Okla. Stat. tit. 18 § 2054.2

Current through Laws 2024, c. 453.

Section 2054.2 - [Effective Until 11/1/2024] Conversion of limited liability company to an entity

A. A domestic limited liability company may convert to an entity upon the authorization of such conversion in accordance with this section. As used in this section, the term "entity" means a foreign limited liability company, a domestic or foreign public benefit limited liability company, a domestic or foreign corporation, a domestic or foreign partnership whether general or limited, and including a limited liability partnership and a limited liability limited partnership, and any domestic or foreign unincorporated nonprofit or for-profit association, trust or enterprise having members or having outstanding shares of stock or other evidences of financial, beneficial or membership interest therein, whether formed by agreement or under statutory authority or otherwise.

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 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 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 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 an 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 memberships or membership, economic or ownership interests in the 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 memberships or membership, economic or ownership interests in another entity or may be canceled.

G. If the governing act of a domestic 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 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 and type of entity to which the limited liability company is converting and its jurisdiction of formation, if a foreign 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 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 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 street address to which a copy of the process shall be mailed to it by the Secretary of State; and

7. If the domestic 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 entity to which the limited liability company is converting, the filing of any formation document required by the governing act of the domestic 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 domestic 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 domestic limited liability company.

I. The conversion of a domestic limited liability company to an 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 domestic limited liability company has converted to an entity under this section, the entity shall be deemed to be the same entity as the limited liability company. All of the rights, privileges and powers of the domestic 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 entity to which the domestic limited liability company has converted and shall be the property of the entity, and the title to any real property vested by deed or otherwise in the domestic 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 entity to which the domestic limited liability company has converted, and may be enforced against it to the same extent as if the debts, liabilities and duties had originally been incurred or contracted by it in its capacity as the entity. The rights, privileges, powers and interests in property of the domestic 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 entity to which the limited liability company has converted for any purpose of the laws of this state.

K. Nothing in this section shall be deemed to authorize the conversion of a charitable domestic limited liability company into another entity, if the charitable status of such domestic limited liability company would thereby be lost or impaired.

Okla. Stat. tit. 18, § 2054.2

Amended by Laws 2021 , c. 51, s. 22, eff. 11/1/2021.

Amended by Laws 2017 , c. 323, s. 53, eff. 11/1/2017.

Added by Laws 2001 , SB 610, c. 405, § 36, eff. 11/1/2001; Amended by Laws 2004 , SB 1511, c. 255, § 53, eff. 11/1/2004; Amended by Laws 2008 , SB 1043, c. 253, § 30(effective date amended to January 1, 2010, by Laws 2008 , SB 1708, c. 382, § 315; Laws 2008, SB 1708, c. 382 held unconstitutional and void by Weddington v. Henry, 2008 OK 102, 202 P.3d 143).

This section is set out more than once due to postponed, multiple, or conflicting amendments.