2005 California Corporations Code Sections 15677.1-15677.9 Article 7.4. Conversion

15677.1.  For purposes of this article, the following definitions
shall apply:
   (a) "Converted entity" means the other business entity or foreign
other business entity or foreign limited partnership that results
from a conversion of a domestic limited partnership under this
chapter.
   (b) "Converted limited partnership" means a domestic limited
partnership that results from a conversion of an other business
entity or a foreign other business entity or a foreign limited
partnership pursuant to Section 15677.8.
   (c) "Converting limited partnership" means a domestic limited
partnership that converts to an other business entity or a foreign
other business entity or a foreign limited partnership pursuant to
this chapter.
   (d) "Converting entity" means an other business entity or a
foreign other business entity or a foreign limited partnership that
converts to a domestic limited partnership pursuant to the terms of
Section 15677.8.
15677.2.  (a) A limited partnership may be converted into another
business entity or a foreign other business entity or a foreign
limited partnership pursuant to this article if, (1) pursuant to a
conversion into a domestic or foreign partnership or limited
liability company or into a foreign limited partnership, each of the
partners of the converting limited partnership receives a percentage
interest in the profits and capital of the converted entity equal to
that partner's percentage interest in profits and capital of the
converting limited partnership as of the effective time of the
conversion, and (2) pursuant to a conversion into an other business
entity or foreign other business entity not specified in clause (1)
above, both of the following occur:  (A) each limited partnership
interest of the same class is treated equally with respect to any
distribution of cash, property, rights, interests, or securities of
the converted entity, unless all limited partners of the class
consent, and (B) the nonredeemable limited partnership interests of
the converting limited partnership are converted only into
nonredeemable interests or securities of the converted entity, unless
all holders of the nonredeemable interests consent.
   (b) The conversion of a limited partnership to an other business
entity or a foreign other business entity or a foreign limited
partnership may be effected only if both of the following conditions
are satisfied:
   (1) The law under which the converted entity will exist expressly
permits the formation of that entity pursuant to a conversion.
   (2) The limited partnership complies with all other requirements
of any other law that applies to conversion to the converted entity.
15677.3.  (a) A limited partnership that desires to convert to an
other business entity or a foreign other business entity or a foreign
limited partnership shall approve a plan of conversion.  The plan of
conversion shall state all of the following:
   (1) The terms and conditions of the conversion.
   (2) The place of the organization of the converted entity and of
the converting limited partnership and the name of the converted
entity after conversion.
   (3) The manner of converting the limited and general partnership
interests of each of the partners into shares of, securities of, or
interests in, the converted entity.
   (4) The provisions of the governing documents for the converted
entity, including the partnership agreement, limited liability
company articles of organization and operating agreement, or articles
or certificate of incorporation if the converted entity is a
corporation, to which the holders of interests in the converted
entity are to be bound.
   (5) Any other details or provisions that are required by the laws
under which the converted entity is organized, or that are desired by
the parties.
   (b) The plan of conversion shall be approved by all general
partners of the converting limited partnership and by a majority in
interest of each class of limited partners of the converting limited
partnership, unless a greater or lesser approval is required by the
partnership agreement of the converting limited partnership.
However, if the limited partners of the limited partnership would
become personally liable for any obligations of the converted entity
as a result of the conversion, the plan of conversion shall be
approved by all of the limited partners of the converting limited
partnership, unless the plan of conversion provides that all limited
partners will have dissenters' rights as provided in Article 7.6
(commencing with Section 15679.1).
   (c) Upon the effectiveness of the conversion, all partners of the
converting limited partnership, except those that exercise dissenters'
rights as provided in Article 7.6 (commencing with Section 15679.1),
shall be deemed parties to any governing documents for the converted
entity adopted as part of the plan of conversion, irrespective of
whether or not the partner has executed the plan of conversion or the
governing documents for the converted entity.  Any adoption of
governing documents made pursuant thereto shall be effective at the
effective time or date of the conversion.
   (d) Notwithstanding its prior approval, a plan of conversion may
be amended before the conversion takes effect if the amendment is
approved by all general partners of the converting limited
partnership and, if the amendment changes any of the principal terms
of the plan of conversion, the amendment is approved by the limited
partners of the converting limited partnership in the same manner and
to the same extent as required for the approval of the original plan
of conversion.
   (e) The general partners of a converting limited partnership may,
by unanimous approval at any time before the conversion is effective,
in their discretion, abandon a conversion, without further approval
by the limited partners, subject to the contractual rights of third
parties other than limited partners.
   (f) The converted entity shall keep the plan of conversion at the
principal place of business of the converted entity if the converted
entity is a domestic partnership or foreign other business entity, at
the principal executive office of, or registrar or transfer agent
of, the converted entity, if the converted entity is a domestic
corporation, or at the office at which records are to be kept under
Section 17057 if the converted entity is a domestic limited liability
company.  Upon the request of a partner of a converting limited
partnership, the authorized person on behalf of the converted entity
shall promptly deliver to the partner or the holder of shares,
interests, or other securities, at the expense of the converted
entity, a copy of the plan of conversion.  A waiver by a partner of
the rights provided in this subdivision shall be unenforceable.
15677.4.  (a) A conversion into an other business entity or a
foreign other business entity or a foreign limited partnership shall
become effective upon the earliest date that all of the following
occur:
   (1) The approval of the plan of conversion by the partners of the
converting limited partnership as provided in Section 15677.3.
   (2) The filing of all documents required by law to create the
converted entity, which documents shall also contain a statement of
conversion, if required under Section 15677.6.
   (3) The occurrence of the effective date, if set forth in the plan
of conversion occurs.
   (b) A copy of the statement of partnership authority or articles
of organization complying with Section 15677.6, if applicable, duly
certified by the Secretary of State, is conclusive evidence of the
conversion of the limited partnership.
15677.5.  (a) The conversion of a limited partnership into a foreign
limited partnership or foreign other business entity shall be
required to comply with Section 15677.2.
   (b) If the limited partnership is converting into a foreign
limited partnership or foreign other business entity, those
conversion proceedings shall be in accordance with the laws of the
state or place of organization of the foreign limited partnership or
foreign other business entity and the conversion shall become
effective in accordance with that law.
   (c) (1) To enforce an obligation of a limited partnership that has
converted to a foreign limited partnership or foreign other business
entity, the Secretary of State shall only be the agent for service
of process in an action or proceeding against that converted foreign
entity, if the agent designated for the service of process for that
entity is a natural person and cannot be found with due diligence or
if the agent is a corporation and no person, to whom delivery may be
made, may be located with due diligence, or if no agent has been
designated and if no one of the officers, partners, managers,
members, or agents of that entity may be located after diligent
search, and it is so shown by affidavit to the satisfaction of the
court.  The court then may make an order that service be made by
personal delivery to the Secretary of State or to an assistant or
deputy Secretary of State of two copies of the process together with
two copies of the order, and the order shall set forth an address to
which the process shall be sent by the Secretary of State.  Service
in this manner is deemed complete on the 10th day after delivery of
the process to the Secretary of State.
   (2) Upon receipt of the process and order and the fee set forth in
Section 12206 of the Government Code, the Secretary of State shall
provide notice to that entity of the service of the process by
forwarding by certified mail, return receipt requested, a copy of the
process and order to the address specified in the order.
   (3) The Secretary of State shall keep a record of all process
served upon the Secretary of State and shall record therein the time
of service and the Secretary of State's action with respect thereto.
The certificate of the Secretary of State, under the Secretary of
State's official seal, certifying to the receipt of process, the
providing of notice thereof to that entity, and the forwarding of the
process shall be competent and prima facie evidence of the matters
stated therein.
15677.6.  (a) Upon conversion of a limited partnership one of the
following applies:
   (1) If the limited partnership is converting into a domestic
limited liability company, a statement of conversion shall be
completed on the articles of organization for the converted entity.
   (2) If the limited partnership is converting into a domestic
partnership, a statement of conversion shall be completed on the
statement of partnership authority for the converted entity, or if no
statement of partnership authority is filed, then a certificate of
conversion shall be filed separately.
   (3) If the limited partnership is converting into a domestic
corporation, a statement of conversion shall be completed on the
articles of incorporation for the converted entity.
   (4) If the limited partnership is converting to a foreign limited
partnership or foreign other business entity, a certificate of
conversion shall be filed with the Secretary of State.
   (b) Any certificate or statement of conversion shall be executed
and acknowledged by all general partners, unless a lesser number is
provided in the certificate of limited partnership, and shall set
forth all of the following:
   (1) The name and the Secretary of State's file number of the
converting limited partnership.
   (2) A statement that the principal terms of the plan of conversion
were approved by a vote of the partners, which equaled or exceeded
the vote required under Section 15677.3, specifying each class
entitled to vote and the percentage vote required of each class.
   (3) The form of organization of the converted entity.
   (4) The mailing address of the converted entity's agent for
service of process and the chief executive office of the converted
entity.
   (c) The filing with the Secretary of State of a certificate of
conversion or a statement of partnership authority, articles of
organization, or articles or certificate of incorporation containing
a statement of conversion as set forth in subdivision (a) shall have
the effect of the filing of a certificate of cancellation by the
converting limited partnership and no converting limited partnership
that has made the filing is required to file a certificate of
dissolution or a certificate of cancellation under Section 15623 as a
result of that conversion.
15677.7.  (a) Whenever a limited partnership or other business
entity having any real property in this state converts into a limited
partnership or an other business entity pursuant to the laws of this
state or of the state or place in which the limited partnership or
other business entity was organized, and the laws of the state or
place of organization, including this state, of the converting
limited partnership or other converting entity provide substantially
that the conversion vests in the converted limited partnership or
other converted entity all the real property of the converting
limited partnership or other converting entity, the filing for record
in the office of the county recorder of any county in this state in
which any of the real property of the converting limited partnership
or other converting entity is located of either (1) a certificate of
conversion or statement of partnership authority, a certificate of
limited partnership, articles of incorporation, or articles of
organization complying with Section 15677.6, in the form prescribed
and certified by the Secretary of State, or (2) a copy of a
certificate of conversion or a statement of partnership authority,
certificate of limited partnership, articles of organization,
articles or certificate of incorporation, or other certificate or
document evidencing the creation of a foreign other business entity
or foreign limited partnership by conversion, containing a statement
of conversion, certified by the Secretary of State or an authorized
public official of the state or place pursuant to the laws of which
the conversion is effected, shall evidence record ownership in the
converted limited partnership or other converted entity of all
interest of the converting limited partnership or other converting
entity in and to the real property located in that county.
   (b) A filed and, if appropriate, recorded certificate of
conversion or a statement of partnership authority, certificate of
limited partnership, articles of organization, articles or
certificate of incorporation, or other certificate evidencing the
creation of a foreign other business entity or foreign limited
partnership by conversion, containing a statement of conversion,
filed pursuant to subdivision (a) of Section 15677.6, stating the
name of the converting limited partnership or other converting entity
in whose name property was held before the conversion and the name
of the converted entity or converted limited partnership, but not
containing all of the other information required by Section 15677.6,
operates with respect to the entities named to the extent provided in
subdivision (a).
   (c) Recording of a certificate of conversion, or a statement of
partnership authority, certificate of limited partnership, articles
of organization, articles or certificate of incorporation, or other
certificate evidencing the creation of an other business entity or a
limited partnership by conversion, containing a statement of
conversion, in accordance with subdivision (a), shall create, in
favor of bona fide purchasers or encumbrances for value, a conclusive
presumption that the conversion was validly completed.
15677.8.  (a) An other business entity or a foreign other business
entity or a foreign limited partnership may be converted to a
domestic limited partnership pursuant to this article only if the
converting entity is authorized by the laws under which it is
organized to effect the conversion.
   (b) An other business entity or a foreign other business entity or
a foreign limited partnership that desires to convert into a
domestic limited partnership shall approve a plan of conversion or an
other instrument as is required to be approved to effect the
conversion pursuant to the laws under which that entity is organized.
   (c) The conversion of an other business entity or a foreign other
business entity or a foreign limited partnership into a domestic
limited partnership shall be approved by the number or percentage of
the partners, members, shareholders, or holders of interest of the
converting entity as is required by the laws under which that entity
is organized, or a greater or lesser percentage, subject to
applicable laws, as set forth in the converting entity's partnership
agreement, articles of organization, operating agreement, articles or
certificate of incorporation, or other governing document.
   (d) The conversion by an other business entity or a foreign other
business entity or a foreign limited partnership into a domestic
limited partnership shall be effective under this article at the time
the conversion is effective under the laws under which the
converting entity is organized as long as a certificate of limited
partnership containing a statement of conversion has been filed with
the Secretary of State.  If the converting entity's governing law is
silent as to the effectiveness of the conversion, the conversion
shall be effective upon the completion of all acts required under
this title to form a limited partnership.
   (e) The filing with the Secretary of State of a certificate of
conversion or a certificate of limited partnership containing a
statement of conversion pursuant to subdivision (a) shall have the
effect of the filing of a certificate of cancellation by the
converting foreign limited partnership or foreign limited liability
company and no converting foreign limited partnership or foreign
limited liability company that has made the filing is required to
file a certificate of cancellation under Section 15696 or 17455 as a
result of that conversion.  If a converting other business entity is
a foreign corporation qualified to transact business in this state,
the foreign corporation shall, by virtue of the filing, automatically
surrender its right to transact intrastate business.
15677.9.  (a) An entity that converts into another entity pursuant
to this article is for all purposes the same entity that existed
before the conversion.
   (b) Upon a conversion taking effect, all of the following apply:
   (1) All the rights and property, whether real, personal, or mixed,
of the converting entity or converting limited partnership are
vested in the converted entity or converted limited partnership.
   (2) All debts, liabilities, and obligations of the converting
entity or converting limited partnership continue as debts,
liabilities, and obligations of the converted entity or converted
limited partnership.
   (3) All rights of creditors and liens upon the property of the
converting entity or converting limited partnership shall be
preserved unimpaired and remain enforceable against the converted
entity or converted limited partnership to the same extent as against
the converting entity or converting limited partnership as if the
conversion had not occurred.
   (4) Any action or proceeding pending by or against the converting
entity or converting limited partnership may be continued against the
converted entity or converted limited partnership as if the
conversion had not occurred.
   (c) A partner of a converting limited partnership is liable for:
   (1) All obligations of the converting limited partnership for
which the partner was personally liable before the conversion.
   (2) All obligations of the converted entity incurred after the
conversion takes effect, but those obligations may be satisfied only
out of property of the entity if that partner is a limited partner,
or a shareholder in a corporation, or unless expressly provided
otherwise in the articles of organization or other governing
documents, a member of a limited liability company, or a holder of
equity securities in an other converted entity if the holders of
equity securities in that entity are not personally liable for the
obligations of that entity under the law under which the entity is
organized or its governing documents.
   (d) A partner of a converted limited partnership remains liable
for any and all obligations of the converting entity for which the
partner was personally liable before the conversion, but only to the
extent that the partner was liable for the obligations of the
converting entity prior to the conversion.
   (e) If the other party to a transaction with the limited
partnership reasonably believes when entering the transaction that
the limited partner is a general partner, the limited partner is
liable for an obligation incurred by the limited partnership within
90 days after the conversion takes effect.  The limited partner's
liability for all other obligations of the limited partnership
incurred after the conversion takes effect is that of a limited
partner.