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 Oklahoma Statutes (Last Updated: September 18, 2014)
 Title 18. CORPORATIONS

  § 18-2054.2. Conversion of limited liability company to a business entity.  

Latest version.

  • CONVERSION OF A LIMITED

    LIABILITY COMPANY TO A BUSINESS ENTITY

    A.  A domestic limited liability company may convert to a business entity upon the authorization of such conversion in accordance with this section.  As used in this section, the term “business entity” means a domestic or foreign corporation, partnership, whether general or limited, business trust, common law trust, or other unincorporated association.

    B.  If the operating agreement specifies the manner of authorizing a conversion of the limited liability company, the conversion shall be authorized as specified in the operating agreement.

    C.  If the operating 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 operating agreement for authorizing a merger or consolidation that involves the limited liability company as a constituent party to a merger or consolidation.

    D.  If the operating 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 of a majority of the membership interest or, if there is more than one class or group of members, then by a majority of the membership interest in each class or group of members.  Notwithstanding the foregoing, in addition to any other authorization required by this section, if the business entity into which the limited liability company is to convert does not afford all of its interest holders protection against personal liability for the debts of the business entity, the conversion must be authorized by any and all members who would be exposed to personal liability.

    E.  Unless otherwise agreed, the conversion of a domestic limited liability company to another business entity pursuant to this section shall not require the limited liability company to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not constitute a dissolution of the limited liability company.

    F.  In a conversion of a domestic limited liability company to a business entity under this section, rights or securities of or interests in the domestic limited liability company which are to be converted may be exchanged for or converted into cash, property, rights or securities of or interests in the business entity to 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 business entity or may be canceled.

    G.  If the governing act of the domestic business entity to which the limited liability company is converting does not provide for the filing of a conversion notice with the Secretary of State or the limited liability company is converting to a foreign business entity, articles of conversion executed in accordance with Section 2006 of this title, shall be filed in the Office of the Secretary of State in accordance with Section 2007 of this title.  The articles of conversion shall state:

    1.  The name of the limited liability company and, if it has been changed, the name under which its articles of organization were originally filed;

    2.  The date of filing of its original articles of organization with the Secretary of State;

    3.  The name the business entity to which the limited liability company is converting and its jurisdiction of formation, if a foreign business entity;

    4.  The future effective date or time of the conversion, which shall be a date or time certain not later than ninety (90) days after the filing, if it is not to be effective upon the filing of the articles of conversion;

    5.  That the conversion has been approved in accordance with this section;

    6.  The agreement of the foreign business entity that it may be served with process in this state in any action, suit or proceeding for enforcement of any obligation of the foreign business entity arising while it was a domestic limited liability company, and that it irrevocably appoints the Secretary of State as its agent to accept service of process in any such action, suit or proceeding, and its address to which a copy of the process shall be mailed to it by the Secretary of State; and

    7.  If the domestic business entity to which the domestic limited liability company is converting was required to make a filing with the Secretary of State as a condition of its formation, the type and date of such filing.

    H.  Upon the filing of a conversion notice with the Secretary of State, whether under subsection G of this section or under the governing act of the domestic business entity to which the limited liability company is converting, the filing of any formation document required by the governing act of the domestic business entity to which the limited liability company is converting, and payment to the Secretary of State of all prescribed fees, the Secretary of State shall certify that the limited liability company has filed all documents and paid all required fees, and thereupon the limited liability company shall cease to exist as a limited liability company of this state.  The Secretary of State’s certificate shall be prima facie evidence of the conversion by the limited liability company.

    I.  The conversion of a limited liability company to a business entity under this section and the resulting cessation of its existence as a domestic limited liability company shall not be deemed to affect any obligations or liabilities of the limited liability company incurred before the conversion or the personal liability of any person incurred before the conversion, nor shall it be deemed to affect the choice of law applicable to the limited liability company with respect to matters arising before the conversion.

    J.  When a limited liability company has converted to a business entity under this section, the business entity shall be deemed to be the same entity as the limited liability company.  All of the rights, privileges and powers of the limited liability company that has converted, and all property, real, personal and mixed, and all 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 business entity to which the limited liability company has converted and shall be the property of the business entity, and the title to any real property vested by deed or otherwise in the limited liability company shall not revert or be in any way impaired by reason of the conversion; 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 business entity 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 business entity.  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 business entity to which the limited liability company has converted for any purpose of the laws of this state.

Added by Laws 2001, c. 405, § 36, eff. Nov. 1, 2001.  Amended by Laws 2004, c. 255, § 53, eff. Nov. 1, 2004; Laws 2008, c. 253, § 30.

Note

NOTE:  Laws 2008, c. 382, § 315, which changed the effective date of Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102 (2009).