§414D-207  Conversions into and fromcorporations.  (a)  A domestic corporation may adopt a plan of conversionand convert to a foreign corporation or any other business entity if:

(1)  The board of directors and members of thedomestic corporation approve a plan of conversion in the manner prescribed bysection 414D-202 and if the conversion is treated as a merger to which theconverting entity is a party and not the surviving entity;

(2)  The conversion is permitted by and complies withthe laws of the state or country in which the converted entity is to beincorporated, formed, or organized; and the incorporation, formation, ororganization of the converted entity complies with those laws;

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

(4)  The members of the domestic corporation, as aresult of the conversion, shall not become personally liable without themembers' consent, for the liabilities or obligations of the converted entity;and

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

(b)  Any foreign corporation or other businessentity may adopt a plan of conversion and convert to a domestic corporation ifthe conversion is permitted by and complies with the laws of the state orcountry in which the foreign corporation or other business entity isincorporated, formed, or organized.

(c)  A plan of conversion shall set forth:

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

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

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

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

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

(e)  After the conversion of a domesticcorporation is approved, and at any time before the conversion becomes effective,the plan of conversion may be abandoned by the domestic corporation inaccordance with the procedures set forth in the plan of conversion or, if theseprocedures are not provided in the plan, in the manner determined by the boardof directors.  If articles of conversion have been filed with the departmentdirector but the conversion has not become effective, the conversion may beabandoned if a statement, executed on behalf of the converting entity by anofficer or other duly authorized representative and stating that the plan ofconversion has been abandoned in accordance with applicable law, is filed withthe department director prior to the effective date of the conversion.  If thedepartment director finds that the statement satisfies the requirementsprovided by law, the department director, after all fees have been paid, shall:

(1)  Stamp the statement and include the date of thefiling;

(2)  File the document in the department director'soffice; and

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

(f)  Once the statement provided in subsection(e) is filed with the department director, the conversion shall be deemedabandoned and shall not be effective. [L 2001, c 105, pt of §1; am L 2002, c130, §57; am L 2006, c 235, §5]

 

Cross References

 

  Conversion of nonprofit accident and health or sicknessinsurance company into another entity, see chapter 432C.