribed under this title, the secretary of
state shall certify that
the
corporation has filed all documents and paid all fees required by this title,
and thereupon the
corporation
shall cease to exist as a corporation of this state at the time the certificate
of
conversion
becomes effective in accordance with section 7-1.2-105. Such certificate of the
secretary
of state shall be prima facie evidence of the conversion by such corporation
out of the
state
of Rhode Island.
(e) The conversion of a corporation out of the state of Rhode Island in
accordance with
this
section and the resulting cessation of its existence as a corporation of this
state pursuant to a
certificate
of conversion to non-Rhode Island entity shall not be deemed to affect any
obligations
or
liabilities of the corporation incurred prior to such conversion or the
personal liability of any
person
incurred prior to such conversion, nor shall it be deemed to affect the choice
of law
applicable
to the corporation with respect to matters arising prior to such conversion.
(f) Unless otherwise provided in a resolution of conversion adopted in
accordance with
this
section, the converting corporation shall not be required to wind up its
affairs or pay its
liabilities
and distribute its assets, and the conversion shall not constitute a
dissolution of such
corporation.
(g) In connection with a conversion of a domestic corporation to another
entity pursuant
to
this section, shares of stock, of the corporation of this state which is to be
converted may be
exchanged
for or converted into cash, property, rights or securities of, or interests in,
the entity to
which
the corporation of this state is being converted or, in addition to or in lieu
thereof, may be
exchanged
for or converted into cash, property, shares of stock, rights or securities of,
or interests
in,
another domestic corporation or other entity or may be cancelled.
(h) When a corporation has been converted to another entity or business form
pursuant to
this
section, the other entity or business form shall, for all purposes of the laws
of the state of
Rhode
Island, be deemed to be the same entity as the corporation. When any conversion
shall
have
become effective under this section, for all purposes of the laws of the state
of Rhode Island,
all
of the rights, privileges and powers of the corporation that has converted, and
all property,
real,
personal and mixed, and all debts due to such corporation, as well as all other
things and
causes
of action belonging to such corporation, shall remain vested in the other
entity or business
form
to which such corporation has converted and shall be the property of such other
entity or
business
form, and the title to any real property vested by deed or otherwise in such
corporation
shall
not revert to such corporation or be in any way impaired by reason of this
chapter; but all
rights
of creditors and all liens upon any property of such corporation shall be
preserved
unimpaired,
and all debts, liabilities and duties of the corporation that has converted
shall remain
attached
to the other entity or business form to which such corporation has converted,
and may be
enforced
against it to the same extent as if said debts, liabilities and duties had
originally been
incurred
or contracted by it in its capacity as such other entity or business form. The
rights,
privileges,
powers and interest in property of the corporation that has converted, as well
as the
debts,
liabilities and duties of such corporation, shall not be deemed, as a
consequence of the
conversion,
to have been transferred to the other entity or business form to which such
corporation
has converted for any purposes of the laws of the state of Rhode Island.
(i)
No vote of stockholders of a corporation shall be necessary to authorize a
conversion if no
shares
of the stock of such corporation shall have been issued prior to the adopting
by the board
of
directors of the resolution approving the conversion.
SECTION 3.
Sections 7-13-8.1 and 7-13-8.2 of the General Laws in Chapter 7-13
entitled "Limited Partnerships" are
hereby amended to read as follows:
7-13-8.1.
Conversion of certain entities to a limited partnership. -- (a) As used
in this
section, the term "other entity" means
a corporation, business trust or association, a real estate
investment trust, a common-law trust, or any
other unincorporated business, excluding or entity
including a limited liability company or a
partnership, whether general or limited (including a
registered limited liability partnership).
(b) Any other
entity may convert to a domestic limited partnership company by
complying with subsection (h) of this section
and filing in the office of the secretary of state in
accordance with section 7-13-13:
(1) A certificate
of conversion to limited partnership that has been executed by one or
more authorized persons by one or more
authorized persons in accordance with section 7-13-11;
and
(2) A certificate
of limited partnership that complies with section 7-13-8 and has been
executed by one or more authorized persons
in accordance with section 7-13-11.
(c) The certificate
of conversion to a limited partnership shall state:
(1) The date on
which and jurisdiction where the other entity was first created, formed,
or otherwise came into being and, if it has
changed, its jurisdiction immediately prior to its
conversion to a domestic limited partnership;
(2) The name and
type of the other entity immediately prior to the filing of the certificate
of conversion to limited partnership;
(3) The name of
the limited partnership as set forth in its certificate of limited
partnership filed in accordance with subsection
(b) of this section; and
(4) The future
effective date or time (which shall be a date or time certain) of the
conversion to a limited partnership if it is not
to be effective upon the filing of the certificate of
conversion to limited partnership and the
certificate of limited partnership.
(d) Upon the
filing in the office of the secretary of state of the certificate of conversion
to
limited partnership and the certificate of formation
or upon the future effective date or time of the
certificate of conversion to limited partnership
and the certificate of limited partnership, the other
entity shall be converted into a domestic
limited partnership and the limited partnership shall
thereafter be subject to all of the provisions
of this chapter, except that, notwithstanding section
7-13-8, the existence of the limited partnership
shall be deemed to have commenced on the date
the other entity commenced its existence in the
jurisdiction in which the other entity was first
created, formed, or otherwise came into being.
(e) The
conversion of any other entity into a domestic limited partnership shall not be
deemed to affect any obligations or liabilities
of the other entity incurred prior to its conversion to
a domestic limited partnership or the personal
liability of any person incurred prior to the
conversion.
(f) When any
conversion becomes effective under this section, for all purposes of the
laws of the state of Rhode Island, all of the
rights, privileges, and powers of the other entity that
has converted, and all property, real, personal,
and mixed, and all debts due to the other entity, as
well as all other things and causes of action belonging
to the other entity, are vested in the
domestic limited partnership and are thereafter
the property of the domestic limited partnership as
they were of the other entity that has
converted, and the title to any real property vested by deed
or otherwise in the other entity shall not
revert to such other entity or be in any way impaired by
reason of this chapter, but all rights of
creditors and all liens upon any property of the other entity
shall be preserved unimpaired, and all debts,
liabilities, and duties of the other entity that has
converted are attached to the domestic limited
partnership and may be enforced against it to the
same extent as if those debts, liabilities, and
duties were incurred or contracted by it.
(g) Unless otherwise
agreed, or as required under applicable non-Rhode Island law, the
converting other entity is not required to wind
up its affairs or pay its liabilities and distribute its
assets, and the conversion shall not be deemed
to constitute a dissolution of the other entity and
constitutes a continuation of the existence of
the converting other entity in the form of a domestic
limited partnership.
(h) Prior to
filing a certificate of conversion to limited partnership with the office of
the
secretary of state, the conversion shall be
approved in the manner provided for by the document,
instrument, agreement, or other writing, as the
case may be, governing the internal affairs of the
other entity and the conduct of its business or
by applicable law, as appropriate, and a partnership
agreement shall be approved by the same
authorization required to approve the conversion.
(i) The
provisions of this section shall not be construed to limit the accomplishment
of a
change in the law governing, or the domicile of,
another entity to the state of Rhode Island by any
other means provided for in a partnership
agreement or other agreement or as otherwise permitted
by law, including by the amendment of a
partnership agreement or other agreement.
7-13-8.2.
Approval of conversion of a limited partnership. -- A domestic limited
partnership may convert to a corporation, a business
trust or association, a real estate investment
trust, a common-law trust, or any other unincorporated
business or entity including a general
partnership, whether general or limited
(including a registered limited liability partnership) or a
limited liability company, organized, formed, or
created under the laws of the state of Rhode
Island, upon the authorization of that
conversion in accordance with this section. If the
partnership agreement specified the manner of
authorizing a conversion of the limited
partnership, the conversion shall be authorized as
specified in the partnership agreement. If the
partnership agreement does not specify the
manner of authorizing a conversion of the limited
partnership and does not prohibit a conversion
of the limited partnership, the conversion shall be
authorized in the same manner as is specified in
the partnership agreement for authorizing a
merger or consolidation that involves the
limited partnership as a constituent party to the merger
or consolidation. If the partnership agreement
does not specify the manner of authorizing a
conversion of the limited partnership or a
merger or consolidation that involved the limited
partnership as a constituent party and does not
prohibit a conversion of the limited partnership,
the conversion shall be authorized by the approval
(1) by all general partners, and (2) by the
limited partners or, if there is more than one
class or group of limited partners, then by each class
or group of limited partners, in either case, by
limited partners who own more than fifty percent
(50%) of the then current percentage or other
interest in the profits of the domestic limited
partnership owned by all of the limited partners
or by the limited partners in each class or group,
as appropriate.
SECTION 4.
Sections 7-16-5.1 and 7-16-5.2 of the General Laws in Chapter 7-16
entitled "The Rhode Island Limited
Liability Company Act" are hereby amended to read as
follows:
7-16-5.1.
Conversion of certain entities to a limited liability company. -- (a)
As used
in this section, the term "other
entity" means a corporation, a business trust, or association, a
real
estate investment trust, a common-law trust, a
sole proprietorship or any other unincorporated
business, excluding or entity
including a partnership, (whether general or limited),
(including a
registered limited liability partnership) or a foreign limited
liability company.
(b) Any other
entity may convert to a domestic limited liability company by complying
with subsection (h) of this section and filing
in the office of the secretary of state in accordance
with section 7-16-8 articles of organization
that comply with section 7-16-6 and have been
executed by one or more authorized persons in
accordance with section 7-16-7, accompanied by a
certificate of conversion to a limited liability
company duly executed by one or more persons
authorized to act on behalf of the other entity
and one or more persons authorized to sign a
certificate of conversion on behalf of the
limited liability company.
(c) The
certificate of conversion to limited liability company shall state:
(1) The date on
which and jurisdiction where the other entity was first created, formed,
or otherwise came into being and, if it has
changed, its jurisdiction immediately prior to its
conversion to a domestic limited liability
company;
(2) The name of
the other entity immediately prior to the filing of the certificate of
conversion to limited liability company;
(3) The name of
the limited liability company as set forth in its articles of organization
filed in accordance with subsection (b) of this
section; and
(4) The future
effective date or time (which is a date or time certain) of the conversion to
a limited liability company if it is not to be
effective upon the filing of the certificate of
conversion to limited liability company and the
articles of organization.
(d) Upon the
filing in the office of the secretary of state of the certificate of conversion
to
limited liability company and the articles of
organization or upon the future effective date or time
of the certificate of conversion to a limited
liability company and the articles of organization, the
other entity shall be converted into a domestic
limited liability company and the limited liability
company shall thereafter be subject to all of
the provisions of this chapter, except that,
notwithstanding section 7-16-5, the existence of
the limited liability company shall be deemed to
have commenced on the date the other entity
commenced its existence in the jurisdiction in which
the other entity was first created, formed, or
otherwise came into being.
(e) The
conversion of any other entity into a domestic limited liability company shall
not
be deemed to affect any obligations or
liabilities of the other entity incurred prior to its
conversion to a domestic limited liability
company or the personal liability of any person incurred
prior to the conversion.
(f) When any
conversion shall have become effective under this section, for all purposes
of the laws of the state of Rhode Island, all of
the rights, privileges, and powers of the other entity
that has converted, and all property, real,
personal, and mixed, and all debts due to such other
entity, as well as all other things and causes
of action belonging to the other entity, shall be vested
in the domestic limited liability company and
shall thereafter be the property of the domestic
limited liability company as they were of the
other entity that has converted, and the title to any
real property vested by deed or otherwise in the
other entity shall not revert or be in any way
impaired by reason of this chapter, but all
rights of creditors and all liens upon any property of
such other entity shall be preserved unimpaired,
and all debts, liabilities, and duties of the other
entity that has converted shall thenceforth
attach to the domestic limited liability company and
may be enforced against it to the same extent as
if those debts, liabilities, and duties had been
incurred or contracted by it.
(g) Unless
otherwise agreed, or as required under applicable non-Rhode Island law, the
converting other entity shall not be required to
wind up its affairs or pay its liabilities and
distribute its assets, and the conversion shall
not be deemed to constitute a dissolution of the other
entity and shall constitute a continuation of
the existence of the converting other entity in the
form of a domestic limited liability company.
(h) Prior to
filing a certificate of conversion to limited liability company the office of
the
secretary of state, the conversion shall be
approved in the manner provided for by the document,
instrument, agreement, or other writing, as the
case may be, governing the internal affairs of the
other entity and the conduct of its business or
by applicable law, as appropriate, and a limited
liability company agreement shall be approved by
the same authorization required to approve the
conversion.
(i) In connection
with a conversion hereunder, rights or securities of or interests in the
other entity which is to be converted to a
domestic limited liability company may be exchanged
for or converted into cash, property, or rights
or securities of or interests in such domestic limited
liability company or, in addition to or in lieu
thereof, may be exchanged for or converted into
cash, property, or rights or securities of or
interests in such domestic limited liability company or,
in addition to or in lieu thereof, may be
exchanged for or converted into cash, property, or rights
or securities of or interests in another
domestic limited liability company or other entity or may be
cancelled.
(i) (j)
The provisions of this section shall not be construed to limit the
accomplishment of
a change in the law governing, or the domicile
of, an other entity to the state of Rhode Island by
any other means provided for in a limited
liability company agreement or other agreement or as
otherwise permitted by law, including by the
amendment of a limited liability company
agreement or other agreement.
7-16-5.2.
Approval of conversion of a limited liability company. – (a) A
domestic
limited liability company may convert to a corporation,
a business trust, or association, a real
estate investment trust, a common law trust, a
sole proprietorship or any other unincorporated
business or entity including a general
partnership, (whether general or limited including a
registered limited liability partnership) or a limited
partnership, organized, formed, or created
under the laws of the state of Rhode Island, or a foreign
limited liability company upon the
authorization of the conversion in accordance
with this section.
(b) If the
limited liability company agreement specified the manner of authorizing a
conversion of the limited liability company, the
conversion shall be authorized as specified in the
limited liability company agreement. If the
limited liability company agreement does not specify
the manner of authorizing a conversion of the
limited liability company and does not prohibit a
conversion of the limited liability company, the
conversion shall be authorized in the same
manner as is specified in the limited liability
company agreement for authorizing a merger or
consolidation that involves the limited
liability company as a constituent party to the merger or
consolidation. If the limited liability company
agreement does not specify the manner of
authorizing a conversion of the limited
liability company or a merger or consolidate that involves
the limited liability company as a constituent
party and does not prohibit a conversion of the
limited liability company, the conversion shall
be authorized by the approval by the members or,
if there is more than one class or group of
members, then by each class or group of members, in
either case, by members who own more than fifty
percent (50%) of the then current percentage or
other interest in the profits of the domestic
limited liability company owned by all of the members
or by the members in each class or group, as
appropriate.
(c) Unless
otherwise agreed, the conversion of a domestic limited liability company to
another entity or business form pursuant to this
section shall not require such limited liability
company to wind up its affairs under section
7-16-45 or pay its liabilities and distribute its assets
under section 7-16-46, and the conversion shall not
constitute a dissolution of such limited
liability company. When a limited liability
company has converted to another entity or business
form pursuant to this section, for all purposes
of the laws of the state of Rhode Island, the other
entity or business form shall be deemed to be
the same entity as the converting limited liability
company and conversion shall constitute a
continuation of the existence of the limited liability
company in the form of such other entity or
business form.
(d) In connection
with a conversion of a domestic limited liability company to another
entity or business form pursuant to this
section, rights or securities of or interests in the domestic
limited liability company which is to be
converted may be exchanged for or converted into cash,
property, rights or securities of or interests
in the entity or business form into which the domestic
limited liability company is being converted or,
in addition to or in lieu thereof, may be
exchanged for or converted into cash, property,
rights or securities of or interests in another entity
or business form or may be cancelled.
(e) If a
limited liability company shall convert in accordance with this section to
another
entity or business form organized, formed or
created under the laws of a jurisdiction other than
the state of Rhode Island, a certificate of
conversion to non-Rhode Island entity shall be filed in
the office of the secretary of state. The
certificate of conversion to non-Rhode Island entity shall
state:
(1) The name of
the limited liability company and, if it has been changed, the name under
which its certificate of formation was
originally filed;
(2) The date of
filing of its original certificate of formation with the secretary of state;
(3) The
jurisdiction in which the entity or business form, to which the limited
liability
company shall be converted, is organized, formed
or created, and the name and type of such
entity or business form;
(4) The future
effective date or time (which shall be a date or time certain) of the
conversion if it is not to be effective upon the
filing of the certificate of conversion to non-Rhode
Island entity;
(5) That the
conversion has been approved in accordance with this section;
(6) The
agreement of the limited liability company that it may be served with process
in
the state of Rhode Island in any action, suit or
proceeding for enforcement of any obligation to
the limited liability company arising while it
was a limited liability company of the state of Rhode
Island, and that it irrevocably appoints the
secretary of state as its agent to accept service of
process in any such action, suit or proceeding;
(f) Upon the
filing in the office of the secretary of state of the certificate of conversion
to
non-Rhode Island entity or upon the future
effective date or time of the certificate of conversion
to non-Rhode Island entity and payment to the
secretary of state of all fees prescribed in this
chapter, the secretary of state shall certify
that the limited liability company has filed all
documents and paid all fees required by this
chapter, and thereupon the limited liability company
shall cease to exist as a limited liability
company of the state of Rhode Island. Such certificate of
the secretary of state shall be prima facie
evidence of the conversion by such limited liability
company out of the state of Rhode Island.
(g) The
conversion of a limited liability company out of the state of Rhode Island in
accordance with this section and the resulting
cessation of its existence as a limited liability
company of the state of Rhode Island pursuant to
a certificate of conversion to non-Rhode Island
entity shall not be deemed to affect any
obligations or liabilities of the limited liability company
incurred prior to such conversion or the
personal liability of any person incurred prior to such
conversion, nor shall it be deemed to affect the
choice of laws applicable to the limited liability
company with respect to matters arising prior to
such conversion.
(h) When a
limited liability company has been converted to another entity or business
form pursuant to this section, the other entity
or business form shall, for all purposes of the laws
of the state of Rhode Island, be deemed to be
the same entity as the limited liability company.
When any conversion shall have become effective
under this section, for all purposes of the laws
of the state of Rhode Island, all of the rights,
privileges and powers of the limited liability
company that has converted, and all property,
real, personal and mixed, and all such debts due to
such limited liability company, as well as all
other things and causes of action belonging to such
limited liability company, shall remain vested
in the other entity or business form to which such
limited liability company has converted and
shall be the property of such other entity or business
form, and the title to any real property vested by
deed or otherwise in such limited liability
company shall not revert to such limited
liability company or be in any way impaired by reason
of this chapter; but all rights of creditors and
all liens upon any property of such limited liability
company shall be preserved unimpaired, and all
debts, liabilities and duties of the limited liability
company that has converted shall remain attached
to the other entity or business form to which
such limited liability company has converted,
and may be enforced against it to the same extent
as if said debts, liabilities and duties had
originally been incurred or contracted by it in its
capacity as such other entity or business form.
The rights, privileges, powers and interests in
property of the limited liability company that
has converted, as well as the debts, liabilities and
duties of such limited liability company, shall
not be deemed, as a consequence of the conversion,
to have been transferred to the other entity or
business form to which such limited liability
company has converted for any purpose of the
laws of the state of Rhode Island.
SECTION 5.
Sections 7-16-5.3 and 7-16-5.4 of the General Laws in Chapter 7-16
entitled "The Rhode Island Limited
Liability Company Act" are hereby repealed.
7-16-5.3.
Conversion of general partnership to a limited liability company. --
(a) Any
domestic or foreign general partnership
(including registered limited liability partnerships) may
convert to a limited liability company by filing
articles of organization that meet the requirements
of section 7-16-6 or by filing an amendment or
restatement of articles of organization of an
existing limited liability company that meets
the requirements of section 7-16-2, accompanied in
any case by a certificate of conversion to a
limited liability company duly executed by one or
more partners of the former general partnership
authorized to sign a certificate of conversion and
one or more persons authorized to sign a
certificate of conversion on behalf of the limited liability
company, which shall include the following:
(1) The name
of the former general partnership and the name of the limited liability
company as set forth in its articles of
organization;
(2) The date of
the initial partnership agreement of the former general partnership and all
amendments of the agreement, and the
jurisdiction where the former general partnership was first
created, formed or otherwise came into being,
and if it has changed, its jurisdiction immediately
prior to its conversion; and
(3) A
statement that the conversion has been approved by the partners in the manner
provided in the partnership agreement for
amendments to the partnership agreement or, if no such
provision is made in the partnership agreement,
by all partners.
(b) Nothing in
this section shall be construed to require, or be deemed to constitute, a
dissolution or termination of the general
partnership prior to its conversion to a limited liability
company as permitted in this section.
(c) Following
the conversion of the general partnership to a limited liability company:
(1) The
limited liability company shall upon and after conversion possess all the
rights,
privileges, immunities, powers, and franchises,
of a public as well as a private nature, of the
former general partnership and shall be subject
to all the restrictions, disabilities, and duties of the
former general partnership to the extent those
rights, privileges, immunities, powers, franchises,
restrictions, disabilities, and duties were
applicable to the former general partnership and to the
extent those rights, privileges, immunities,
powers, franchises, restrictions, disabilities, and duties
are applicable to the limited liability company
after the conversion.
(2) All
property, real, personal and mixed, and all debts due on whatever account,
including promises to make capital
contributions, and all other choices in action and all and every
other interest of or belonging to the former
general partnership shall be vested in the limited
liability company after the conversion without
further act or deed;
(3) The title
to all real estate and any interest in it vested in any former general
partnership and the limited liability company
shall not revert or be in any way impaired by reason
of the conversion;
(4) The
limited liability company shall be responsible and liable for all liabilities
and
obligations of the former general partnership,
and any claim existing or action or proceeding
pending by or against the former general
partnership may be prosecuted as if the conversion had
not taken place, or the limited liability
company may be substituted in the action;
(5) Neither
the rights of creditors nor any liens on the property of the former general
partnership shall be impaired by the conversion;
(6) Nothing in
this section shall abridge or impair any rights that may otherwise be
available to the partners under the partnership
agreement of the former general partnership,
except as amended in connection with the
conversion, and under applicable law; and
(7) The
limited liability company shall be deemed to be the successor of the general
partnership and to have succeeded by operation
of law to the interest in all property, real, personal
and mixed or any interest therein of the former
general partnership.
7-16-5.4.
Conversion of sole proprietorship to a limited liability company. --
(a) Any
sole proprietorship owned by a Rhode Island
resident may convert to a limited liability company
by filing articles of organization that meet the
requirements of section 7-16-6 or by filing an
amendment or restatement of articles of
organization of an existing limited liability company that
meets the requirements of section 7-16-2,
accompanied in any case by a certificate of conversion
to a limited liability company, which shall
include the following:
(1) The name
of the former sole proprietorship and the name of the limited liability
company as set forth in its articles of
organization; and
(2) The date
the sole proprietor commenced his or her business.
(b) Following
the conversion of the sole proprietorship to a limited liability company:
(1) The limited
liability company shall upon and after conversion possess all the rights,
privileges, immunities, powers, and franchises,
of a public as well as a private nature, of the
former sole proprietorship and shall be subject
to all the restrictions, disabilities, and duties of the
former sole proprietorship to the extent those
rights, privileges, immunities, powers, franchises,
restrictions, disabilities and duties were
applicable to the former sole proprietorship and to the
extent those rights, privileges, immunities,
powers, franchises, restrictions, disabilities, and duties
are applicable to the limited company after the
conversion;
(2) All
property, real, personal and mixed, and all debts due on whatever account and
all
other choices in action and all and every other
interest of or belonging to the former sole
proprietorship shall be vested in the limited
liability company after the conversion without further
act or deed;
(3) The title to
all real estate and any interest in it vested in the former sole
proprietorship and in the certificate of
conversion identified as being part of the conversion and in
the limited liability company shall not revert
or be in any way impaired by reason of the
conversion;
(4) The
limited liability company shall be responsible and liable for all liabilities
and
obligations of the former sole proprietorship,
and any claim existing or action or proceeding
pending by or against the former sole proprietorship
may be prosecuted as if the conversion had
not taken place, or the limited liability
company may be substituted in the action;
(5) Neither
the rights of creditors nor any liens on the property of the former sole
proprietorship shall be impaired by the
conversion;
(6) Nothing in
this section shall abridge or impair any rights that may otherwise be
available to the owner of the former sole
proprietorship, except as amended in connection with
the conversion, and under applicable law; and
(7) The
limited liability company shall be deemed to be the successor of the sole
proprietorship and to have succeeded by
operation of law to the interest in all property, real,
personal and mixed or any interest therein of
the former sole proprietorship.
SECTION 6. This
act shall take effect upon passage.
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LC02833
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