§428-902.5 - Conversion into and from limited liability companies.

§428-902.5 Conversion into and from limited
liability companies. (a) A domestic limited liability company may adopt a
plan of conversion and convert to a foreign limited liability company or any
other entity if:

(1) The domestic limited liability company acts on
and its members approve a plan of conversion in the manner prescribed by
sections 428-904 to 428-906 and the conversion is treated as a merger to which
the converting entity is a party and not the surviving entity;

(2) The conversion is permitted by, and complies
with, the laws of the state or country in which the converted entity is to be
incorporated, formed, or organized; and the incorporation, formation, or
organization of the converted entity complies with such laws;

(3) At the time the conversion becomes effective,
each member of the converting entity, unless otherwise agreed to by that
member, owns an equity interest or other ownership interest in, and is a
shareholder, partner, member, owner, or other security holder of, the converted
entity;

(4) The members of the domestic limited liability
company shall not, as a result of the conversion, become personally liable
without the members' consent, for the liabilities or obligations of the
converted entity; and

(5) The converted entity is incorporated, formed, or
organized as part of or pursuant to the plan of conversion.

(b) Any foreign limited liability company or
other entity may adopt a plan of conversion and convert to a domestic limited
liability company if the conversion is permitted by and complies with the laws
of the state or country in which the foreign limited liability company or other
entity is incorporated, formed, or organized.

(1) The name of the converting entity and the converted
entity;

(2) A statement that the converting entity is
continuing its existence in the organizational form of the converted entity;

(3) A statement describing the organizational form of
the converted entity and the state or country under the laws of which the
converted entity is to be incorporated, formed, or organized; and

(4) The manner and basis of converting the shares or
other forms of ownership of the converting entity into shares or other forms of
ownership of the converted entity, or any combination thereof.

(d) A plan of conversion may set forth any
other provisions relating to the conversion that are not prohibited by law,
including without limitation the initial bylaws and officers of the converted
entity.

(e) After a conversion of a limited liability
company is approved, and at any time before the conversion becomes effective,
the plan of conversion may be abandoned by the converting entity without member
action and in accordance with the procedures set forth in the plan of
conversion or, if these procedures are not provided in the plan of conversion,
in the manner determined by the members. If articles of conversion have been
filed with the director but the conversion has not become effective, the
conversion may be abandoned if a statement, executed on behalf of the
converting entity by an officer or other duly authorized representative and
stating that the plan of conversion has been abandoned in accordance with
applicable law, is filed with the director prior to the effective date of the
conversion. If the director finds that the statement satisfies the
requirements provided by law, the director, after all fees have been paid
shall:

(1) Stamp the word "Filed" on the statement
and the date of the filing;

(2) File the document in the director's office; and

(3) Issue a certificate of abandonment to the
converting entity or its authorized representatives.

(f) Once the statement provided in subsection
(e) is filed with the director, the conversion shall be deemed abandoned and
shall not be effective. [L 1999, c 280, pt of §6; am L 2001, c 129, §98]