SB566: Bill Text

SB566,317,25 181.1162 (title) Plan of conversion.

SB566,549 Section 549. 181.1162 (1) (e) and (f) of the statutes are created to read:

SB566,318,3 181.1162 (1) (e) The organizational documents of the converted entity that are to be in a record immediately after the conversion becomes effective.

SB566,318,4 (f) Any other matters required by the governing law of the converting entity.

SB566,550 Section 550. 181.1162 (2) of the statutes is created to read:

SB566,318,7 181.1162 (2) In addition to the requirements of sub. (1), a plan of conversion may contain any other provision relating to the conversion and not prohibited by law.

SB566,551 Section 551. 181.1163 of the statutes is created to read:

SB566,318,14 181.1163 Approval of conversion; amendment; abandonment. (1) Subject to s. 181.1180, a plan of conversion must be approved in accordance with the procedures that govern a plan of merger under s. 181.1103 for the submission and approval of a plan of conversion with respect to a converting domestic corporation. A plan of conversion into a converted domestic corporation must be approved pursuant to the governing law of the converting entity.

SB566,318,20 (2) Subject to s. 181.1180 and the governing law of each of the converting entity and converted entity, after a plan of conversion is approved, and at any time before a conversion becomes effective, the converting entity may amend the plan of conversion or abandon the conversion as provided in the plan of conversion or, except as otherwise provided in the plan of conversion, with the same vote or consent as was required to approve the plan of conversion.

SB566,319,3 (3) If, after articles of conversion have been delivered to the department for filing and before the conversion becomes effective, the plan of conversion is amended in a manner that requires an amendment to the articles of conversion or if the conversion is abandoned, a statement of amendment or abandonment, signed by the converting entity, must be delivered to the department for filing before the conversion becomes effective. When a statement of abandonment becomes effective, the conversion is abandoned and does not become effective. The statement of amendment or abandonment must contain all of the following:

SB566,319,5 (a) The name of the converting entity and the converted entity under the plan of conversion.

SB566,319,6 (b) The amendment to or abandonment of the articles of conversion.

SB566,319,8 (c) A statement that the amendment or abandonment was approved in accordance with this section.

SB566,552 Section 552. 181.1164 of the statutes is created to read:

SB566,319,13 181.1164 Filings required for conversion; effective date. (1) After the converting entity has approved a plan of conversion in accordance with its governing law, the converting entity shall deliver, or cause to be delivered, to the department for filing articles of conversion setting forth all of the following:

SB566,319,14 (a) The name, type of entity, and governing law of the converting entity.

SB566,319,15 (b) The name, type of entity, and governing law of the converted entity.

SB566,319,17 (c) A statement that the plan of conversion has been approved and adopted by the converting entity in accordance with its governing law.

SB566,319,19 (d) Any organizational documents of the converted entity that are to be in a public record under its governing law.

SB566,319,21 (e) A statement that the plan of conversion is on file at the principal office of the converted entity.

SB566,319,23 (f) A statement that upon request the converted entity will provide a copy of the plan of conversion to any interest holder of the converting entity.

SB566,319,24 (g) A statement whether s. 181.1180 applies to the conversion.

SB566,320,3 (2) In addition to the requirements of sub. (1), the articles of conversion may contain any other provisions relating to the conversion, as determined by the converting entity in accordance with the plan of conversion.

SB566,320,6 (3) If the converted entity is a foreign entity that will be required to register to do business in this state immediately after the conversion and it has not previously registered to do so, it shall so register.

SB566,320,8 (4) A conversion takes effect at the effective date and time of the articles of conversion.

SB566,553 Section 553. 181.1165 of the statutes is created to read:

SB566,320,11 181.1165 Effect of conversion. (1) When a conversion becomes effective, all of the following apply:

SB566,320,15 (a) The converting entity continues its existence in the form of the converted entity and is the same entity that existed before the conversion, except that the converting entity is no longer subject to the governing law that applied prior to the conversion and is subject to the governing law of the converted entity.

SB566,320,17 (am) 1. Except as provided in this paragraph, no interest holder shall have interest holder liability with respect to the converting or converted entity.

SB566,320,24 2. If, under the governing law of the converting entity, one or more of the interest holders thereof had interest holder liability prior to the conversion with respect to the converting entity, such interest holder or holders shall continue to have such liability and any associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the converting entity that accrued during the period or periods in which the interest holder or holders had such interest holder liability.

SB566,321,6 3. If, under the governing law of the converted entity, one or more of the interest holders thereof will have interest holder liability after the conversion with respect to the converted entity, such interest holder or holders will have such liability and any associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the converted entity that accrue after the conversion.

SB566,321,7 4. This paragraph does not affect liability under any taxation laws.

SB566,321,9 (b) The title to all property owned by the converting entity is vested in the converted entity without transfer, reversion, or impairment.

SB566,321,11 (c) The converted entity has all debts, obligations, and other liabilities of the converting entity.

SB566,321,14 (d) A civil, criminal, or administrative proceeding pending by or against the converted entity may be continued as if the conversion did not occur, or the converted entity may be substituted in the proceeding for the converting entity.

SB566,321,17 (e) The organizational documents of the converted entity are as provided in the plan of conversion and, to the extent such organizational documents are to be reflected in a public record, as provided in the articles of conversion.

SB566,321,25 (f) The interests of the converting entity that are to be converted into interests, securities, or obligations of the surviving entity, rights to acquire such interests or securities, money, other property, or any combination of the foregoing, are converted as provided in the plan of conversion, and the former interest holders of the converting entity are entitled only to the rights provided in the plan of conversion or to their rights, if any, under ss. 178.1161, 179.1161, 180.0301 to 180.1331, 181.1180, 183.1061, or otherwise under the governing law of the converting entity. All other terms and conditions of the conversion also take effect.

SB566,322,3 (g) Except as prohibited by other law or as otherwise provided in the articles and plan of conversion, all of the rights, privileges, immunities, powers, and purposes of the converting entity vest in the converted entity.

SB566,322,7 (h) Except as otherwise provided in the articles and plan of conversion, if the converting entity is a partnership, limited liability company, or other entity subject to dissolution under its governing law, the conversion does not dissolve the converting entity for the purposes of its governing law.

SB566,322,11 (2) (a) When a conversion takes effect, the department is the agent of any foreign converted entity for service of process in a proceeding to enforce any obligation or the rights of interest holders, in their capacity as such, of any domestic corporation converting entity.

SB566,322,14 (b) When a conversion takes effect, any foreign converted entity shall timely honor the rights and obligations of interest holders under this chapter with respect to any domestic corporation converting entity.

SB566,554 Section 554. 181.1171 of the statutes is created to read:

SB566,322,23 181.1171 Domestication authorized. A domestic corporation may domesticate as a non-United States entity subject to non-United States governing law while continuing to be a domestic corporation, and a non-United States entity may domesticate as a domestic corporation subject to this chapter while continuing to be an entity subject to its non-United States governing law pursuant to ss. 181.1171 to 181.1175 and a plan of domestication, if the domestication is permitted under the governing law of the domesticating entity and permitted under the governing law of the domesticated entity.

SB566,555 Section 555. 181.1172 of the statutes is created to read:

SB566,323,2 181.1172 Plan of domestication. (1) A plan of domestication must be in a record and contain all of the following:

SB566,323,3 (a) The name, type of entity, and governing law of the domesticating entity.

SB566,323,4 (b) The name, type of entity, and governing law of the domesticated entity.

SB566,323,5 (c) The terms and conditions of the domestication.

SB566,323,9 (d) The organizational documents of the domesticated entity that are to be in a record immediately after the domestication becomes effective, including any proposed amendments to the organizational documents of the domesticating entity that are to be in a record immediately after the domestication becomes effective.

SB566,323,11 (2) In addition to the requirements of sub. (1), a plan of domestication may contain any other provision relating to the domestication and not prohibited by law.

SB566,556 Section 556. 181.1173 of the statutes is created to read:

SB566,323,18 181.1173 Approval of domestication; amendment; abandonment. (1) Subject to s. 181.1180, a plan of domestication must be approved in accordance with the procedures that govern a plan of merger under s. 181.1103 for the submission and approval of a plan of domestication with respect to a domesticating Wisconsin corporation. A plan of domestication of a non-United States domesticating entity must be approved pursuant to the governing law of the domesticating entity.

SB566,323,24 (2) Subject to s. 181.1180 and the governing law of each of the domesticating entity and domesticated entity, after a plan of domestication is approved, and at any time before a domestication becomes effective, the domesticating entity may amend the plan of domestication or abandon the domestication as provided in the plan of domestication or, except as otherwise provided in the plan of domestication, with the same vote or consent as was required to approve the plan of domestication.

SB566,324,8 (3) If, after articles of domestication have been delivered to the department for filing and before the domestication becomes effective, the plan of domestication is amended in a manner that requires an amendment to the articles of domestication or if the domestication is abandoned, a statement of amendment or abandonment, signed by the domesticating entity, must be delivered to the department for filing before the domestication becomes effective. When a statement of abandonment becomes effective, the domestication is abandoned and does not become effective. The statement of amendment or abandonment must contain all of the following:

SB566,324,10 (a) The name of the domesticating entity and the domesticated entity under the plan of domestication.

SB566,324,11 (b) The amendment to or abandonment of the articles of domestication.

SB566,324,13 (c) A statement that the amendment or abandonment was approved in accordance with this section.

SB566,557 Section 557. 181.1174 of the statutes is created to read:

SB566,324,18 181.1174 Filings required for domestication; effective date. (1) After the domesticating entity has approved a plan of domestication in accordance with its governing law, the domesticating entity shall deliver, or cause to be delivered, to the department for filing articles of domestication setting forth all of the following:

SB566,324,19 (a) The name, type of entity, and governing law of the domesticating entity.

SB566,324,20 (b) The name, type of entity, and governing law of the domesticated entity.

SB566,324,22 (c) A statement that a plan of domestication has been approved and adopted by the domesticating entity in accordance with its governing law.

SB566,324,25 (d) Any amendments to the organizational documents of the domesticating entity and any organizational documents of the domesticated entity that are to be in a public record under their respective governing laws.

SB566,325,2 (e) A statement that the plan of domestication is on file at the principal office of the domesticated entity.

SB566,325,4 (f) A statement that upon request the domesticated entity will provide a copy of the plan of domestication to any interest holder in the domesticating entity.

SB566,325,7 (2) In addition to the requirements of sub. (1), the articles of domestication may contain any other provisions relating to the domestication, as determined by the domesticating entity in accordance with the plan of domestication.

SB566,325,9 (3) A domestication takes effect at the effective date and time of the articles of domestication.

SB566,558 Section 558. 181.1175 of the statutes is created to read:

SB566,325,12 181.1175 Effect of domestication. (1) When a domestication becomes effective, all of the following apply:

SB566,325,16 (a) The domesticating entity becomes a domestic entity under and becomes subject to the governing law of the jurisdiction in which it has domesticated while continuing to be a domestic organization under and subject to the governing law of the domesticating entity.

SB566,325,18 (am) 1. Except as provided in this paragraph, no interest holder shall have interest holder liability with respect to the domesticating or domesticated entity.

SB566,325,24 2. If, under the governing law of the domesticating entity, one or more of the interest holders thereof has interest holder liability with respect to the domesticating entity, such interest holder or holders shall continue to have such liability and any associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the domesticating entity.

SB566,326,6 3. If, under the governing law of the domesticated entity, one or more of the interest holders thereof will have interest holder liability after the domestication with respect to the domesticated entity, such interest holder or holders will have such liability and associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the domesticated entity that accrue after the domestication.

SB566,326,7 4. This paragraph does not affect liability under any taxation laws.

SB566,326,9 (b) The title to all property owned by the domesticating entity is vested in the domesticated entity without transfer, reversion, or impairment.

SB566,326,11 (c) The domesticated entity has all debts, obligations, or other liabilities of the domesticating entity.

SB566,326,15 (d) A civil, criminal, or administrative proceeding pending by or against the domesticating entity may be continued as if the domestication did not occur, or the domesticated entity may be substituted in the proceeding for the domesticating entity.

SB566,326,19 (e) The organizational documents of the domesticating entity are amended to the extent, if any, provided in the plan of domestication and, to the extent such amendments are to be reflected in a public record, as provided in the articles of domestication.

SB566,326,22 (f) The organizational documents of the domesticated entity are as provided in the plan of domestication and, to the extent such organizational documents are to be reflected in a public record, as provided in the articles of domestication.

SB566,326,25 (g) Except as prohibited by other law or as otherwise provided in the articles and plan of domestication, all of the rights, privileges, immunities, powers, and purposes of the domesticating entity vest in the domesticated entity.

SB566,327,4 (2) Except as otherwise provided in the articles and plan of domestication, if the domesticating entity is a partnership, limited liability company, or other entity subject to dissolution under its governing law, the domestication does not dissolve the domesticating entity for the purposes of its governing law.

SB566,327,7 (3) A domesticated Wisconsin entity consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed by the domesticating or domesticated entity.

SB566,559 Section 559. 181.1180 of the statutes is created to read:

SB566,327,14 181.1180 Restrictions on approval of mergers, interest exchanges, conversions, and domestications. (1) This section shall apply with respect to a member in connection with a merger, interest exchange, conversion, or domestication of a domestic corporation if the member does not vote for or consent to the transaction and the transaction would do any of the following with respect to the member:

SB566,327,21 (a) Materially increase the current or potential obligations of the member with respect to any constituent, surviving, acquiring, acquired, converting, converted, domesticating, or domesticated corporation, whether as a result of becoming subject to personal interest holder liability with respect to the entity as a consequence of being an owner of the entity, becoming subject to affirmative or negative obligations under the organizational documents of the entity, becoming subject to tax on the income of the surviving or converted entity, or otherwise.

SB566,327,23 (b) Treat the member's interests in the corporation in a manner different from the interests of the same class held by any other member.

SB566,328,8 (2) If this section applies with respect to a member in connection with the transaction, the corporation must offer to purchase the member's interest in the corporation as provided in sub. (3). Actual or alleged failure to comply with this section shall not have any impact on, and shall not constitute any basis for any person to challenge, the effectiveness of the transaction, and the member's sole remedy with respect to such failure shall be to commence an action under sub. (4) and otherwise enforce the member's rights under this section. In order to accept the corporation's offer, a member must notify the corporation within 60 days of receipt of the offer. Both the offer and the acceptance may be conditioned upon consummation of the transaction.

SB566,328,14 (3) (a) The purchase price of the interest of the member pursuant to this section is the amount that would be distributable to the member if, on the date of the transaction, the assets of the corporation were sold and the corporation were wound up, with the sale price equal to the greater of the corporation's liquidation value or the value based on a sale of the corporation's entire activities and affairs as a going concern without the member.

SB566,328,18 (b) Interest accrues on the purchase price from the date of the transaction to the date of payment. At the option of the corporation, some or all amounts owing, whether or not presently due, from the member to the corporation may be offset against the purchase price.