2016 North Dakota Century Code Title 45 Partnerships Chapter 45-21 Conversions and Mergers
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CHAPTER 45-21
CONVERSIONS AND MERGERS
45-21-01. (901) Definitions - Conversions and mergers.
For the purposes of this chapter, unless the context otherwise requires:
1. "Certificate of creation" means:
a. A certificate of incorporation, if the converted organization is a corporation
deemed to be incorporated under chapter 10-19.1;
b. A certificate of organization, if the converted organization is a limited liability
company deemed to be organized under chapter 10-32.1;
c. A certificate of limited partnership, if the converted organization is a limited
partnership deemed to be formed under chapter 45-10.2;
d. The filed registration, if the converted organization is a limited liability partnership
deemed to be established under chapter 45-22; or
e. A certificate of limited liability limited partnership, if the converted organization is a
limited liability limited partnership deemed to be formed under chapter 45-23.
2. "Constituent organization" means an organization that is party to a merger.
3. "Constituent partnership" means a constituent organization that is a partnership.
4. "Converted organization" means the organization into which a converting organization
converts pursuant to sections 45-21-01 through 45-21-07.1.
5. "Converting organization" means an organization that converts into another
organization pursuant to sections 45-21-01 through 45-21-07.1.
6. "Converting partnership" means a converting organization that is a partnership.
7. "Date of origin" means the date on which:
a. A corporation that is:
(1) The converting organization was incorporated; or
(2) The converted organization is deemed to be incorporated;
b. A limited liability company that is:
(1) The converting organization was organized; or
(2) The converted organization is deemed to be organized;
c. A general partnership that is the converting organization was formed;
d. A general partnership that is the converted organization was formed;
e. A limited partnership that is:
(1) The converting organization was formed; or
(2) The converted organization is deemed to be formed;
f. A limited liability partnership that is:
(1) The converting organization was established; or
(2) The converted organization is deemed to be established; and
g. A limited liability limited partnership that is:
(1) The converting organization was formed; or
(2) The converted organization was deemed to be formed.
8. "Filed registration" means the registration of a limited liability partnership that has been
filed with the secretary of state.
9. "General partner" means a partner in a partnership and a general partner in a limited
partnership.
10. "General partnership" means an organization formed by two or more persons under
chapters 45-13 through 45-21.
11. "Governing statute" means:
a. With respect to a domestic organization, the following chapters of this code which
govern the internal affairs of the organization:
(1) If a corporation, then chapter 10-19.1;
(2) If a limited liability company, then chapter 10-32.1;
(3) If a limited partnership, then chapter 45-10.2;
(4) If a general partnership, then chapters 45-13 through 45-21;
(5) If a limited liability partnership, then chapter 45-22; and
(6) If a limited liability limited partnership, then chapter 45-23; and
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b.
12.
13.
14.
15.
16.
17.
18.
With respect to a foreign organization, the laws of the jurisdiction under which the
organization is created and under which the internal affairs of the organization are
governed.
"Limited partner" means a limited partner in a limited partnership.
"Limited partnership" means a partnership that is formed by two or more persons
under chapter 45-10.2, predecessor law, or comparable law of another jurisdiction and
which has one or more general partners and one or more limited partners.
"Organizational records" means for an organization that is:
a. A corporation, its articles of incorporation and bylaws;
b. A limited liability company, its articles of organization, operating agreement or
bylaws, and any member-control agreement;
c. A limited partnership, its partnership agreement;
d. A general partnership, its partnership agreement;
e. A limited liability partnership, its partnership agreement; or
f. A limited liability limited partnership, its partnership agreement.
"Originating record" means for an organization that is:
a. A corporation, its articles of incorporation;
b. A limited liability company, its articles of organization;
c. A limited partnership, its certificate of limited partnership;
d. A limited liability partnership, its registration; or
e. A limited liability limited partnership, its certificate of limited liability limited
partnership.
"Ownership interest" means for an organization which is:
a. A corporation, its shares;
b. A limited liability company, its membership interests;
c. A limited partnership, its partnership interests;
d. A general partnership, its partnership interests;
e. A limited liability partnership, its partnership interests; or
f. A limited liability limited partnership, its partnership interests.
"Partner" includes both a general partner and a limited partner.
"Surviving organization" means an organization into which one or more other
organizations are merged and which:
a. May pre-exist the merger; or
b. Be created by the merger.
45-21-02. (902) Conversion.
Other organizations may not convert to a partnership. However, a partnership may convert
to another organization pursuant to sections 45-21-01 through 45-21-07.1 and a plan of
conversion, if:
1. The governing statute of the other organization authorizes the conversion;
2. The conversion is not prohibited by the law of the jurisdiction that enacted the
governing statute; and
3. The other organization complies with its governing statute in effecting the conversion.
45-21-02.1. Plan of conversion.
A plan of conversion must be in a record and must include:
1. The name and form of the converting organization before conversion;
2. The name and form of the converted organization after conversion;
3. The terms and conditions of the conversion;
4. The manner and basis for converting each ownership interest in the converting
organization into ownership interests in the converted organization, or in whole or in
part, into money or other property;
5. The organizational records of the converted organization; and
6. Any other provisions with respect to the proposed conversion that are deemed to be
necessary or desirable.
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45-21-03. (903) Plan of conversion approval and amendment.
1. If the converting organization is a partnership, then:
a. A plan of conversion must be consented to by all of the partners of a converting
partnership.
b. Subject to any contractual rights, after a conversion is approved, and at any time
before a filing is made under section 45-21-04, a converting partnership may
amend the plan or abandon the planned conversion:
(1) As provided in the plan; and
(2) Except as prohibited by the plan, by the same consent as was required to
approve the plan.
2. If the converting organization is not a partnership, then the approval and the
amendment of the plan of conversion must comply with the governing statute in
effecting the conversion.
45-21-04. (904) Statement of conversion.
1. Upon receiving the approval required by section 45-21-03, a statement of conversion
must be prepared in a record that must contain:
a. A statement that the converting organization is being converted into another
organization, including:
(1) The name of the converting organization immediately before the filing of the
statement of conversion;
(2) The name to which the name of the converting organization is to be
changed, which must be a name that satisfies the laws applicable to the
converted organization;
(3) The form of organization that the converted organization will be; and
(4) The jurisdiction of the governing statute of the converted organization;
b. A statement that the plan of conversion has been approved by the converting
organization as provided in section 45-21-03;
c. A statement that the plan of conversion has been approved as required by the
governing statute of the converted organization;
d. The plan of conversion without organizational records;
e. A copy of the originating record of the converted organization; and
f. If the converted organization is a foreign organization not authorized to transact
business or conduct activities in this state, then the street and mailing address of
an office which the secretary of state may use for the purposes of subsection 3 of
section 45-21-03.
2. The statement of conversion must be signed on behalf of the converting organization
and filed with the secretary of state.
a. If the converted organization is a domestic organization, then:
(1) The filing of the statement of conversion must also include the filing with the
secretary of state of the originating record of the converted organization.
(2) Upon both the statement of conversion and the originating record of the
converted organization being filed with the secretary of state, the secretary
of state shall issue a certificate of conversion and the appropriate certificate
of creation to the converted organization or its legal representative.
b. If the converted organization is a foreign organization:
(1) That is transacting business or conducting activities in this state, then:
(a) The filing of the statement of conversion must include the filing with
the secretary of state of an application for certificate of authority by the
converted organization.
(b) Upon both the statement of conversion and the application for a
certificate of authority by the converted organization being filed with
the secretary of state, the secretary of state shall issue a certificate of
conversion and the appropriate certificate of authority to the converted
organization or the legal representative.
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(2)
3.
That is not transacting business or conducting activities in this state, then
upon the statement of conversion being filed with the secretary of state, the
secretary of state shall issue the appropriate certificate of conversion to the
converted organization or its legal representative.
A converting organization that is the owner of a trademark or trade name, is a general
partner named in a fictitious name certificate, is a general partner in a limited
partnership or a limited liability limited partnership, or is a managing partner of a
limited liability partnership that is on file with the secretary of state must change or
amend the name of the converting organization to the name of the converted
organization in each registration when filing the statement of conversion.
45-21-04.1. Abandonment of conversion.
1. If the statement of conversion has not been filed with the secretary of state, and:
a. If the converting organization is a partnership, then subject to any contractual
rights, after a conversion is approved, and at any time before the effective date of
the plan, a converting partnership may abandon the planned conversion:
(1) As provided in the plan; and
(2) Except as provided otherwise by the plan, by the same consent as was
required to approve the plan.
b. If the converting organization is not a partnership, then the abandonment of the
plan of conversion must comply with its governing statute.
2. If the statement of conversion has been filed with the secretary of state, but has not
yet become effective, then the converting organization shall file with the secretary of
state articles of abandonment that contain:
a. The name of the converting organization;
b. The provision of this section under which the plan is abandoned; and
c. If the plan is abandoned:
(1) By the consent of all of the partners, then the text of the resolution
abandoning the plan; or
(2) As provided in the plan, then a statement that the plan provides for
abandonment and that all conditions for abandonment set forth in the plan
are met.
45-21-04.2. Effective date of conversion - Effect.
1. A conversion is effective when the filing requirements of subsection 2 of section
45-21-04 have been fulfilled or on a later date specified in the statement of conversion.
2. With respect to the effect of conversion on the converting organization and on the
converted organization:
a. An organization that has been converted as provided in sections 45-21-01
through 45-21-07.1 is for all purposes the same entity that existed before the
conversion.
b. Upon a conversion becoming effective:
(1) If the converted organization is not a partnership, then the converted
organization has all the rights, privileges, immunities, and powers, and is
subject to the duties and liabilities as provided in its governing statute;
(2) All property owned by the converting organization remains vested in the
converted organization;
(3) All debts, liabilities, and other obligations of the converting organization
continue as obligations of the converted organization;
(4) An action or proceeding pending by or against the converting organization
may be continued as if the conversion had not occurred;
(5) Except as otherwise provided by other law, all rights, privileges, immunities,
and powers of the converting organization remain vested in the converted
organization;
(6) Except as otherwise provided in the plan of conversion, the terms and
conditions of the plan of conversion take effect; and
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(7)
3.
4.
5.
Except as otherwise agreed, the conversion does not dissolve a converting
partnership for the purposes of sections 45-20-01 through 45-20-07.
When a conversion becomes effective, each ownership interest in the converting
organization is deemed to be converted into ownership interests in the converted
organization or, in whole or in part, into money or other property to be received under
the plan.
A converted organization that is a foreign organization consents to the jurisdiction of
the courts of this state to enforce any obligations owed by the converting partnership, if
before the conversion the converting partnership was subject to suit in this state on the
obligation.
A converted organization that is a foreign organization and not authorized to transact
business or conduct activities in this state appoints the secretary of state as its agent
for service of process for purposes of enforcing an obligation under this subsection as
provided in section 10-01.1-13.
45-21-04.3. Foreign partnership - Conversion of foreign partnership authorized to
transact business in this state.
If a foreign partnership transacting business in this state converts to another organization
permitted by its governing statute, and the converted organization will continue to transact
business in this state, within thirty days after the conversion becomes effective, the newly
created organization resulting from the conversion shall:
1. File with the secretary of state a certified statement of conversion duly authenticated
by the proper officer of the jurisdiction in which the statutory conversion was effected;
and
2. Shall obtain a certificate of authority or applicable registration in accordance with the
North Dakota governing statute applicable to the converted organization.
45-21-05. (905) Merger of partnerships.
1. Pursuant to a plan of merger approved as provided in subsection 3, a partnership may
be merged with one or more other organizations.
2. The plan of merger must set forth:
a. The name of:
(1) The partnership;
(2) Each other constituent organization proposing to merge; and
(3) The surviving organization into which the other organizations will merge;
b. The status of each partner;
c. The terms and conditions of the merger;
d. The manner and basis of converting the ownership interests of each constituent
organization into ownership interests or obligations of the surviving organization,
or into money or other property in whole or part; and
e. The street address of the principal executive office of the surviving organization.
3. The plan of merger must be approved:
a. In the case of a partnership that is a party to the merger, by all of the partners, or
a number or percentage specified for merger in the partnership agreement; and
b. In the case of a constituent organization other than a partnership that is a party to
the merger, by the vote required for approval of a merger by the governing statute
of the constituent organization in the jurisdiction in which the constituent
organization is organized.
4. After a plan of merger is approved and before the merger takes effect, the plan may be
amended or abandoned as provided in the plan.
5. The merger takes effect on the later of:
a. The approval of the plan of merger by all constituent organizations, as provided in
subsection 3;
b. The filing of all records required by law to be filed as a condition to the
effectiveness of the merger; or
c. Any effective date specified in the plan of merger.
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45-21-06. (906) Effect of merger.
1. When a merger takes effect:
a. The separate existence of each constituent partnership that is a party to the
merger, other than the surviving organization, ceases;
b. All property owned by each of the constituent partnerships vests in the surviving
organization;
c. All obligations of each constituent partnership become the obligations of the
surviving organization; and
d. An action or proceeding pending against a constituent partnership may be
continued as if the merger had not occurred, or the surviving organization may be
substituted as a party to the action or proceeding.
2. The secretary of state of this state is the agent for service of process in an action or
proceeding against a surviving foreign partnership to enforce an obligation of a
partnership that is a constituent organization. The surviving organization shall promptly
notify the secretary of state of the mailing address of its principal executive office and
of any change of address. Upon receipt of process, the secretary of state shall mail a
copy of the process to the surviving foreign partnership as provided in section
10-01.1-13.
3. A general partner of the surviving partnership is liable for:
a. All obligations of a party to the merger for which the general partner was
personally liable before the merger;
b. All other obligations of the surviving organization incurred before the merger by a
constituent organization, but those obligations may be satisfied only out of
property of the surviving organization; and
c. All obligations of the surviving organization incurred after the merger takes effect.
4. If the obligations incurred before the merger by a constituent partnership are not
satisfied out of the property of the surviving organization, then the general partners of
the constituent partnership immediately before the effective date of the merger shall
contribute the amount necessary to satisfy the obligations of the constituent
partnership to the surviving organization, in the manner provided in section 45-20-07.
5. A partner of a constituent partnership who does not receive an ownership interest of
the surviving organization is dissociated from the partnership, of which that partner
was a partner, as of the date the merger takes effect. The surviving organization shall
cause the ownership interest of the partner in the constituent partnership to be
purchased under section 45-19-01 or another statute specifically applicable to that
ownership interest of that partner with respect to a merger. The surviving organization
is bound under section 45-19-02 by an act of a general partner dissociated under this
subsection, and the partner is liable under section 45-19-03 for transactions entered
into by the surviving organization after the merger takes effect.
45-21-07. (907) Statement of merger.
1. After a merger, the surviving organization may file a statement that one or more
partnerships or other constituent organizations have merged into the surviving
organization.
2. A statement of merger must be accompanied by the plan of merger without
organizational records and must contain:
a. The name of:
(1) The partnership;
(2) Each other constituent organization that is a party to the merger; and
(3) The surviving organization into which the other constituent organizations
were merged;
b. The form of organization that the surviving organization will be;
c. The jurisdiction of the governing statute of the surviving organization; and
d. The street address of the principal executive office of the surviving organization
and of an office in this state, if any.
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3.
4.
5.
Except as otherwise provided in subsection 4, for the purposes of section 45-15-02,
property of the surviving organization which before the merger was held in the name of
another party to the merger is property held in the name of the surviving organization
upon filing a statement of merger.
For the purposes of section 45-15-02, real property of the surviving organization which
before the merger was held in the name of another constituent organization is property
held in the name of the surviving organization upon recording a certified copy of the
statement of merger in the office for recording transfers of that real property.
A filed and, if appropriate, recorded statement of merger, signed and declared to be
accurate pursuant to subsection 3 of section 45-13-05, stating the name of a
constituent partnership that is a constituent organization in whose name property was
held before the merger and the name of the surviving organization, but not containing
all of the other information required by subsection 2, operates with respect to the
constituent partnership and the surviving organization to the extent provided in
subsections 3 and 4.
45-21-07.1. Liability of general partner after conversion or merger.
1. A conversion or merger under this chapter does not discharge any liability under
sections 45-15-06, 45-15-07, and 45-15-08 of a person that was a general partner in
or dissociated as a general partner from a converting or constituent partnership, but:
a. The provisions of this chapter pertaining to the collection or discharge of the
liability continue to apply to the liability;
b. For the purposes of applying those provisions, the converted or surviving
organization is deemed to be the converting or constituent partnership; and
c. If a person is required to pay any amount under this subsection, then:
(1) The person has a right of contribution from each other person that was liable
as a general partner under section 45-15-06 when the obligation was
incurred and has not been released from the obligation under section
45-20-06; and
(2) The contribution due from each of those persons is in proportion to the right
to receive distributions in the capacity of general partner in effect for each of
those persons when the obligations were incurred as provided in section
45-20-07.
2. In addition to any other liability provided by law:
a. A person that immediately before a conversion or merger became effective was a
general partner in a converting or constituent partnership is personally liable for
each obligation of the converted or surviving organization arising from a
transaction with a third party after the conversion or merger becomes effective, if,
at the time the third party enters into the transaction, the third party:
(1) Does not have notice of the conversion or merger; and
(2) Reasonably believes that:
(a) The converted or surviving organization or business is the converting
or constituent partnership; and
(b) The person is a general partner in the converting or constituent
partnership; and
b. A person that was dissociated as a general partner from a converting or
constituent partnership before the conversion or merger became effective is
personally liable for each obligation of the converted or surviving organization
arising from a transaction with a third party after the conversion or merger
becomes effective, if at the time the third party enters into the transaction less
than two years have passed since the person dissociated as a general partner
and the third party:
(1) Does not have notice of the dissociation;
(2) Does not have notice of the conversion or merger; and
(3) Reasonably believes that:
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(a)
(b)
The converted or surviving organization or business is the converting
or constituent partnership; and
The person is a general partner in the converting or constituent
partnership.
45-21-08. (908) Nonexclusive.
This chapter is not exclusive. Partnerships or limited partnerships may be converted or
merged in any other manner provided by law.
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