(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.

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Terms Used In Rhode Island General Laws 7-16-5.2

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Business: means any trade, occupation or other commercial activity engaged in for gain, profit or livelihood for which a corporation can be organized under chapter 1. See Rhode Island General Laws 7-16-2
  • Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • domestic limited liability company: means an entity that is organized and existing under the laws of this state pursuant to this chapter. See Rhode Island General Laws 7-16-2
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Filing: means delivered to the secretary of state in either paper format or electronic transmission through a medium provided and authorized by the secretary of state. See Rhode Island General Laws 7-16-2
  • Foreign limited liability company: means a limited liability company formed under the laws of any state other than this state or any foreign country. See Rhode Island General Laws 7-16-2
  • interest: means a member's rights in the limited liability company, collectively, including the member's share of the profits and losses of the limited liability company, the right to receive distributions of the limited liability company's assets, and any right to vote or participate in management of the limited liability company. See Rhode Island General Laws 7-16-2
  • 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.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • 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.
  • Person: means a natural person, partnership, limited partnership, domestic or foreign limited liability company, trust, estate, corporation, non-business corporation or other association. See Rhode Island General Laws 7-16-2
  • real estate: may be construed to include lands, tenements, and hereditaments and rights thereto and interests therein. See Rhode Island General Laws 43-3-10
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • Service of process: The service of writs or summonses to the appropriate party.
  • State: means a state, territory or possession of the United States, or the District of Columbia. See Rhode Island General Laws 7-16-2

(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.

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; P.L. 2017, ch. 371, § 2; P.L. 2017, ch. 376, § 2; P.L. 2018, ch. 346, § 15.