§415A-16.5 - Conversion into and from professional corporations.

§415A-16.5 Conversion into and from
professional corporations. (a) A professional corporation may adopt a
plan of conversion and convert to any other entity if:

(1) The board of directors and shareholders of the
professional corporation approve a plan of conversion in the manner prescribed
by section 414-313 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 shareholder of the converting entity, unless otherwise agreed to by that
shareholder, 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 shareholders of the professional corporation,
as a result of the conversion, shall not become personally liable without the
shareholders' 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 other entity may adopt a plan of
conversion and convert to a professional corporation if the conversion is
permitted by and complies with the laws under which the 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 professional
corporation is approved, and at any time before the conversion becomes
effective, the plan of conversion may be abandoned by the professional
corporation without shareholder action and in accordance with the procedures
set forth in the plan of conversion or, if these procedures are not provided in
the plan, in the manner determined by the board of directors. 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 §2; am L 2001, c 129, §54; am L
2002, c 40, §49]