§ 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 consolidation 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 the 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 the 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 of 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, 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 the 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 the limited liability company,
as well as all other things and causes of action belonging to the limited liability
company, shall remain vested in the other entity or business form to which the limited
liability company has converted and shall be the property of the other entity or business
form, and the title to any real property vested by deed or otherwise in the limited
liability company shall not revert to the 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 the 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 the 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 the 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 the 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 the limited liability company has converted
for any purpose of the laws of the state of Rhode Island.