PocketLaw | Illinois Compiled Statutes

Conversion

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(805 ILCS 415/Art. 2 heading)

ARTICLE 2. CONVERSION

(805 ILCS 415/111)

Sec. 111. Application of other Acts. The Business Corporation Act of 1983, the General Not For Profit Corporation Act of 1986, the Limited Liability Company Act, the Uniform Limited Partnership Act (2001), and the Uniform Partnership Act (1997) and the Limited Worker Cooperative Association Act, as now or hereafter amended, shall govern all matters related to the entities named in each of those Acts and in this Act except where inconsistent with the letter and purpose of this Act. This Act controls in the event of any conflict with the provisions of the above-named Acts or other laws.

(Source: P.A. 101-491, eff. 8-23-19; 102-351, eff. 8-13-21.)

(805 ILCS 415/201)

Sec. 201. Conversion authorized.

(a) By complying with this Article, a domestic entity may become:

(1) a domestic entity of a different type; or
(2) a foreign entity of a different type, if the conversion is authorized by the law of the foreign jurisdiction.

(b) By complying with the provisions of this Article applicable to foreign entities, a foreign entity may become a domestic entity of a different type if the conversion is authorized by the law of the foreign entity's jurisdiction of organization.

(c) If a protected agreement contains a provision that applies to a merger of a domestic entity, but does not refer to a conversion, the provision applies to a conversion of the entity as if the conversion were a merger until the provision is amended after the effective date of this Act.

(Source: P.A. 100-561, eff. 7-1-18.)

(805 ILCS 415/202)

Sec. 202. Plan of conversion.

(a) A domestic entity may convert to a different type of entity under this Article by approving a plan of conversion. The plan must be in a record and contain:

(1) the name and type of the converting entity;
(2) the name, jurisdiction of organization, and type of the converted entity;
(3) the manner of converting the interests in the converting entity into interests, securities, obligations, rights to acquire interests or securities, cash, or other property, or any combination of the foregoing;
(4) the proposed public organic document of the converted entity if it will be a filing entity;
(5) the full text of the private organic rules of the converted entity that are proposed to be in a record;
(6) the other terms and conditions of the conversion; and
(7) any other provision required by the law of this State or the organic rules of the converting entity.

(b) A plan of conversion may contain any other provision not prohibited by law.

(c) The entity shall maintain the plan of conversion in accordance with the entity's policy for maintaining books and records.

(Source: P.A. 100-561, eff. 7-1-18; 101-491, eff. 8-23-19.)

(805 ILCS 415/203)

Sec. 203. Approval of conversion.

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

(1) by a domestic converting entity:

(A) in accordance with the requirements, if any, in its organic rules for approval of a conversion;
(B) if its organic rules do not provide for approval of a conversion, in accordance with the requirements, if any, in its organic law and organic rules for approval of:

(i) in the case of an entity that is not a business corporation, a merger, as if the conversion were a merger; or
(ii) in the case of a business corporation, a merger requiring approval by a vote of the interest holders of the business corporation, as if the conversion were that type of merger; or

(C) if neither its organic law nor organic rules provide for approval of a conversion or a merger described in subparagraph (B)(ii), by all of the interest holders of the entity entitled to vote on or consent to any matter; and

(2) in a record, by each interest holder of a domestic converting entity that will have interest holder liability for liabilities that arise after the conversion becomes effective.

(b) A conversion of a foreign converting entity is not effective unless it is approved by the foreign entity in accordance with the law of the foreign entity's jurisdiction of organization.

(Source: P.A. 100-561, eff. 7-1-18; 101-491, eff. 8-23-19.)

(805 ILCS 415/204)

Sec. 204. Amendment or abandonment of plan of conversion.

(a) A plan of conversion of a domestic converting entity may be amended:

(1) in the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended; or
(2) by the governors or interest holders of the entity in the manner provided in the plan, but an interest holder that was entitled to vote on or consent to approval of the plan of conversion is entitled to vote on or consent to any amendment of the plan that will change:

(A) the amount or kind of interests, securities, obligations, rights to acquire interests or securities, cash, or other property, or any combination of the foregoing, to be received by any of the interest holders of the converting entity under the plan;
(B) the public organic document or private organic rules of the converted entity that will be in effect immediately after the conversion becomes effective, except for changes that do not require approval of the interest holders of the converted entity under its organic law or organic rules; or
(C) any other terms or conditions of the plan, if the change would adversely affect the interest holder in any material respect.

(b) After a plan of conversion has been approved by a domestic converting entity and before a statement of conversion becomes effective, the plan may be abandoned:

(1) as provided in the plan; or
(2) unless prohibited by the plan, in the same manner as the plan was approved.

(c) If a plan of conversion is abandoned after a statement of conversion has been filed with the Secretary of State and before the filing becomes effective, a statement of abandonment, signed on behalf of the entity, must be filed with the Secretary of State before the time the statement of conversion becomes effective. The statement of abandonment takes effect upon filing, and the conversion is abandoned and does not become effective. The statement of abandonment must contain:

(1) the name of the converting entity;
(2) the date on which the statement of conversion was filed; and
(3) a statement that the conversion has been abandoned in accordance with this Section.

(Source: P.A. 100-561, eff. 7-1-18.)

(805 ILCS 415/205)

Sec. 205. Statement of conversion; effective date.

(a) A statement of conversion must be signed on behalf of the converting entity and filed with the Secretary of State.

(b) A statement of conversion must contain:

(1) the name and type of the converting entity;
(2) the name and type of the converted entity;
(3) if the statement of conversion is not to be effective upon filing, the later date and time on which it will become effective, which may not be more than 90 days after the date of filing;
(4) a statement that the plan of conversion was approved in accordance with this Article;
(5) the text of the converted entity's public organic document, as an attachment, signed by a person authorized by the entity; and
(6) if the converted entity is a domestic limited liability partnership, the text of its statement of qualification, as an attachment, signed by a person authorized by the entity.

(c) In addition to the requirements of subsection (b), a statement of conversion may contain any other provision not prohibited by law.

(d) If the converted entity is a domestic entity, its public organic document, if any, must satisfy the requirements of the law of this State and may omit any provision that is not required to be included in a restatement of the public organic document.

(e) (Blank).

(f) A statement of conversion becomes effective upon the date and time of filing or the later date and time specified in the statement of conversion.

(Source: P.A. 100-561, eff. 7-1-18; 101-491, eff. 8-23-19.)

(805 ILCS 415/206)

Sec. 206. Effect of conversion.

(a) When a conversion becomes effective:

(1) the converted entity is:

(A) organized under and subject to the organic law of the converted entity; and
(B) the same entity without interruption as the converting entity, even though the organic law of the converted entity to require or allow the name of the converted entity may be modified;

(2) all property of the converting entity continues to be vested in the converted entity without assignment, reversion, or impairment;
(3) all liabilities of the converting entity continue as liabilities of the converted entity;
(4) except as provided by law other than this Act or the plan of conversion, all of the rights, privileges, immunities, powers, and purposes of the converting entity remain in the converted entity;
(5) the name of the converted entity may be substituted for the name of the converting entity in any pending action or proceeding;
(6) if a converted entity is a filing entity, its public organic document is effective and is binding on its interest holders;
(7) if the converted entity is a limited liability partnership, its statement of qualification is effective simultaneously;
(8) the private organic rules of the converted entity that are to be in a record, if any, approved as part of the plan of conversion are effective and are binding on and enforceable by:

(A) its interest holders; and
(B) in the case of a converted entity that is not a business corporation or nonprofit corporation, any other person that is a party to an agreement that is part of the entity's private organic rules; and

(9) the interests in the converting entity are converted, and the interest holders of the converting entity are entitled only to the rights provided to them under the plan of conversion and to any appraisal rights they have under Section 109 and the converting entity's organic law.

(b) Except as otherwise provided in the organic law or organic rules of the converting entity, the conversion does not give rise to any rights that an interest holder, governor, or third party would otherwise have upon a dissolution, liquidation, or winding-up of the converting entity.

(c) When a conversion becomes effective, a person that did not have interest holder liability with respect to the converting entity and that becomes subject to interest holder liability with respect to a domestic entity as a result of a conversion has interest holder liability only to the extent provided by the organic law of the entity and only for those liabilities that arise after the conversion becomes effective.

(d) When a conversion becomes effective:

(1) the conversion does not discharge any interest holder liability under the organic law of a domestic converting entity to the extent the interest holder liability arose before the conversion became effective;
(2) a person does not have interest holder liability under the organic law of a domestic converting entity for any liability that arises after the conversion becomes effective;
(3) the organic law of a domestic converting entity continues to apply to the release, collection, or discharge of any interest holder liability preserved under paragraph (1) as if the conversion had not occurred; and
(4) a person has whatever rights of contribution from any other person as are provided by the organic law or organic rules of the domestic converting entity with respect to any interest holder liability preserved under paragraph (1) as if the conversion had not occurred.

(e) When a conversion becomes effective, a foreign entity that is the converted entity:

(1) may be served with process in this State for the collection and enforcement of any of its liabilities; and
(2) appoints the Secretary of State as its agent for service of process for collecting or enforcing those liabilities.

(f) If the converting entity is a qualified foreign entity, the certificate of authority or other foreign qualification of the converting entity is canceled when the conversion becomes effective.

(g) A conversion does not require the entity to wind up its affairs and does not constitute or cause the dissolution of the entity.

(Source: P.A. 100-561, eff. 7-1-18; 101-491, eff. 8-23-19.)

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