§ 48-249-704 — Conversion of LLC

Tennessee § 48-249-704

• Jurisdiction: Tennessee
• Title: 48

Text

(a) General. Upon compliance with this section, a domestic LLC may convert to another entity, by filing with the secretary of state: (1) A certificate of conversion, pursuant to subsection (f); and (2) If the other entity into which the domestic LLC is to be converted is an entity formed under the laws of this state, the formational document, if any, required to be filed with the secretary of state by other laws of this state in connection with the formation of the other domestic entity, which formational document has been executed in accordance with the applicable law of this state with respect to such formational document. (b) Compliance with other applicable law. If the domestic LLC is to be converted into a foreign entity, the conversion shall be permitted under the laws of the jurisdiction of the foreign entity, and the foreign entity shall comply with such laws. If the domestic LLC is to be converted into a domestic entity, other than a domestic LLC, the conversion shall be permitted under the other laws of this state that apply to the domestic entity, and the domestic entity shall comply with such laws. Notwithstanding the absence of any express provision in the Tennessee Business Corporation Act, compiled in chapters 11-27 of this title, the Revised Uniform Partnership Act, compiled in title 61, chapter 1, or the Revised Uniform Limited Partnership Act, compiled in title 61, chapter 2, permitting or authorizing an LLC to convert to a corporation formed pursuant to the Tennessee Business Corporation Act, a partnership formed pursuant to the Revised Uniform Partnership Act, or a limited partnership formed pursuant to the Revised Uniform Limited Partnership Act, an LLC is authorized to convert to a corporation formed pursuant to the Business Corporation Act, a partnership formed pursuant to the Revised Uniform Partnership Act, or a limited partnership formed pursuant to the Revised Uniform Limited Partnership Act. (c) Approval. (1) The conversion of a domestic LLC to another entity shall be approved by: (A) A majority vote of the managers, if the LLC is a manager-managed LLC, or a majority vote of the directors, if the LLC is a director-managed LLC; and (B) A majority vote of the members, whether the LLC is a member-managed LLC, a manager-managed LLC or a director-managed LLC. (2) In the event a domestic LLC converts to a domestic or foreign partnership or to a domestic or foreign limited partnership, the conversion shall be subject to the approval of any member or holder of the domestic LLC who, at the effective date or time of the conversion, becomes a partner of the domestic or foreign partnership or a general partner of the domestic or foreign limited partnership, as applicable. (d) Winding up not required. The conversion of a domestic LLC to another entity, in accordance with this section, shall not require the domestic LLC to wind up its affairs under § 48-249-610 , or to pay its liabilities and distribute its assets under § 48-249-620 . (e) Exchange or conversion of interests. In connection with the conversion of a domestic LLC to another entity, in accordance with this section, rights or securities of or interests in the domestic LLC may be exchanged for, or converted into cash, property, rights or securities of or interests in, the other entity into which the domestic LLC is being converted, or, in addition to or in lieu of such exchange or conversion, may be exchanged for or converted into cash, property, rights or securities of or interests in another entity, or may be cancelled. (f) Contents of certificate of conversion. The certificate of conversion shall state the following: (1) The name of the domestic LLC, and, if it has been changed, the name under which its articles of organization were originally filed; (2) The date of filing of the original articles of organization of the domestic LLC with the secretary of state; (3) The name of the other entity into which the domestic LLC is to be converted, and the jurisdiction and type of entity of the other entity; (4) The future effective date or time of the conversion, if it is not to be effective upon the filing of the certificate of conversion; (5) That all required approvals of the conversion have been obtained by the domestic LLC; and (6) If the domestic LLC is converted to a foreign entity, a statement that the foreign entity agrees that it may be served with process in this state in any proceeding for the enforcement of any obligation of the domestic LLC arising prior to the date of the conversion, irrevocably appointing the secretary of state as its agent to accept service of process in any such proceeding, and specifying the address to which a copy of such process shall be mailed to it by the secretary of state. In the event of service under this subdivision (f)(6) upon the secretary of state, the procedures set forth in § 48-249-113 shall be applicable, except that the plaintiff in any such proceeding shall furnish the secretary of state with the address specified in the certificate of conversion provided for in this subdivision (f)(6), and any other address that the plaintiff may elect to furnish, together with copies of the process as required by the secretary of state, and the secretary of state shall notify the converted entity at all the addresses furnished by the plaintiff in accordance with the procedures set forth in § 48-249-113 . (g) Result of conversion. The conversion of a domestic LLC to another entity in accordance with this section, and the resulting cessation of its existence as a domestic LLC pursuant to a certificate of conversion, shall not be deemed to affect any debts, liabilities and obligations of the domestic LLC incurred prior to the conversion or the personal liability of any person incurred prior to the conversion, nor shall it be deemed to affect the law applicable to the domestic LLC with respect to matters arising prior to the conversion. (h) Effects of conversion. When any conversion of a domestic LLC to another entity has become effective under this section, for all purposes of the laws of this state: (1) The converted other entity shall be deemed to be the same entity as the domestic LLC; (2) All of the rights, privileges and powers of the domestic LLC and all property, real, personal and mixed, of and all debts due to the domestic LLC, as well as all other things and causes of action belonging to the domestic LLC, shall be and remain vested in the converted other entity, and shall be the property of the converted other entity; (3) The title to any real property vested by deed or otherwise in the domestic LLC shall not revert, or be in any way impaired, by reason of this section; (4) All rights of creditors, and all liens upon any property of the domestic LLC, shall be preserved unimpaired; (5) All debts, liabilities and obligations of the domestic LLC shall remain attached to the converted other entity, and may be enforced against it to the same extent as if the debts, liabilities and obligations had originally been incurred or contracted by it in its capacity as the converted other entity; (6) Any proceeding pending against the domestic LLC may be continued against the converted other entity as if the conversion had not occurred; and (7) The rights, privileges, powers and interests in property of the domestic LLC, as well as the debts, liabilities and obligations of the domestic LLC, shall not be deemed, as a consequence of the conversion, to have been transferred to the converted other entity for any purpose of the laws of this state. (i) Nonexclusivity. This section is nonexclusive. Any domestic LLC may be converted to another entity in any other manner provided by law.

Legislative History

Acts 2005, ch. 286, § 1; 2006, ch. 620, §§ 43 - 45.