Interest Exchange

R.I. Gen. Laws tit. 7, ch. 7-13.1, pt. 11, subpt. 3

in effect

R.I. Gen. Laws § 7-13.1-1131 Interest exchange authorized.

7-13.1-1131. Interest exchange authorized. (a) By complying with this subpart: (1) A domestic limited partnership may acquire all of one or more classes or series of interests of another domestic entity or a foreign entity in exchange for interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing; or (2) All of one or more classes or series of interests of a domestic limited partnership may be acquired by another domestic entity or a foreign entity in exchange for interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing. (b) By complying with the provisions of this subpart applicable to foreign entities, a foreign entity may be the acquiring or acquired entity in an interest exchange under this subpart if the interest exchange is authorized by the law of the foreign entity’s jurisdiction of formation. (c) If a protected agreement contains a provision that applies to a merger of a domestic limited partnership but does not refer to an interest exchange, the provision applies to an interest exchange in which the domestic limited partnership is the acquired entity as if the interest exchange were a merger until the provision is amended after January 1, 2023. P.L. 2022, ch. 121, § 2, effective January 1, 2023; P.L. 2022, ch. 122, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-13.1-1132 Plan of interest exchange.

7-13.1-1132. Plan of interest exchange. (a) A domestic limited partnership may be the acquired entity in an interest exchange under this subpart by approving a plan of interest exchange. The plan must be in a record and contain: (1) The name of the acquired entity; (2) The name, jurisdiction of formation, and type of entity of the acquiring entity; (3) The manner of converting the interests in the acquired entity into interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing; (4) Any proposed amendments to: (i) The certificate of limited partnership of the acquired entity; and (ii) The partnership agreement of the acquired entity that are, or are proposed to be, in a record; (5) The other terms and conditions of the interest exchange; and (6) Any other provision required by the law of this state or the partnership agreement of the acquired entity. (b) In addition to the requirements of subsection (a) of this section, a plan of interest exchange may contain any other provision not prohibited by law. P.L. 2022, ch. 121, § 2, effective January 1, 2023; P.L. 2022, ch. 122, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-13.1-1133 Approval of interest exchange.

7-13.1-1133. Approval of interest exchange. (a) A plan of interest exchange is not effective unless it has been approved: (1) By all the partners of a domestic acquired limited partnership entitled to vote on or consent to any matter; and (2) In a record, by each partner of the domestic acquired limited partnership that will have interest holder liability for debts, obligations, and other liabilities that are incurred after the interest exchange becomes effective, unless: (i) The partnership agreement of the partnership provides in a record for the approval of an interest exchange or a merger in which some or all its partners become subject to interest holder liability by the affirmative vote or consent of fewer than all of the partners; and (ii) The partner consented in a record to or voted for that provision of the partnership agreement or became a partner after the adoption of that provision. (b) An interest exchange involving a domestic acquired entity that is not a limited partnership is not effective unless it is approved by the domestic entity in accordance with its organic law. (c) An interest exchange involving a foreign acquired entity is not effective unless it is approved by the foreign entity in accordance with the law of the foreign entity’s jurisdiction of formation. (d) Except as otherwise provided in its organic law or organic rules, the interest holders of the acquiring entity are not required to approve the interest exchange. P.L. 2022, ch. 121, § 2, effective January 1, 2023; P.L. 2022, ch. 122, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-13.1-1134 Amendment or abandonment of plan of interest exchange.

7-13.1-1134. Amendment or abandonment of plan of interest exchange. (a) A plan of interest exchange may be amended only with the consent of each party to the plan, except as otherwise provided in the plan. (b) A domestic acquired limited partnership may approve an amendment of a plan of interest exchange: (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) By its partners in the manner provided in the plan, but a partner that was entitled to vote on or consent to approval of the interest exchange is entitled to vote on or consent to any amendment of the plan that will change: (i) The amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing, to be received by any of the partners of the acquired partnership under the plan; (ii) The certificate of limited partnership or partnership agreement of the acquired partnership that will be in effect immediately after the interest exchange becomes effective, except for changes that do not require approval of the partners of the acquired partnership under this chapter or the partnership agreement; or (iii) Any other terms or conditions of the plan, if the change would adversely affect the partner in any material respect. (c) After a plan of interest exchange has been approved and before a statement of interest exchange becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic acquired limited partnership may abandon the plan in the same manner as the plan was approved. (d) If a plan of interest exchange is abandoned after a statement of interest exchange has been delivered to the secretary of state for filing and before the statement becomes effective, a statement of abandonment, signed by the acquired limited partnership, must be delivered to the secretary of state for filing before the statement of interest exchange becomes effective. The statement of abandonment takes effect on filing, and the interest exchange is abandoned and does not become effective. The statement of abandonment must contain: (1) The name of the acquired partnership; (2) The date on which the statement of interest exchange was filed by the secretary of state; and (3) A statement that the interest exchange has been abandoned in accordance with this section. P.L. 2022, ch. 121, § 2, effective January 1, 2023; P.L. 2022, ch. 122, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-13.1-1135 Statement of interest exchange — Effective date of interest exchange.

7-13.1-1135. Statement of interest exchange — Effective date of interest exchange. (a) A statement of interest exchange must be signed by a domestic acquired limited partnership and delivered to the secretary of state for filing. (b) A statement of interest exchange must contain: (1) The name of the acquired limited partnership; (2) The name, jurisdiction of formation, and type of entity of the acquiring entity; (3) A statement that the plan of interest exchange was approved by the acquired limited partnership in accordance with this subpart; and (4) Any amendments to the acquired limited partnership’s certificate of limited partnership approved as part of the plan of interest exchange. (c) In addition to the requirements of subsection (b) of this section, a statement of interest exchange may contain any other provision not prohibited by law. (d) An interest exchange becomes effective when the statement of interest exchange is effective. P.L. 2022, ch. 121, § 2, effective January 1, 2023; P.L. 2022, ch. 122, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-13.1-1136 Effect of interest exchange.

7-13.1-1136. Effect of interest exchange. (a) When an interest exchange in which the acquired entity is a domestic limited partnership becomes effective: (1) The interests in the acquired partnership which are the subject of the interest exchange are converted, and the partners holding those interests are entitled only to the rights provided to them under the plan of interest exchange and to any appraisal rights they have under § 7-13.1-1106; (2) The acquiring entity becomes the interest holder of the interests in the acquired partnership stated in the plan of interest exchange to be acquired by the acquiring entity; (3) The certificate of limited partnership of the acquired partnership is amended to the extent provided in the statement of interest exchange; and (4) The provisions of the partnership agreement of the acquired partnership that are to be in a record, if any, are amended to the extent provided in the plan of interest exchange. (b) Except as otherwise provided in the certificate of limited partnership or partnership agreement of a domestic acquired limited partnership, the interest exchange does not give rise to any rights that a partner or third party would have upon a dissolution, liquidation, or winding up of the acquired partnership. (c) When an interest exchange becomes effective, a person that did not have interest holder liability with respect to a domestic acquired limited partnership and becomes subject to interest holder liability with respect to a domestic entity as a result of the interest exchange has interest holder liability only to the extent provided by the organic law of the entity and only for those debts, obligations, and other liabilities that are incurred after the interest exchange becomes effective. (d) When an interest exchange becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic acquired limited partnership with respect to which the person had interest holder liability is subject to the following rules: (1) The interest exchange does not discharge any interest holder liability under this chapter to the extent the interest holder liability was incurred before the interest exchange became effective. (2) The person does not have interest holder liability under this chapter for any debt, obligation, or other liability that is incurred after the interest exchange becomes effective. (3) This chapter continues to apply to the release, collection, or discharge of any interest holder liability preserved under subsection (d)(1) of this section as if the interest exchange had not occurred. (4) The person has whatever rights of contribution from any other person as are provided by this chapter, law other than this chapter, or the partnership agreement of the domestic acquired partnership with respect to any interest holder liability preserved under subsection (d)(1) of this section as if the interest exchange had not occurred. P.L. 2022, ch. 121, § 2, effective January 1, 2023; P.L. 2022, ch. 122, § 2, effective January 1, 2023.

Source: State of Rhode Island General Assembly (rilegislature.gov)URL: https://webserver.rilegislature.gov/Statutes/TITLE7/7-13.1/7-11/7-3/INDEX.htmFetched: 10/20/2026