Texas Business Organizations Code - Section 10.106. General Effect Of Conversion
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§ 10.106. GENERAL EFFECT OF CONVERSION. When a
conversion takes effect:
(1) the converting entity continues to exist without
interruption in the organizational form of the converted entity
rather than in the organizational form of the converting entity;
(2) all rights, title, and interests to all property
owned by the converting entity continues to be owned, subject to any
existing liens or other encumbrances on the property, by the
converted entity in the new organizational form without:
(A) reversion or impairment;
(B) further act or deed; or
(C) any transfer or assignment having occurred;
(3) all liabilities and obligations of the converting
entity continue to be liabilities and obligations of the converted
entity in the new organizational form without impairment or
diminution because of the conversion;
(4) the rights of creditors or other parties with
respect to or against the previous owners or members of the
converting entity in their capacities as owners or members in
existence when the conversion takes effect continue to exist as to
those liabilities and obligations and may be enforced by the
creditors and obligees as if a conversion had not occurred;
(5) a proceeding pending by or against the converting
entity or by or against any of the converting entity's owners or
members in their capacities as owners or members may be continued by
or against the converted entity in the new organizational form and
by or against the previous owners or members without a need for
substituting a party;
(6) the ownership or membership interests of the
converting entity that are to be converted into ownership or
membership interests of the converted entity as provided in the
plan of conversion are converted as provided by the plan, and if the
converting entity is a domestic entity, the former owners or
members of the domestic entity are entitled only to the rights
provided in the plan of conversion or a right of dissent and
appraisal under this code;
(7) if, after the conversion takes effect, an owner or
member of the converted entity as an owner or member is liable for
the liabilities or obligations of the converted entity, the owner
or member is liable for the liabilities and obligations of the
converting entity that existed before the conversion took effect
only to the extent that the owner or member:
(A) agrees in writing to be liable for the
liabilities or obligations;
(B) was liable, before the conversion took
effect, for the liabilities or obligations; or
(C) by becoming an owner or member of the
converted entity, becomes liable under other applicable law for the
existing liabilities and obligations of the converted entity; and
(8) if the converted entity is a non-code
organization, the converted entity is considered to have:
(A) appointed the secretary of state in this
state as its agent for service of process in a proceeding to enforce
any obligation or the rights of dissenting owners or members of the
converting domestic entity; and
(B) agreed that the converted entity will
promptly pay the dissenting owners or members of the converting
domestic entity the amount, if any, to which they are entitled under
this code.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
Section: 10.055 10.056 10.101 10.102 10.103 10.104 10.105 10.106 10.107 10.108 10.151 10.152 10.153 10.154 10.155
Last modified: August 11, 2007
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