PART X. CONVERSIONS

 

§414-271  Conversion into and fromcorporations.  (a)  A domestic corporation may adopt a plan of conversionand convert to a foreign corporation or any other entity if:

(1)  The board of directors and shareholders of thedomestic corporation approve a plan of conversion in the manner prescribed bysection 414-313 and 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, eachshareholder of the domestic corporation, unless otherwise agreed to by thatshareholder, owns an equity interest or other ownership interest in, and is ashareholder, partner, member, owner, or other security holder of, the convertedentity;

(4)  The shareholders of the domestic corporation, asa result of the conversion, shall not become personally liable, without theshareholders' consent, for the liabilities or obligations of the convertedentity; 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 entitymay adopt a plan of conversion and convert to a domestic corporation if theconversion is permitted by and complies with the laws of the state or countryin which the foreign corporation or other entity is incorporated, formed, ororganized.

(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 is continuingits 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 forms ofownership of the converted entity, or any combination thereof.

(d)  A plan of conversion may set forth any otherprovisions relating to the conversion that are not prohibited by law, includingwithout limitation the initial bylaws and officers of the converted entity.

(e)  After a conversion of a domestic orforeign corporation is approved, and at any time before the conversion becomeseffective, the plan of conversion may be abandoned by the converting entitywithout shareholder action and in accordance with the procedures set forth inthe plan of conversion or, if these procedures are not provided in the plan, inthe manner determined by the board of directors.  If articles of conversionhave been filed with the department director but the conversion has not becomeeffective, the conversion may be abandoned if a statement, executed on behalfof the converting entity by an officer or other duly authorized representativeand stating that the plan of conversion has been abandoned in accordance withapplicable law, is filed with the department director prior to the effectivedate of the conversion.  If the department director finds the statementsatisfies the requirements provided by law, the department director, after allfees 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 theconverting entity 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 2000, c 244, pt of §1; am L 2001, c129, §§27, 28]