Chapter 077

2011 -- H 5781 SUBSTITUTE A

Enacted 06/20/11

 

A N A C T

RELATING TO CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS - LIMITED LIABILITY COMPANIES - FILING

     

     Introduced By: Representatives Marcello, and Carnevale

     Date Introduced: March 03, 2011

 

It is enacted by the General Assembly as follows:

 

     SECTION 1. Section 7-16-8 of the General Laws in Chapter 7-16 entitled "The Rhode

Island Limited Liability Company Act" is hereby amended to read as follows:

 

     7-16-8. Filing. -- (a) The secretary of state may not accept for filing any document under

this chapter which does not conform with law.

      (b) The secretary of state may not accept for filing any organizational document,

qualification, registration, change of resident agent report, service of process, notice or other

document until all required filing and other fees have been paid to the secretary of state.

      (c) The secretary of state may not accept for filing any article of dissolution, cancellation

of registration, article of merger, unless the surviving entity is a domestic entity of record with the

office of the secretary of state, or the reinstatement of a limited liability company's certificate of

organization or registration until all required filing and other fees have been paid to the secretary

of state and all fees and franchise taxes have been paid.

     (d) The secretary of state may not accept for filing a certificate of conversion to a non-

Rhode Island entity until all required filing and other fees have been paid to the secretary of state

and all fees and franchise taxes have been paid.

      (d)(e) When the secretary of state accepts the articles of organization or any other

document, the secretary of state shall:

      (1) Endorse on the document the date and time of its acceptance for filing;

      (2) Promptly file the document; and

      (3) Issue a certificate or other evidence which establishes:

      (i) That the document was accepted for filing by the secretary of state; and

      (ii) The date and time of the acceptance for filing.

      (e)(f) The document becomes effective upon the issuance of the certificate or other

evidence or at any later date that is set forth within the document, not more than thirty (30) days

after the filing of such document.

 

     SECTION 2. Section 7-1.2-1008 of the General Laws in Chapter 7-1.2 entitled "Rhode

Island Business Corporation Act" is hereby amended to read as follows:

 

     7-1.2-1008. 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,

upon payment of all fees and franchise taxes by the corporation, as evidenced by an appropriate

certificate of good standing, the corporation shall file with the secretary of state a certificate of

conversion executed in accordance with 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 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. This act shall take effect upon passage.

     

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LC01549/SUB A

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