Title 13.1. Corporations
Chapter 10. Virginia Nonstock Corporation Act
Article 11.2. Conversions.
§ 13.1-898.10. (Effective January 1, 2027) Plan of conversion.A. A domestic corporation may convert to a domestic or foreign eligible entity, or a domestic eligible entity may convert to a domestic corporation, under this article by approving a plan of conversion. The plan of conversion shall include:
1. The name of the converting corporation;
2. The name, jurisdiction of formation, and type of entity of the converted entity;
3. The manner and basis of converting the membership interests and any rights to acquire membership interests of the domestic corporation into eligible interests or other securities, obligations, rights to acquire eligible interests or other securities, cash, other property, or any combination of the foregoing;
4. If the converted entity will be a domestic corporation, (i) the proposed articles of incorporation of the converted entity that satisfy the requirements of § 13.1-819 and (ii) the proposed bylaws of the converted entity, which shall not be included with the articles of conversion delivered to the Commission for filing;
5. If the converted entity will be a domestic eligible entity and a filing entity, the full text, as it will be in effect immediately after the conversion becomes effective, of the organic rules of the converted entity, including the public organic record that satisfies the requirements of § 13.1-619, 13.1-1101, 13.1-1212 or 50-73.11, as the case may be, provided that the private organic rules shall not be included with the articles of conversion delivered to the Commission for filing;
6. If the converted entity will be a foreign corporation or eligible entity, the plan of conversion may include the organic rules of the converted entity provided that the organic rules shall not be included with the articles of conversion delivered to the Commission for filing; and
7. The other terms and conditions of the conversion.
B. In addition to the requirements of subsection A, a plan of conversion may contain any other provision not prohibited by law.
C. The terms of a plan of conversion may be made dependent upon facts objectively ascertainable outside the plan in accordance with subsection K of § 13.1-804.
§ 13.1-898.11. (Effective January 1, 2027) Action on plan of conversion.A. A. In the case of a conversion of a domestic corporation to a domestic or foreign eligible entity, the plan of conversion shall be adopted in the following manner:
1. The plan of conversion shall first be adopted by board of directors.
2. After adopting the plan of conversion, the board of directors shall submit the plan to the members entitled to vote for their approval. In submitting the plan of conversion to the members for their approval, the board of directors shall recommend that the members approve the plan unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors shall inform the members of the basis for that determination.
3. The board of directors may set conditions for approval of the plan of conversion by the members or the effectiveness of the plan of conversion.
4. If the approval of the members is to be sought at a members meeting, the corporation shall notify each member, regardless of whether entitled to vote, of the meeting of members at which the plan of conversion is to be submitted for approval. The notice shall state that the purpose, or one of the purposes, of the meeting is to consider the plan of conversion and shall contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the organic rules of the converted entity, which are to be in writing as they will be in effect immediately after the conversion.
5. Unless the articles of incorporation or the bylaws provide otherwise, or the board of directors, acting pursuant to subdivision 3, requires a greater vote, approval of the plan of conversion requires (i) the approval of the members entitled to vote at a meeting at which a quorum exists consisting of more than two-thirds of the votes entitled to be cast on the plan and (ii) the approval of each class of members entitled to vote voting as a separate voting group at a meeting at which a quorum of the voting group exists consisting of more than two-thirds of the votes entitled to be cast on the plan by that voting group. The articles of incorporation or the bylaws may provide for a greater or lesser vote than that provided in this subsection or a vote by separate voting groups so long as the vote provided for is not less than a majority of all votes cast on the plan by each voting group entitled to vote on the plan at a meeting at which a quorum of the voting group exists.
B. If as a result of the conversion one or more members of the converting domestic corporation would become subject to interest holder liability, approval of the plan of conversion shall require the signing in connection with the transaction, by each such member, of a separate written consent to become subject to such interest holder liability.
C. When a domestic corporation has no members, or no members having the right to vote, a plan of conversion shall be adopted by the board of directors of such corporation.
§ 13.1-898.12. (Effective January 1, 2027) Articles of conversion; effectiveness.A. After (i) a plan of conversion of a domestic corporation has been adopted and approved as required by this article or (ii) a domestic or foreign eligible entity that is the converting entity has approved a conversion as required under its organic law, articles of conversion shall be signed in the name of the converting entity. The articles of conversion shall set forth:
1. The name of the converting entity, its jurisdiction of formation, and entity type;
2. The original name, date of formation, jurisdiction of formation, and entity type, of the converted entity and its name, jurisdiction of formation, and entity type upon each subsequent domestication or conversion;
3. If the converting entity is a domestic corporation:
a. The plan of conversion;
b. The date the plan of conversion was approved; and
c. A statement that the plan of conversion was approved in accordance with this chapter;
4. If the converted entity is a foreign eligible entity:
a. A statement that the corporation revokes the authority of its registered agent to accept service on its behalf and appoints the clerk of the Commission as an agent for service of process in any proceeding based on a cause of action arising during the time it was incorporated in the Commonwealth;
b. A mailing address to which the clerk may mail a copy of any process served on the clerk under subdivision a; and
c. A commitment by the converting entity to notify the clerk of the Commission in the future of any change in its mailing address after the conversion becomes effective;
5. If the converting entity is a foreign eligible entity and the converted entity is a domestic corporation, a statement that the conversion is permitted by and was approved in accordance with the organic law of the foreign eligible entity; and
6. If the converting entity is a domestic stock corporation, limited partnership, partnership, or business trust and the converted entity is a domestic corporation:
a. The plan of conversion;
b. The date the plan of conversion was approved; and
c. A statement that the plan of conversion was approved in accordance with this chapter.
B. The articles of conversion shall be delivered to the Commission for filing. If the Commission finds that the articles of conversion comply with the requirements of law and that all required fees have been paid, it shall issue a certificate of conversion.
C. Articles of conversion under this section may be combined with any required conversion filing under the organic law of a domestic eligible entity or a foreign eligible entity that is authorized or registered to transact business in the Commonwealth that is the converting entity or converted entity if the combined filing satisfies the requirements of both this section and the other organic law.
D. If the converting entity is a foreign eligible entity that is authorized or registered to transact business in the Commonwealth, then its certificate of authority or registration shall be deemed withdrawn on the effective date of its conversion.
§ 13.1-898.13. (Effective January 1, 2027) Amendment of plan of conversion; abandonment.A. A plan of conversion of a converting entity that is a domestic corporation 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. In the manner provided in the plan, except that members that were entitled to vote on or consent to approval of the plan are entitled to vote on or consent to any amendment of the plan that will change:
a. The amount or kind of eligible interests or other securities, obligations, rights to acquire eligible interests or other securities, cash, other property, or any combination of the foregoing, to be received by any of the members of the converting corporation under the plan;
b. The 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 eligible 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 such members in any material respect.
B. Unless otherwise provided in the plan of conversion, after the plan of conversion has been approved by a converting entity that is a domestic corporation in the manner required by this article, and at any time before the certificate of conversion has become effective, the plan may be abandoned by the corporation without action by its members in accordance with any procedures set forth in the plan or, if no such procedures are set forth in the plan, in the manner determined by the board of directors.
C. If a conversion is abandoned after articles of conversion have been filed with the Commission but before the certificate of conversion has become effective, a statement of abandonment shall be signed on behalf of the converting domestic corporation or foreign eligible entity and delivered to the Commission for filing prior to the effective time and date of the certificate of conversion. If the Commission finds that the statement of abandonment complies with the requirements of law, it shall issue a certificate of abandonment, effective as of the date and time the statement of abandonment was received by the Commission, and the conversion shall be deemed abandoned and shall not become effective.
D. The statement of abandonment shall contain:
1. The name of the converting entity and its jurisdiction of formation and entity type;
2. When the converting entity is a foreign eligible entity, the name of the converted entity set forth in the articles of conversion;
3. The date on which the articles of conversion were filed with the Commission;
4. The date and time on which the Commission's certificate of conversion becomes effective; and
5. A statement that the conversion is being abandoned in accordance with this section or, when the converting corporation is a foreign eligible entity, a statement that the foreign eligible entity abandoned the conversion as required by its organic law.
§ 13.1-898.14. (Effective January 1, 2027) Effect of conversion.A. When a conversion becomes effective:
1. All property owned by, and every contract right possessed by, the converting entity remains the property and contract rights of the converted entity without reversion or impairment;
2. All debts, obligations, and other liabilities of the converting entity remain the debts, obligations, and other liabilities of the converted entity;
3. The name of the converted entity may, but need not, be substituted for the name of the converting entity in any pending action or proceeding;
4. If the converted entity is a filing entity or a domestic corporation or a domestic or foreign stock corporation, its public organic record and its private organic rules become effective;
5. If the converted entity is not a filing entity, its private organic rules become effective;
6. If the converted entity is a registered limited liability partnership, the filing required to become a registered limited liability partnership and its private organic rules become effective;
7. The membership interests or eligible interests of the converting entity are reclassified into shares, eligible interests, or other securities, obligations, rights to acquire shares, eligible interests or other securities, cash, or other property in accordance with the terms of the conversion, and the members or interest holders of the converting entity are entitled only to the rights provided to them by those terms and to any appraisal rights they may have under the organic law of the converting entity;
8. The converted entity is:
a. Incorporated or organized under and subject to the organic law of the converted entity;
b. The same entity without interruption as the converting entity; and
c. Deemed to have been incorporated or otherwise organized on the date that the converting entity was originally incorporated, or organized;
B. Except as otherwise provided in the articles of incorporation or the bylaws of a domestic corporation or the organic law or organic rules of a foreign corporation or a domestic or a foreign eligible entity, a member or eligible interest holder who becomes subject to interest holder liability in respect of a domestic corporation or eligible entity as a result of the conversion shall have such interest holder liability only in respect of interest holder liabilities that arise after the conversion becomes effective.
C. Except as otherwise provided in the organic law or the organic rules of the eligible entity, the interest holder liability of an interest holder in a converting eligible entity that converts to a domestic corporation who had interest holder liability in respect of such converting eligible entity before the conversion becomes effective shall be as follows:
1. The conversion does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the conversion became effective.
2. The provisions of the organic law of the eligible entity shall continue to apply to the collection or discharge of any interest holder liabilities preserved by subdivision 1, as if the conversion had not occurred.
3. The eligible interest holder shall have such rights of contribution from other persons as are provided by the organic law of the eligible entity with respect to any interest holder liabilities preserved by subdivision 1, as if the conversion had not occurred.
4. The eligible interest holder shall not, by reason of such prior interest holder liability, have interest holder liability with respect to any interest holder liabilities that arise after the conversion becomes effective.
D. A conversion does not require the converting entity to wind up its affairs and does not constitute or cause the dissolution, termination, or cancellation of the entity.
E. Upon a conversion becoming effective, a foreign corporation or foreign eligible entity that is the survivor of a conversion is deemed to appoint the clerk of the Commission as its agent for service of process in a proceeding to enforce the rights of members of each domestic corporation that is a party to the conversion.
F. A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to the converting entity and that takes effect or remains payable after the conversion inures to the converted entity.
G. A trust obligation that would govern property if transferred to the converting entity applies to property that is transferred to the converted entity after the conversion takes effect.
§ 13.1-898.8. (Effective January 1, 2027) Definitions.As used in this article, unless the context requires a different meaning:
"Conversion" means a transaction pursuant to this article.
"Converted entity" means the converting entity as it continues in existence after a conversion.
"Converting entity" means the domestic corporation or eligible entity that approves a plan of conversion pursuant to § 13.1-898.10 or the foreign eligible entity that approves a conversion pursuant to the organic law of the foreign eligible entity.
§ 13.1-898.9. (Effective January 1, 2027) Conversion.A. By complying with this article, a domestic corporation may become (i) a domestic eligible entity or (ii) a foreign eligible entity if the conversion is permitted by the organic law of the foreign entity.
B. By complying with this article and applicable provisions of its organic law, a domestic eligible entity may become a domestic corporation. If procedures for the approval of a conversion are not provided by the organic law or organic rules of a domestic eligible entity, the conversion shall be adopted and approved in the same manner as a merger of that eligible entity. If the organic law or organic rules of a domestic eligible entity do not provide procedures for the approval of either a conversion or a merger, a plan of conversion may nonetheless be adopted and approved by the unanimous consent of all the interest holders of such eligible entity. In either such case, the conversion thereafter may be effected as provided in the other provisions of this article, and for purposes of applying this article in such a case:
1. The eligible entity, its members or interest holders, eligible interests, and organic rules taken together shall be deemed to be a domestic corporation, members, eligible interests, and articles of incorporation and bylaws, respectively and vice versa, as the context may require; and
2. If the business and affairs of the eligible entity are managed by persons that are not identical to the members or interest holders, such persons shall be deemed to be the board of directors.
C. By complying with the provisions of this article applicable to foreign entities, a foreign eligible entity may become a domestic corporation if the organic law of the foreign eligible entity permits it to become a corporation in another jurisdiction and it has complied with said law in effecting the conversion.
D. Unless otherwise provided for in Chapter 2.2 (§ 50-73.79 et seq.) of Title 50, a domestic partnership that has filed either a statement of partnership authority or a statement of registration as a registered limited liability partnership with the Commission that is not canceled may become a domestic corporation pursuant to a plan of conversion that is approved by the domestic partnership in accordance with the provisions of this article.