(a)  A plan of interest exchange is not effective unless it has been approved:

(1)  By all the partners of a domestic acquired partnership entitled to vote on or consent to any matter; and

(2)  In a record, by each partner of the domestic acquired partnership that will have interest holder liability for debts, obligations, and other liabilities that are incurred after the interest exchange becomes effective, unless:

(i)  The partnership agreement of the partnership provides in a record for the approval of an interest exchange or a merger in which some or all its partners become subject to interest holder liability by the affirmative vote or consent of fewer than all the partners; and

(ii)  The partner consented in a record to or voted for that provision of the partnership agreement or became a partner after the adoption of that provision.

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Terms Used In Rhode Island General Laws 7-12.1-1133

  • Acquired entity: means the entity, all of one or more classes or series of interests of which are acquired in an interest exchange. See Rhode Island General Laws 7-12.1-1101
  • Acquiring entity: means the entity that acquires all of one or more classes or series of interests of the acquired entity in an interest exchange. See Rhode Island General Laws 7-12.1-1101
  • Interest: means :

    (i)  A share in a business corporation;

    (ii)  A membership in a nonprofit corporation;

    (iii)  A partnership interest in a general partnership;

    (iv)  A partnership interest in a limited partnership;

    (v)  A membership interest in a limited liability company;

    (vi)  A share in a general cooperative association;

    (vii)  A member's interest in a limited cooperative association;

    (viii)  A membership in an unincorporated nonprofit association;

    (ix)  A beneficial interest in a statutory trust, business trust, or common-law business trust; or

    (x)  A governance interest or distributional interest in any other type of unincorporated entity. See Rhode Island General Laws 7-12.1-1101

  • Interest exchange: means a transaction authorized by Rhode Island General Laws 7-12.1-1101
  • Interest holder: means :

    (i)  A shareholder of a business corporation;

    (ii)  A member of a nonprofit corporation;

    (iii)  A general partner of a general partnership;

    (iv)  A general partner of a limited partnership;

    (v)  A limited partner of a limited partnership;

    (vi)  A member of a limited liability company;

    (vii)  A shareholder of a general cooperative association;

    (viii)  A member of a limited cooperative association;

    (ix)  A member of an unincorporated nonprofit association;

    (x)  A beneficiary or beneficial owner of a statutory trust, business trust, or common-law business trust; or

    (xi)  Any other direct holder of an interest. See Rhode Island General Laws 7-12.1-1101

  • Interest holder liability: means :

    (i)  Personal liability for a liability of an entity which is imposed on a person:

    (A)  Solely by reason of the status of the person as an interest holder; or

    (B)  By the organic rules of the entity which make one or more specified interest holders or categories of interest holders liable in their capacity as interest holders for all or specified liabilities of the entity; or

    (ii)  An obligation of an interest holder under the organic rules of an entity to contribute to the entity. See Rhode Island General Laws 7-12.1-1101

  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Merger: means a transaction authorized by Rhode Island General Laws 7-12.1-1101
  • Organic law: means the law of an entity's jurisdiction of formation governing the internal affairs of the entity. See Rhode Island General Laws 7-12.1-1101
  • Organic rules: means the public organic record and private organic rules of an entity. See Rhode Island General Laws 7-12.1-1101
  • Partner: means a person that:

    (i)  Has become a partner in a partnership under Rhode Island General Laws 7-12.1-102

  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Partnership agreement: means the agreement, whether or not referred to as a partnership agreement and whether oral, implied, in a record, or in any combination thereof, of all the partners of a partnership concerning the matters described in Rhode Island General Laws 7-12.1-102
  • Plan: means a plan of merger, plan of interest exchange, plan of conversion, or plan of domestication. See Rhode Island General Laws 7-12.1-1101

(b)  An interest exchange involving a domestic acquired entity that is not a partnership is not effective unless it is approved by the domestic entity in accordance with its organic law.

(c)  An interest exchange involving a foreign acquired entity is not effective unless it is approved by the foreign entity in accordance with the law of the foreign entity’s jurisdiction of formation.

(d)  Except as otherwise provided in its organic law or organic rules, the interest holders of the acquiring entity are not required to approve the interest exchange.

History of Section.
P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.