Virginia Law

Article 15. Conversion.

As used in this article:

"Articles of incorporation" has the same meaning as specified in § 13.1-603.

"Articles of trust" has the same meaning as specified in § 13.1-1201.

"Certificate of limited partnership" has the same meaning as specified in § 50-73.1.

"Converting entity" means the domestic limited liability company, partnership, or limited partnership that adopts a plan of entity conversion pursuant to this article.

"Partnership agreement," as to a limited partnership, has the same meaning as specified in § 50-73.1, and, as to a partnership, has the same meaning as specified in § 50-73.79.

"Resulting entity" means the domestic stock corporation, business trust, or limited liability company that is in existence upon consummation of an entity conversion pursuant to this article.

"Stock corporation" has the same meaning as "domestic corporation" as specified in § 13.1-603.

2016, c. 288.

A. A domestic limited liability company may become a domestic stock corporation or a domestic business trust pursuant to a plan of entity conversion that is approved by the limited liability company in accordance with the provisions of this article.

B. A domestic stock corporation may become a domestic limited liability company pursuant to a plan of entity conversion that is adopted and approved by the corporation in accordance with the provisions of Article 12.2 (§ 13.1-722.8 et seq.) of Chapter 9.

C. A domestic nonstock corporation may become a domestic limited liability company pursuant to a plan of entity conversion that is adopted and approved by the corporation in accordance with the provisions of Article 17.1 (§ 13.1-944.1 et seq.) of Chapter 10.

D. A domestic business trust may become a domestic limited liability company pursuant to a plan of entity conversion that is approved by the business trust in accordance with the provisions of Article 12 (§ 13.1-1264 et seq.) of Chapter 14.

E. 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 limited liability company pursuant to a plan of entity conversion that is approved by the domestic partnership in accordance with the provisions of this article.

F. Unless otherwise provided for in Chapter 2.1 (§ 50-73.1 et seq.) of Title 50, a domestic limited partnership that has filed a certificate of limited partnership with the Commission that is not canceled may become a domestic limited liability company pursuant to a plan of entity conversion that is approved by the domestic limited partnership in accordance with the provisions of this article.

2016, c. 288.

A. In the case of a domestic limited liability company that is a converting entity:

1. The limited liability company shall approve a plan of entity conversion setting forth:

a. A statement of the limited liability company's intention to convert to a domestic stock corporation or business trust;

b. The terms and conditions of the conversion, including the manner and basis of converting the membership interests of the limited liability company into shares of the stock corporation or beneficial interests of the business trust, preserving the ownership proportion and relative rights, preferences, and limitations of each membership interest of the converting entity;

c. As an attachment to the plan, the full text of the articles of incorporation or articles of trust of the converting entity as they will be in effect upon consummation of the conversion; and

d. Any other provision relating to the conversion that may be desired.

2. The plan of entity conversion may also include a provision that the plan may be amended before the effective time and date of the certificate of entity conversion. An amendment made after the submission of the plan to the members shall not alter or change any of the terms or conditions of the plan if the change would adversely affect the membership interests of the converting entity, unless the amendment has been approved by the members in the manner set forth in § 13.1-1084.

B. In the case of a domestic partnership or limited partnership that is a converting entity:

1. The partnership or limited partnership shall approve a plan of entity conversion setting forth:

a. A statement of the partnership's or limited partnership's intention to convert to a domestic limited liability company;

b. The terms and conditions of the conversion, including the manner and basis of converting the partnership interests of the partnership or limited partnership into membership interests of the limited liability company, preserving the ownership proportion and relative rights, preferences, and limitations of each partnership interest;

c. As an attachment to the plan, the full text of the articles of organization of the resulting entity as they will be in effect upon consummation of the conversion; and

d. Any other provision relating to the conversion that may be desired.

2. The plan of entity conversion may also include a provision that the plan of entity conversion may be amended before the effective time and date of the certificate of entity conversion. An amendment made after the submission of the plan:

a. To the partners of a partnership shall not alter or change any of the terms or conditions of the plan if the change would adversely affect the partnership interests of the partnership, unless the amendment is approved by the partners in the manner set forth in § 13.1-1084; and

b. To the partners of a limited partnership shall not alter or change any of the terms or conditions of the plan if the change would adversely affect the partnership interests of the limited partnership, unless the amendment is approved by the partners in the manner set forth in § 13.1-1084.

2016, c. 288.

A. In the case of a domestic limited liability company that is the converting entity:

1. If the limited liability company has members, unless the articles of organization or a written operating agreement of the limited liability company provides otherwise, the members shall approve the plan of entity conversion in the manner provided in the limited liability company's operating agreement for amendments to the operating agreement by the members or, if no provision is made in the operating agreement, by all the members; and

2. If the limited liability company has been formed without any members and no members have been admitted, the plan of entity conversion shall be approved by a majority of the persons named as a manager in the articles of organization or, if there are no members or managers, by a majority of the organizers of the limited liability company.

B. In the case of a partnership that is a converting entity, unless a written partnership agreement of the partnership provides otherwise, the plan of entity conversion shall be approved by the partners of the partnership in the manner provided in a written partnership agreement for amendments to the partnership agreement by the partners or, if no provision is made in the partnership agreement, by all the partners.

C. In the case of a limited partnership that is a converting entity, unless the certificate of limited partnership or a written partnership agreement of the limited partnership provides otherwise, the plan of entity conversion shall be approved by the partners of the limited partnership in the manner provided in a written partnership agreement for amendments to the partnership agreement by the partners or, if no provision is made in the partnership agreement, by all the partners.

2016, c. 288.

A. After the conversion of a domestic limited liability company into a domestic stock corporation or business trust has been approved as required by this article, the converting entity shall deliver to the Commission for filing articles of entity conversion setting forth:

1. The name of the domestic limited liability company immediately before the filing of the articles of entity conversion and the name of the converting entity upon its conversion to a domestic stock corporation or business trust, which shall satisfy the requirements of § 13.1-630 or 13.1-1214, as the case may be;

2. The date on which the converting entity was originally organized, formed, or incorporated, and its original name, entity type, and jurisdiction of organization, formation, or incorporation, and, for each subsequent change of entity type or jurisdiction of organization, formation, or incorporation made before the filing of the articles of entity conversion, the effective date of the change and the converting entity's name, entity type, and jurisdiction of organization, formation, or incorporation upon consummation of the change;

3. The plan of entity conversion, including the full text of the articles of incorporation or articles of trust of the resulting entity that comply with the requirements of Chapter 9 (§ 13.1-601 et seq.) or Chapter 14 (§ 13.1-1200 et seq.), as they will be in effect upon consummation of the conversion;

4. The date the plan of entity conversion was approved; and

5. A statement that the plan of entity conversion was adopted by the limited liability company in accordance with § 13.1-1084.

B. After the conversion of a domestic partnership or limited partnership into a domestic limited liability company has been approved as required by this article, the converting entity shall deliver to the Commission for filing articles of entity conversion setting forth:

1. The name of the domestic partnership or limited partnership immediately before the filing of the articles of entity conversion and the name of the converting entity upon its conversion to a domestic limited liability company, which shall satisfy the requirements of this chapter;

2. The date on which the converting entity was originally organized, formed, or incorporated, and its original name, entity type, and jurisdiction of organization, formation, or incorporation, and, for each subsequent change of entity type or jurisdiction of organization, formation, or incorporation made before the filing of the articles of entity conversion, the effective date of the change and the converting entity's name, entity type, and jurisdiction of organization, formation, or incorporation upon consummation of the change;

3. The plan of entity conversion, including the full text of the articles of organization of the resulting entity that comply with the requirements of this chapter as they will be in effect upon consummation of the conversion;

4. The date the plan of entity conversion was approved; and

5. A statement that the plan of entity conversion was adopted by the partnership or limited partnership in accordance with § 13.1-1084.

C. If the Commission finds that the articles of entity conversion comply with the requirements of law and that all required fees have been paid, it shall issue a certificate of entity conversion.

2016, c. 288.

A. When an entity conversion under this article becomes effective, with respect to that entity:

1. The title to all real estate and other property remains in the resulting entity without reversion or impairment;

2. The liabilities of the converting entity remain the liabilities of the resulting entity; and

3. A proceeding pending may be continued by or against the resulting entity as if the conversion did not occur.

B. When the resulting entity is a domestic stock corporation or business trust:

1. The articles of incorporation or articles of trust attached to the articles of entity conversion constitute the articles of incorporation or articles of trust of the resulting entity;

2. The interests of the converting entity are reclassified into shares or beneficial interests of the resulting entity in accordance with the plan of entity conversion; and the members of the converting entity are entitled only to the rights provided in the plan of entity conversion;

3. The resulting entity is deemed to:

a. Be a domestic stock corporation or business trust, as the case may be, for all purposes;

b. Be the same stock corporation or business trust without interruption as the converting entity that existed before the conversion; and

c. Have been incorporated or formed on the date that the converting entity was originally incorporated, organized, or formed;

4. The converting entity shall cease to be a limited liability company when the certificate of entity conversion becomes effective; and

5. Any member of a converting entity who, before the conversion, was liable for the liabilities or obligations of the converting entity is not released from those liabilities or obligations by reason of the conversion.

C. When the converting entity is a partnership or a limited partnership:

1. The articles of organization attached to the articles of entity conversion constitute the articles of organization of the resulting entity;

2. The eligible interests of the converting entity are reclassified into membership interests in accordance with the plan of entity conversion; and the partners of the converting entity are entitled only to the rights provided in the plan of entity conversion;

3. The resulting entity is deemed to:

a. Be a domestic limited liability company for all purposes;

b. Be the same limited liability company without interruption as the converting entity that existed before the conversion; and

c. Have been organized on the date that the converting entity was originally formed, organized, or incorporated;

4. The converting entity shall cease to be a partnership or limited partnership when the certificate of entity conversion becomes effective;

5. If the converting entity is a partnership, a statement of partnership authority filed by the partnership that has not been canceled shall be deemed canceled when the certificate of entity conversion becomes effective;

6. If the converting entity is a limited partnership, its certificate of limited partnership shall be deemed canceled when the certificate of entity conversion becomes effective;

7. If the partnership or limited partnership is registered as a registered limited liability partnership, that status shall be deemed canceled when the certificate of entity conversion becomes effective; and

8. Any partner of a converting entity who, before the conversion, was liable for the liabilities or obligations of the converting entity is not released from those liabilities or obligations by reason of the conversion.

2016, c. 288.

A. Unless otherwise provided in the plan of entity conversion, after a plan of entity conversion has been approved by a converting entity in the manner required by this article, and at any time before the certificate of entity conversion has become effective, the plan may be abandoned by the converting entity without action by its members or partners, as the case may be, in accordance with any procedures set forth in the plan or, if no such procedures are set forth in the plan:

1. When the converting entity is a domestic limited liability company, by a vote of the members, managers, or organizers of the limited liability company that is equal to or greater than the vote cast for the plan of entity conversion pursuant to subsection A of § 13.1-1084;

2. When the converting entity is a domestic partnership, by a vote of the partners of the partnership that is equal to or greater than the vote cast for the plan of entity conversion pursuant to subsection B of § 13.1-1084; and

3. When the converting entity is a domestic limited partnership, by a vote of the partners of the limited partnership that is equal to or greater than the vote cast for the plan of entity conversion pursuant to subsection C of § 13.1-1084.

B. If an entity conversion is abandoned after articles of entity conversion have been filed with the Commission but before the certificate of entity conversion has become effective, a statement of abandonment shall be signed on behalf of the converting entity and delivered to the Commission for filing prior to the effective time and date of the certificate of entity 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 entity conversion shall be deemed abandoned and shall not become effective.

C. The statement of abandonment shall contain:

1. The name of the converting entity and its entity type;

2. The name of the resulting entity set forth in the articles of conversion;

3. The date on which the articles of entity conversion were filed with the Commission;

4. The date and time on which the Commission's certificate of entity conversion becomes effective; and

5. A statement that the entity conversion is being abandoned in accordance with this section.

2016, c. 288; 2021, Sp. Sess. I, c. 487.