Bill Text: HI SB2720 | 2012 | Regular Session | Amended
Bill Title: Nonprofit Corporations; Conversions
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2012-03-08 - (H) Referred to CPC/JUD, referral sheet 41 [SB2720 Detail]
Download: Hawaii-2012-SB2720-Amended.html
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THE SENATE |
S.B. NO. |
2720 |
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TWENTY-SIXTH LEGISLATURE, 2012 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO CONVERSIONS BY NONPROFIT CORPORATIONS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 414D-207, Hawaii Revised Statutes, is repealed.
["§414D-207 Conversions into and
from corporations. (a) A domestic corporation may adopt a plan of
conversion and convert to a foreign corporation or any other business entity
if:
(1) The board of directors and members of
the domestic corporation approve a plan of conversion in the manner prescribed
by section 414D-202 and if the conversion is treated as a merger to which the
converting entity is a party and not the surviving entity;
(2) The conversion is permitted by and
complies with the laws of the state or country in which the converted entity is
to be incorporated, formed, or organized; and the incorporation, formation, or
organization of the converted entity complies with those laws;
(3) At the time the conversion becomes
effective, each member of the converting entity, unless otherwise agreed to by
the member or directors, owns an equity interest or other ownership interest
in, and is a shareholder, partner, member, or other owner of, the converted
entity;
(4) The members of the domestic
corporation, as a result of the conversion, shall not become personally liable
without the members' consent, for the liabilities or obligations of the
converted entity; and
(5) The converted entity is incorporated,
formed, or organized as part of or pursuant to the plan of conversion.
(b) Any foreign corporation or other
business entity may adopt a plan of conversion and convert to a domestic
corporation if the conversion is permitted by and complies with the laws of the
state or country in which the foreign corporation or other business entity is
incorporated, formed, or organized.
(c) A plan of conversion shall set forth:
(1) The name of the converting entity and
the converted entity;
(2) A statement that the converting entity
is continuing its existence in the organizational form of the converted entity;
(3) A statement describing the
organizational form of the converted entity and the state or country under the
laws of which the converted entity is to be incorporated, formed, or organized;
and
(4) The manner and basis of converting the
shares or other forms of ownership, of the converting entity into shares or
other forms of ownership, of the converted entity, or any combination thereof.
(d) A plan of conversion may set forth any
other provisions relating to the conversion that are not prohibited by law,
including without limitation the initial bylaws and officers of the converted
entity.
(e) After the conversion of a domestic
corporation is approved, and at any time before the conversion becomes
effective, the plan of conversion may be abandoned by the domestic corporation
in accordance with the procedures set forth in the plan of conversion or, if
these procedures are not provided in the plan, in the manner determined by the
board of directors. If articles of conversion have been filed with the
department director but the conversion has not become effective, the conversion
may be abandoned if a statement, executed on behalf of the converting entity by
an officer or other duly authorized representative and stating that the plan of
conversion has been abandoned in accordance with applicable law, is filed with
the department director prior to the effective date of the conversion. If the
department director finds that the statement satisfies the requirements
provided by law, the department director, after all fees have been paid, shall:
(1) Stamp the statement and include the
date of the filing;
(2) File the document in the department
director's office; and
(3) Issue a certificate of abandonment to
the converting entity or its authorized representatives.
(f) Once the statement provided in
subsection (e) is filed with the department director, the conversion shall be
deemed abandoned and shall not be effective."]
SECTION 2. Section 414D-208, Hawaii Revised Statutes, is repealed.
["§414D-208 Articles of conversion.
(a) If a plan of conversion has been approved in accordance with
section 414D‑202 and has not been abandoned, articles of conversion shall
be executed by an officer or other duly authorized representative of the
converting entity and shall set forth:
(1) A statement certifying the following:
(A) The name, form of entity, and
state or country of incorporation, formation, or organization of the converting
and converted entities;
(B) That a plan of conversion has
been approved;
(C) That an executed plan of
conversion is on file at the principal place of business of the converting
entity and stating the address thereof; and
(D) That a copy of the plan of
conversion shall be furnished by the converting entity prior to the conversion
or by the converted entity after the conversion on written request and without
cost, to any member or director, as the case may be, of the converting entity
or the converted entity; and
(2) If the converting entity is a domestic
or foreign corporation or other entity, a statement that the approval of the
plan of conversion was duly authorized and complied with the laws under which
it was incorporated, formed, or organized.
(b) The articles of conversion shall be
delivered to the department director. The converted entity, if a domestic
corporation, domestic professional corporation, domestic nonprofit corporation,
domestic general partnership, domestic limited partnership, or domestic limited
liability company shall attach a copy of its respective registration documents
with the articles of conversion.
(c) If the department director finds that
the articles of conversion satisfy the requirements provided by law, and that
all required documents are filed, the department director, after all fees have
been paid shall:
(1) Stamp the articles of conversion and
include the date of the filing;
(2) File the document in the department
director's office; and
(3) Issue a certificate of conversion to
the converted entity or its authorized representatives."]
SECTION 3. Section 414D-210, Hawaii Revised Statutes, is repealed.
["§414D-210 Effect of conversion. When
a conversion becomes effective:
(1) The converting entity shall continue to
exist without interruption, but in the organizational form of the converted
entity;
(2) All rights, title, and interest in all
real estate and other property owned by the converting entity shall
automatically be owned by the converted entity without reversion or impairment,
subject to any existing liens or other encumbrances;
(3) All liabilities and obligations of the
converting entity shall automatically be liabilities and obligations of the
converted entity without impairment or diminution due to the conversion;
(4) The rights of creditors of the
converting entity shall continue against the converted entity and shall not be
impaired or extinguished by the conversion;
(5) Any action or proceeding pending by or
against the converting entity may be continued by or against the converted
entity without any need for substitution of parties;
(6) The shares and other forms of ownership
in the converting entity that are to be converted into shares, or other forms
of ownership, in the converted entity as provided in the plan of conversion
shall be converted;
(7) A shareholder, partner, member, or
other owner of the converted entity shall be liable for the debts and
obligations of the converting entity that existed before the conversion takes
effect; provided that the shareholder, partner, member, or other owner:
(A) Agreed in writing to be liable
for the debts or obligations;
(B) Was liable under applicable law
prior to the effective date of the conversion for the debts or obligations; or
(C) Becomes liable under applicable
law for existing debts and obligations of the converted entity by becoming a
shareholder, partner, member, or other owner of the converted entity.
(8) If the converted entity is a foreign
corporation or other business entity incorporated, formed, or organized under a
law other than the law of this State, the converted entity shall file with the
director:
(A) An agreement that the converted
entity may be served with process in this State in any action or proceeding for
the enforcement of any liability or obligation of the converting domestic
corporation;
(B) An irrevocable appointment of a
resident of this State, including the street address, as its agent to accept
service of process in any such proceeding; and
(C) An agreement for the
enforcement, as provided in this chapter, of the right of any dissenting
shareholder, partner, member, or other owner to receive payment for their
interest against the converted entity."]
SECTION 4. Statutory material to be repealed is bracketed and stricken.
SECTION 5. This Act shall take effect on July 1, 2050.
Report Title:
Nonprofit Corporations; Conversions
Description:
Repeals provisions regarding conversions by nonprofit corporations. Effective 07/01/50. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
