Texas Business Organizations Code 101.628 – Authorization of Conversion
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(a) A converting series of a domestic limited liability company may convert to a converted series of the company by adopting a plan of conversion of the converting series to a converted series of the company.
(b) If the company agreement of the limited liability company specifies the manner of adopting a plan of conversion of a converting series to a converted series of that company, the plan of conversion must be adopted as specified by the company agreement. If the company agreement does not specify the manner of adopting a plan of conversion of a converting series of the company to a converted series of that company and does not prohibit a conversion of a converting series to a converted series, the plan of conversion must be authorized by members of the converting series who own more than 50 percent of the then-current percentage or other interest in the profits of the converting series owned by all of the members of the converting series. If the plan of conversion provides for any amendment to the company agreement, the plan of conversion must also be approved in the manner required by this subchapter for the approval of that amendment.
Terms Used In Texas Business Organizations Code 101.628
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Conversion: means :
(A) the continuance of a domestic entity as a non-code organization of any type;
(B) the continuance of a non-code organization as a domestic entity of any type;
(C) the continuance of a domestic entity of one type as a domestic entity of another type;
(D) the continuance of a domestic entity of one type as a foreign entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity; or
(E) the continuance of a foreign entity of one type as a domestic entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity. See Texas Business Organizations Code 1.002 - Dependent: A person dependent for support upon another.
- Domestic: means , with respect to an entity, that the entity is formed under this code or the entity's internal affairs are governed by this code. See Texas Business Organizations Code 1.002
- in writing: includes any representation of words, letters, or figures, whether by writing, printing, or other means. See Texas Government Code 312.011
- Limited liability company: means an entity governed as a limited liability company under Title 3 or 7. See Texas Business Organizations Code 1.002
- Member: means :
(A) in the case of a limited liability company, a person who has become, and has not ceased to be, a member in the limited liability company as provided by its governing documents or this code;
(B) in the case of a nonprofit corporation, a person who has membership rights in the nonprofit corporation under its governing documents;
(C) in the case of a cooperative association, a member of a nonshare or share association;
(D) in the case of a nonprofit association, a person who has membership rights in the nonprofit association under its governing documents; or
(E) in the case of a professional association, a person who has membership rights in the professional association under its governing documents. See Texas Business Organizations Code 1.002 - Membership interest: means a member's interest in an entity. See Texas Business Organizations Code 1.002
- 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.
- Person: means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002
- Plan of conversion: means a document that conforms with the requirements of § 10. See Texas Business Organizations Code 1.002
- Protected series: means a series of a domestic limited liability company that is established as a protected series in accordance with § 101. See Texas Business Organizations Code 1.002
- Registered series: means a series of a domestic limited liability company that is formed as a registered series in accordance with § 101. See Texas Business Organizations Code 1.002
(c) A converting series may not convert if a member associated with the converting series, as a result of the conversion, would become subject to liability under the company agreement as a member, without that member’s consent, for a liability or other obligation of the converted series for which the member is not liable under the company agreement as a member of the converting series before the conversion.
(d) At the time a conversion takes effect, each member of the converting series has, unless otherwise agreed to by that member, a membership interest in and is the member of the converted series.
(e) A plan of conversion must be in writing and must include:
(1) the name of the converting series;
(2) the name of the converted series;
(3) a statement that the converting protected series or registered series, as applicable, is continuing its existence in the form of the converted protected series or registered series, as applicable;
(4) the manner and basis, including use of a formula, of converting the membership interests of the converting series into membership interests of the converted series;
(5) any amendment to the company agreement that may be necessary to reflect the conversion of the converting series and the establishment of the converted series; and
(6) the certificate of registered series required to be filed under this subchapter if the converted series is a registered series.
(f) An amendment or certificate of registered series described by Subsection (e)(5) or (6) may be included in the plan of conversion by an attachment or exhibit to the plan.
(g) Any of the terms of the plan of conversion may be made dependent on a fact ascertainable outside of the plan if the manner in which the fact will operate on the terms of the conversion is clearly and expressly stated in the plan. In this subsection, “fact” includes the occurrence of any event, including a determination or action by any person.