Texas § BO.101.628 - AUTHORIZATION OF CONVERSION

§ BO.101.628. AUTHORIZATION OF CONVERSION

AUTHORIZATION OF CONVERSION. (a) A converting series of a domestic limited liability company may convert to a converted series of the company by adopting a plan of conversion of the converting series to a converted series of the company. (b) If the company agreement of the limited liability company specifies the manner of adopting a plan of conversion of a converting series to a converted series of that company, the plan of conversion must be adopted as specified by the company agreement. If the company agreement does not specify the manner of adopting a plan of conversion of a converting series of the company to a converted series of that company and does not prohibit a conversion of a converting series to a converted series, the plan of conversion must be authorized by members of the converting series who own more than 50 percent of the then-current percentage or other interest in the profits of the converting series owned by all of the members of the converting series. If the plan of conversion provides for any amendment to the company agreement, the plan of conversion must also be approved in the manner required by this subchapter for the approval of that amendment. (c) A converting series may not convert if a member associated with the converting series, as a result of the conversion, would become subject to liability under the company agreement as a member, without that member's consent, for a liability or other obligation of the converted series for which the member is not liable under the company agreement as a member of the converting series before the conversion. (d) At the time a conversion takes effect, each member of the converting series has, unless otherwise agreed to by that member, a membership interest in and is the member of the converted series. (e) A plan of conversion must be in writing and must include: (1) the name of the converting series; (2) the name of the converted series; (3) a statement that the converting protected series or registered series, as applicable, is continuing its existence in the form of the converted protected series or registered series, as applicable; (4) the manner and basis, including use of a formula, of converting the membership interests of the converting series into membership interests of the converted series; (5) any amendment to the company agreement that may be necessary to reflect the conversion of the converting series and the establishment of the converted series; and (6) the certificate of registered series required to be filed under this subchapter if the converted series is a registered series. (f) An amendment or certificate of registered series described by Subsection (e)(5) or (6) may be included in the plan of conversion by an attachment or exhibit to the plan. (g) Any of the terms of the plan of conversion may be made dependent on a fact ascertainable outside of the plan if the manner in which the fact will operate on the terms of the conversion is clearly and expressly stated in the plan. In this subsection, "fact" includes the occurrence of any event, including a determination or action by any person. Added by Acts 2021, 87th Leg., R.S., Ch. 43 (S.B. 1523 ), Sec. 1, eff. June 1, 2022. Amended by: Acts 2023, 88th Leg., R.S., Ch. 27 (S.B. 1514 ), Sec. 47, eff. September 1, 2023.