10-1818. Conversion of corporate status
(Rpld. 1/1/15)
A. A close corporation may convert its status to that of a corporation organized pursuant to chapter 2, article 1 of this title by amending its articles of incorporation to delete therefrom all reference to the term " close corporation" including its use in the name of the corporation, and to comply with section 10-202, subsection A. Such an amendment shall be adopted by a two-thirds vote of the voting rights of the capital units unless the articles of incorporation require a greater vote to convert. The articles of incorporation as amended shall also provide for the cancellation of capital units and the basis on which shares will be issued in lieu thereof.
B. The conversion of a close corporation is effected if there has been substantial compliance in good faith with the requirements of subsection A of this section.
C. A corporation organized pursuant to chapters 1 through 17 of this title having ten or fewer shareholders may convert its status to that of a close corporation and be subject to the provisions of this article by amending its articles of incorporation to comply with section 10-1803. A resolution so amending its articles of incorporation shall be adopted by the unanimous vote of all shareholders whether otherwise entitled to vote or not. The resolution amending the articles of incorporation shall provide for the cancellation of all issued and outstanding shares of stock and state the relative rights of capital units.
D. No conversion pursuant to this section shall be deemed a termination or dissolution of the corporate entity or a sale or exchange of the shares of capital units.
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