CONVERSION AND MERGER

Iowa Code tit. XII, ch. 488, art. 11

in effect

Iowa Code § 488.1101 Definitions.

488.1101. Definitions. For purposes of this article, unless the context otherwise requires: 1. “Constituent limited partnership” means a constituent organization that is a limited partnership. 2. “Constituent organization” means an organization that is party to a merger. 3. “Converted organization” means the organization into which a converting organization converts pursuant to sections 488.1102 through 488.1105. 4. “Converting limited partnership” means a converting organization that is a limited partnership. 5. “Converting organization” means an organization that converts into another organization pursuant to section 488.1102. 6. “General partner” means a general partner of a limited partnership. 7. “Governing statute” of an organization means the statute that governs the organization’s internal affairs. 8. “Organization” means a general partnership, including a limited liability partnership; limited partnership, including a limited liability limited partnership; limited liability company; business trust; corporation; or any other person having a governing statute. The term includes domestic and foreign organizations whether or not organized for profit. 9. “Organizational documents” means all of the following: a. For a domestic or foreign general partnership, its partnership agreement. b. For a limited partnership or foreign limited partnership, its certificate of limited partnership and partnership agreement. c. For a domestic or foreign limited liability company, its articles of organization and operating agreement, or comparable records as provided in its governing statute. d. For a business trust, its agreement of trust and declaration of trust. e. For a domestic or foreign corporation for profit, its articles of incorporation, bylaws, and other agreements among its shareholders which are authorized by its governing statute, or comparable records as provided in its governing statute. f. For any other organization, the basic records that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it. 10. “Personal liability” means personal liability for a debt, liability, or other obligation of an organization which is imposed on a person that co-owns, has an interest in, or is a member of the organization according to either of the following: a. By the organization’s governing statute solely by reason of the person co-owning, having an interest in, or being a member of the organization. b. By the organization’s organizational documents under a provision of the organization’s governing statute authorizing those documents to make one or more specified persons liable for all or specified debts, liabilities, and other obligations of the organization solely by reason of the person or persons co-owning, having an interest in, or being a member of the organization. 11. “Surviving organization” means an organization into which one or more other organizations are merged. A surviving organization may preexist the merger or be created by the merger. 2004 Acts, ch 1021, §89, 118

Iowa Code § 488.1102 Conversion.

488.1102. Conversion. 1. An organization other than a limited partnership may convert to a limited partnership, and a limited partnership may convert to another organization pursuant to this section and sections 488.1103 through 488.1105 and a plan of conversion, if all of the following apply: a. The other organization’s governing statute authorizes the conversion. b. The conversion is not prohibited by the law of the jurisdiction that enacted the governing statute. c. The other organization complies with its governing statute in effecting the conversion. 2. A plan of conversion must be in a record and must include all of the following: a. The name and form of the organization before conversion. b. The name and form of the organization after conversion. c. The terms and conditions of the conversion, including the manner and basis for converting interests in the converting organization into any combination of money, interests in the converted organization, and other consideration. d. The organizational documents of the converted organization. 2004 Acts, ch 1021, §90, 118

Iowa Code § 488.1103 Action on plan of conversion by converting limited partnership.

488.1103. Action on plan of conversion by converting limited partnership. 1. Subject to section 488.1110, a plan of conversion must be consented to by all the partners of a converting limited partnership. 2. Subject to section 488.1110 and any contractual rights, after a conversion is approved, and at any time before a filing is made under section 488.1104, a converting limited partnership may amend the plan or abandon the planned conversion according to any or all of the following: a. As provided in the plan. b. Except as prohibited by the plan, by the same consent as was required to approve the plan. 2004 Acts, ch 1021, §91, 118

Iowa Code § 488.1104 Filings required for conversion — effective date.

488.1104. Filings required for conversion — effective date. 1. After a plan of conversion is approved: a. A converting limited partnership shall deliver to the secretary of state for filing articles of conversion, which must include all of the following: (1) A statement that the limited partnership has been converted into another organization. (2) The name and form of the organization and the jurisdiction of its governing statute. (3) The date the conversion is effective under the governing statute of the converted organization. (4) A statement that the conversion was approved as required by this chapter. (5) A statement that the conversion was approved as required by the governing statute of the converted organization. (6) If the converted organization is a foreign organization not authorized to transact business in this state, the street and mailing address of an office which the secretary of state may use for the purposes of section 488.1105, subsection 3. b. If the converting organization is not a converting limited partnership, the converting organization shall deliver to the secretary of state for filing a certificate of limited partnership, which must include, in addition to the information required by section 488.201, all of the following: (1) A statement that the limited partnership was converted from another organization. (2) The name and form of the organization and the jurisdiction of its governing statute. (3) A statement that the conversion was approved in a manner that complied with the organization’s governing statute. 2. A conversion becomes effective according to the following: a. If the converted organization is a limited partnership, when the certificate of limited partnership takes effect. b. If the converted organization is not a limited partnership, as provided by the governing statute of the converted organization. 2004 Acts, ch 1021, §92, 118

Iowa Code § 488.1105 Effect of conversion.

488.1105. Effect of conversion. 1. An organization that has been converted pursuant to this article is for all purposes the same entity that existed before the conversion. 2. When a conversion takes effect, all of the following apply: a. All property owned by the converting organization remains vested in the converted organization. b. All debts, liabilities, and other obligations of the converting organization continue as obligations of the converted organization. c. An action or proceeding pending by or against the converting organization may be continued as if the conversion had not occurred. d. Except as prohibited by other law, all of the rights, privileges, immunities, powers, and purposes of the converting organization remain vested in the converted organization. e. Except as otherwise provided in the plan of conversion, the terms and conditions of the plan of conversion take effect. f. Except as otherwise agreed, the conversion does not dissolve a converting limited partnership for the purposes of article 8. 3. A converted organization that is a foreign organization consents to the jurisdiction of the courts of this state to enforce any obligation owed by the converting limited partnership, if before the conversion the converting limited partnership was subject to suit in this state on the obligation. A converted organization that is a foreign organization and not authorized to transact business in this state appoints the secretary of state as its agent for service of process for purposes of enforcing an obligation under this subsection. Service on the secretary of state under this subsection is made in the same manner and with the same consequences as in section 488.117, subsections 3 and 4. 2004 Acts, ch 1021, §93, 118

Iowa Code § 488.1106 Mergers.

488.1106. Mergers. 1. A limited partnership may merge with one or more other constituent organizations pursuant to this section and sections 488.1107 through 488.1109 and a plan of merger, if all of the following apply: a. The governing statute of each of the other organizations authorizes the merger. b. The merger is not prohibited by the law of a jurisdiction that enacted any of those governing statutes. c. Each of the other organizations complies with its governing statute in effecting the merger. 2. A plan of merger must be in a record and must include all of the following: a. The name and form of each constituent organization. b. The name and form of the surviving organization and, if the surviving organization is to be created by the merger, a statement to that effect. c. The terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration. d. If the surviving organization is to be created by the merger, the surviving organization’s organizational documents. e. If the surviving organization is not to be created by the merger, any amendments to be made by the merger to the surviving organization’s organizational documents. 2004 Acts, ch 1021, §94, 118; 2004 Acts, ch 1175, §383

Iowa Code § 488.1107 Action on plan of merger by constituent limited partnership.

488.1107. Action on plan of merger by constituent limited partnership. 1. Subject to section 488.1110, a plan of merger must be consented to by all the partners of a constituent limited partnership. 2. Subject to section 488.1110 and any contractual rights, after a merger is approved, and at any time before a filing is made under section 488.1108, a constituent limited partnership may amend the plan or abandon the planned merger according to any or all of the following: a. As provided in the plan. b. Except as prohibited by the plan, with the same consent as was required to approve the plan. 2004 Acts, ch 1021, §95, 118

Iowa Code § 488.1108 Filings required for merger — effective date.

488.1108. Filings required for merger — effective date. 1. After each constituent organization has approved a merger, articles of merger must be signed on behalf of all of the following: a. Each preexisting constituent limited partnership, by each general partner listed in the certificate of limited partnership. b. Each other preexisting constituent organization, by an authorized representative. 2. The articles of merger must include all of the following: a. The name and form of each constituent organization and the jurisdiction of its governing statute. b. The name and form of the surviving organization, the jurisdiction of its governing statute, and, if the surviving organization is created by the merger, a statement to that effect. c. The date the merger is effective under the governing statute of the surviving organization. d. If the surviving organization is to be created by the merger, one of the following: (1) If it will be a limited partnership, the limited partnership’s certificate of limited partnership. (2) If it will be an organization other than a limited partnership, the organizational document that creates the organization. e. If the surviving organization preexists the merger, any amendments provided for in the plan of merger for the organizational document that created the organization. f. A statement as to each constituent organization that the merger was approved as required by the organization’s governing statute. g. If the surviving organization is a foreign organization not authorized to transact business in this state, the street and mailing address of an office which the secretary of state may use for the purposes of section 488.1109, subsection 2. h. Any additional information required by the governing statute of any constituent organization. 3. Each constituent limited partnership shall deliver the articles of merger for filing in the office of the secretary of state. 4. A merger becomes effective under this article according to one of the following: a. If the surviving organization is a limited partnership, upon the later of the following: (1) Compliance with subsection 3. (2) Subject to section 488.206, subsection 3, as specified in the articles of merger. b. If the surviving organization is not a limited partnership, as provided by the governing statute of the surviving organization. 2004 Acts, ch 1021, §96, 118

Iowa Code § 488.1109 Effect of merger.

488.1109. Effect of merger. 1. When a merger becomes effective, all of the following apply: a. The surviving organization continues or comes into existence. b. Each constituent organization that merges into the surviving organization ceases to exist as a separate entity. c. All property owned by each constituent organization that ceases to exist vests in the surviving organization. d. All debts, liabilities, and other obligations of each constituent organization that ceases to exist continue as obligations of the surviving organization. e. An action or proceeding pending by or against any constituent organization that ceases to exist may be continued as if the merger had not occurred. f. Except as prohibited by other law, all of the rights, privileges, immunities, powers, and purposes of each constituent organization that ceases to exist vest in the surviving organization. g. Except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect. h. Except as otherwise agreed, if a constituent limited partnership ceases to exist, the merger does not dissolve the limited partnership for the purposes of article 8. i. If the surviving organization is created by the merger, one of the following applies: (1) If it is a limited partnership, the certificate of limited partnership becomes effective. (2) If it is an organization other than a limited partnership, the organizational document that creates the organization becomes effective. j. If the surviving organization preexists the merger, any amendments provided for in the articles of merger for the organizational document that created the organization become effective. 2. A surviving organization that is a foreign organization consents to the jurisdiction of the courts of this state to enforce any obligation owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state on the obligation. A surviving organization that is a foreign organization and not authorized to transact business in this state appoints the secretary of state as its agent for service of process for the purposes of enforcing an obligation under this subsection. Service on the secretary of state under this subsection is made in the same manner and with the same consequences as in section 488.117, subsections 3 and 4. 2004 Acts, ch 1021, §97, 118

Iowa Code § 488.1110 Restrictions on approval of conversions and mergers and on relinquishing limited liability limited partnership status.

488.1110. Restrictions on approval of conversions and mergers and on relinquishing limited liability limited partnership status. 1. If a partner of a converting or constituent limited partnership will have personal liability with respect to a converted or surviving organization, approval and amendment of a plan of conversion or merger are ineffective without the consent of the partner, unless all of the following apply: a. The limited partnership’s partnership agreement provides for the approval of the conversion or merger with the consent of fewer than all the partners. b. The partner has consented to the provision of the partnership agreement. 2. An amendment to a certificate of limited partnership which deletes a statement that the limited partnership is a limited liability limited partnership is ineffective without the consent of each general partner, unless all of the following apply: a. The limited partnership’s partnership agreement provides for the amendment with the consent of less than all the general partners. b. Each general partner that does not consent to the amendment has consented to the provision of the partnership agreement. 3. A partner does not give the consent required by subsection 1 or 2 merely by consenting to a provision of the partnership agreement which permits the partnership agreement to be amended with the consent of fewer than all the partners. 2004 Acts, ch 1021, §98, 118

Iowa Code § 488.1111 Liability of general partner after conversion or merger.

488.1111. Liability of general partner after conversion or merger. 1. A conversion or merger under this article does not discharge any liability under sections 488.404 and 488.607 of a person that was a general partner in or dissociated as a general partner from a converting or constituent limited partnership, but all of the following apply: a. The provisions of this chapter pertaining to the collection or discharge of the liability continue to apply to the liability. b. For the purposes of applying those provisions, the converted or surviving organization is deemed to be the converting or constituent limited partnership. c. If a person is required to pay any amount under this subsection, all of the following apply: (1) The person has a right of contribution from each other person that was liable as a general partner under section 488.404 when the obligation was incurred and has not been released from the obligation under section 488.607. (2) The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of general partner in effect for each of those persons when the obligation was incurred. 2. In addition to any other liability provided by law, both of the following apply: a. A person that immediately before a conversion or merger became effective was a general partner in a converting or constituent limited partnership that was not a limited liability limited partnership is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective, if, at the time the third party enters into the transaction, all of the following apply to the third party: (1) The third party does not have notice of the conversion or merger. (2) The third party reasonably believes all of the following: (a) The converted or surviving business is the converting or constituent limited partnership. (b) The converting or constituent limited partnership is not a limited liability limited partnership. (c) The person is a general partner in the converting or constituent limited partnership. b. A person that was dissociated as a general partner from a converting or constituent limited partnership before the conversion or merger became effective is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective, if all of the following apply: (1) Immediately before the conversion or merger became effective the converting or surviving limited partnership was not a limited liability limited partnership. (2) At the time the third party enters into the transaction less than two years have passed since the person dissociated as a general partner and all of the following apply to the third party: (a) The third party does not have notice of the dissociation. (b) The third party does not have notice of the conversion or merger. (c) The third party reasonably believes that the converted or surviving organization is the converting or constituent limited partnership, the converting or constituent limited partnership is not a limited liability limited partnership, and the person is a general partner in the converting or constituent limited partnership. 2004 Acts, ch 1021, §99, 118

Iowa Code § 488.1112 Power of general partners and persons dissociated as general partners to bind organization after conversion or merger.

488.1112. Power of general partners and persons dissociated as general partners to bind organization after conversion or merger. 1. An act of a person that immediately before a conversion or merger became effective was a general partner in a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if all of the following apply: a. Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 488.402. b. At the time the third party enters into the transaction, all of the following apply to the third party: (1) The third party does not have notice of the conversion or merger. (2) The third party reasonably believes that the converted or surviving business is the converting or constituent limited partnership and that the person is a general partner in the converting or constituent limited partnership. 2. An act of a person that before a conversion or merger became effective was dissociated as a general partner from a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if all of the following apply: a. Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 488.402 if the person had been a general partner. b. At the time the third party enters into the transaction, less than two years have passed since the person dissociated as a general partner and all of the following apply to the third party: (1) The third party does not have notice of the dissociation. (2) The third party does not have notice of the conversion or merger. (3) The third party reasonably believes that the converted or surviving organization is the converting or constituent limited partnership and that the person is a general partner in the converting or constituent limited partnership. 3. If a person having knowledge of the conversion or merger causes a converted or surviving organization to incur an obligation under subsection 1 or 2, the person is liable to either or both of the following: a. To the converted or surviving organization for any damage caused to the organization arising from the obligation. b. If another person is liable for the obligation, to that other person for any damage caused to that other person arising from the liability. 2004 Acts, ch 1021, §100, 118

Iowa Code § 488.1113 Article not exclusive.

488.1113. Article not exclusive. This article does not preclude an entity from being converted or merged under other law. 2004 Acts, ch 1021, §101, 118