TITLE 7
Corporations, Associations, and Partnerships
CHAPTER 7-16
The Rhode Island Limited Liability Company Act
SECTION 7-16-5.2
§ 7-16-5.2 Approval of conversion of a
limited liability company.
(a) A domestic limited liability company may convert to a corporation, a
business trust, or association, a real estate investment trust, a common law
trust, a sole proprietorship, or any other unincorporated business or entity
including a partnership, (whether general or limited, including a registered
limited liability partnership), or a foreign limited liability company upon the
authorization of the conversion in accordance with this section.
(b) If the limited liability company agreement specified the
manner of authorizing a conversion of the limited liability company, the
conversion shall be authorized as specified in the limited liability company
agreement. If the limited liability company agreement does not specify the
manner of authorizing a conversion of the limited liability company and does
not prohibit a conversion of the limited liability company, the conversion
shall be authorized in the same manner as is specified in the limited liability
company agreement for authorizing a merger or consolidation that involves the
limited liability company as a constituent party to the merger or
consolidation. If the limited liability company agreement does not specify the
manner of authorizing a conversion of the limited liability company or a merger
or consolidate that involves the limited liability company as a constituent
party and does not prohibit a conversion of the limited liability company, the
conversion shall be authorized by the approval by the members or, if there is
more than one class or group of members, then by each class or group of
members, in either case, by members who own more than fifty percent (50%) of
the then-current percentage or other interest in the profits of the domestic
limited liability company owned by all of the members or by the members in each
class or group, as appropriate.
(c) Unless otherwise agreed, the conversion of a domestic
limited liability company to another entity or business form pursuant to this
section shall not require such limited liability company to wind up its affairs
under § 7-16-45 or pay its liabilities and distribute its assets under
§ 7-16-46, and the conversion shall not constitute a dissolution of such
limited liability company. When a limited liability company has converted to
another entity or business form pursuant to this section, for all purposes of
the laws of the state of Rhode Island, the other entity or business form shall
be deemed to be the same entity as the converting limited liability company and
conversion shall constitute a continuation of the existence of the limited
liability company in the form of such other entity or business form.
(d) In connection with a conversion of a domestic limited
liability company to another entity or business form pursuant to this section,
rights or securities of or interests in the domestic limited liability company
that is to be converted may be exchanged for or converted into cash, property,
rights or securities of or interests in the entity or business form into which
the domestic limited liability company is being converted or, in addition to or
in lieu thereof, may be exchanged for or converted into cash, property, rights
or securities of or interests in another entity or business form or may be
cancelled.
(e) If a limited liability company shall convert in
accordance with this section to another entity or business form organized,
formed, or created under the laws of a jurisdiction other than the state of
Rhode Island or to a Rhode Island unincorporated "other entity", a certificate
of conversion to non-Rhode Island entity shall be filed in the office of the
secretary of state. The certificate of conversion to non-Rhode Island entity
shall state:
(1) The name of the limited liability company and, if it has
been changed, the name under which its certificate of formation was originally
filed;
(2) The date of filing of its original certificate of
formation with the secretary of state;
(3) The jurisdiction in which the entity or business form, to
which the limited liability company shall be converted, is organized, formed,
or created, and the name and type of such entity or business form;
(4) The future effective date or time (which shall be a date
or time certain) of the conversion if it is not to be effective upon the filing
of the certificate of conversion to non-Rhode Island entity;
(5) That the conversion has been approved in accordance with
this section;
(6) The agreement of the limited liability company that it
may be served with process in the state of Rhode Island in any action, suit, or
proceeding for enforcement of any obligation to the limited liability company
arising while it was a limited liability company of the state of Rhode Island,
and that it irrevocably appoints the secretary of state as its agent to accept
service of process in any such action, suit, or proceeding;
(f) Upon the filing in the office of the secretary of state
of the certificate of conversion to non-Rhode Island entity or upon the future
effective date or time of the certificate of conversion to non-Rhode Island
entity and upon payment of all fees due by the limited liability company, as
evidenced by an appropriate certificate of good standing issued by the Rhode
Island division of taxation, the secretary of state shall certify that the
limited liability company has filed all documents and paid all fees required by
this chapter, and thereupon the limited liability company shall cease to exist
as a limited liability company of the state of Rhode Island. Such certificate
of the secretary of state shall be prima facie evidence of the conversion by
such limited liability company out of the state of Rhode Island.
(g) The conversion of a limited liability company out of the
state of Rhode Island in accordance with this section and the resulting
cessation of its existence as a limited liability company of the state of Rhode
Island pursuant to a certificate of conversion to non-Rhode Island entity shall
not be deemed to affect any obligations or liabilities of the limited liability
company 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 laws applicable to the limited liability company with respect to
matters arising prior to such conversion.
(h) When a limited liability company 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 limited liability company. 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 limited liability company that has converted, and all property,
real, personal, and mixed, and all such debts due to such limited liability
company, as well as all other things and causes of action belonging to such
limited liability company, shall remain vested in the other entity or business
form to which such limited liability company 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 limited liability company shall
not revert to such limited liability company or be in any way impaired by
reason of this chapter; but all rights of creditors and all liens upon any
property of such limited liability company shall be preserved unimpaired, and
all debts, liabilities, and duties of the limited liability company that has
converted shall remain attached to the other entity or business form to which
such limited liability company 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 interests in property of the limited
liability company that has converted, as well as the debts, liabilities, and
duties of such limited liability company, shall not be deemed, as a consequence
of the conversion, to have been transferred to the other entity or business
form to which such limited liability company has converted for any purpose of
the laws of the state of Rhode Island.
History of Section.
(P.L. 1999, ch. 233, § 1; P.L. 2007, ch. 94, § 4; P.L. 2007, ch. 112,
§ 4; P.L. 2015, ch. 80, § 3; P.L. 2015, ch. 88, § 3.)
