48-101-808 - Conversion of subsidiary nonprofit corporations. - Tennessee Statutes

48-101-808. Conversion of subsidiary nonprofit corporations.

(a)  A subsidiary nonprofit corporation incorporated in this state may be converted to a domestic nonprofit LLC pursuant to this section.

(b)  The terms and conditions of a conversion of a subsidiary nonprofit corporation to a domestic nonprofit LLC must be approved by the board of directors of the subsidiary nonprofit corporation and the parent nonprofit corporation.

(c)  After the conversion is approved under subsection (b), the converting subsidiary nonprofit corporation shall file with the secretary of state a certificate of conversion that satisfies the requirements of § 48-249-703 and articles of organization that satisfy the requirements of § 48-101-804. The certificate of conversion shall prominently designate the LLC as a nonprofit LLC and shall also include:

     (1)  A statement that the converting subsidiary nonprofit corporation is being converted to a nonprofit LLC;

     (2)  The name of the converting subsidiary nonprofit corporation and the address of its principal office; and

     (3)  A statement that the terms and conditions of the conversion have been approved by the board of directors of the converting subsidiary nonprofit corporation and the parent nonprofit corporation.

(d)  The conversion is effective when the certificate of conversion is filed with the secretary of state or at any future effective date or time specified in the certificate of conversion. The filing of a certificate of conversion with the secretary of state, in compliance with this section, shall constitute and, for purposes of chapter 64 of this title, be deemed to be articles of termination of corporate existence of the subsidiary nonprofit corporation.

(e)  When any conversion of a subsidiary nonprofit corporation to a domestic nonprofit LLC has become effective under this section, for all purposes of the laws of this state:

     (1)  The domestic nonprofit LLC shall be deemed to be the same entity as the converting subsidiary nonprofit corporation;

     (2)  All of the rights, privileges and powers of the converting subsidiary nonprofit corporation, and all property, real, personal and mixed, of and all debts due to the converting subsidiary nonprofit corporation, as well as all other things and causes of action belonging to the converting subsidiary nonprofit corporation, shall be and remain vested in the domestic nonprofit LLC and shall be the property of the domestic nonprofit LLC;

     (3)  Title to any real property vested by deed or otherwise in the converting nonprofit subsidiary corporation shall not revert or be in any way impaired by reason of this section;

     (4)  All rights of creditors and all liens upon any property of the converting subsidiary nonprofit corporation shall be preserved unimpaired;

     (5)  All debts, liabilities, and obligations of the converting subsidiary nonprofit corporation shall remain attached to the domestic nonprofit LLC, and may be enforced against it to the same extent as if the debts, liabilities, and obligations had originally been incurred or contracted by it in its capacity as a domestic nonprofit LLC;

     (6)  Any action or proceeding pending against the converting subsidiary nonprofit corporation may be continued against the domestic nonprofit LLC as if the conversion had not occurred; and

     (7)  The rights, privileges, powers and interests in property of the converting subsidiary nonprofit corporation, as well as the debts, liabilities, and obligations of the converting subsidiary nonprofit corporation, shall not be deemed, as a consequence of the conversion, to have been transferred to the domestic nonprofit LLC for any purpose of the laws of this state.

(f)  The converting subsidiary nonprofit corporation shall not be required to wind up its affairs or to pay its liabilities and distribute its assets, and the conversion of the converting subsidiary nonprofit corporation to the domestic nonprofit LLC shall not be deemed to constitute a dissolution of the converting subsidiary nonprofit corporation.

(g)  The ownership interests or membership of the parent nonprofit corporation in the converting subsidiary nonprofit corporation shall become membership interests in the domestic nonprofit LLC.

[Acts 2006, ch. 620, § 9.]