275.376 Conversion of corporation or foreign corporation to limited liability
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/ky/275-376A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
company.
(1)A corporation may be converted to a limited liability company pursuant to this
section.
(2)The terms and conditions of the conversion of a corporation to a limited liability
company shall be set forth in a written plan of conversion and approved by the
board of directors and by the shareholders of the corporation.
(3)The plan of conversion shall set forth:
(a)The name of the corporation planning to convert;
(b)The terms and conditions of the conversion, including the articles of
organization and the written operating agreement, if any, of the limited
liability company into which the corporation will convert; and
(c)The manner and basis of converting the shares of the corporation into
membership interests, obligations, or other securities of the limited liability
company or into cash or other property in whole or part.
(4)The plan of conversion may set forth any other provision relating to the conversion.
(5)For a plan of conversion to be approved:
(a)The board of directors shall recommend the plan of conversion to the
shareholders, unless the board of directors determines that, because of conflict
of interest or other special circumstances, it should make no recommendation
and communicates the basis for its determination to the shareholders with a
plan; and
(b)The shareholders entitled to vote shall approve the plan.
(6)The board of directors may condition its submission of the proposed conversion on
any basis.
(7)The corporation shall notify each shareholder, whether or not entitled to vote, of the
proposed shareholders' meeting in accordance with KRS 271B.7-050. The notice
shall also state that the purpose, or one
(1)of the purposes, of the meeting is to
consider the plan of conversion and contain or be accompanied by a copy or
summary of the plan.
(8)Unless KRS Chapter 271B, the articles of incorporation, or the board of directors
acting pursuant to subsection
(6)of this section, require a greater vote or vote by
voting groups, the plan of conversion to be authorized shall be approved by each
voting group entitled to vote separately on the plan by a majority of all the votes
entitled to be cast on the plan by that voting group.
(9)Separate voting by voting groups shall be required on a plan of conversion if the
plan contains a provision that, if contained in a proposed amendment to the articles
of incorporation, would require action by one
(1)or more separate voting groups on
the proposed amendment under KRS 271B.10-040.
(10)After a conversion is authorized, and at any time before articles of organization are
filed, the planned conversion may be abandoned subject to any contractual rights,
without further shareholder action, in accordance with the procedure set forth in the
plan of conversion or, if none is set forth, in the manner determined by the board of
directors.
(11)After the conversion is approved, the corporation shall file articles of organization
with the office of the Secretary of State that satisfy the requirements of KRS
275.025 and also include:
(a)A statement that the corporation was converted to a limited liability company;
(b)Its former name; and
(c)The designation, number of outstanding shares, and number of votes to be cast
by each voting group entitled to vote separately on the plan of conversion and
either the total number of undisputed votes cast for the plan separately by each
voting group or a statement that the number cast for the plan by each voting
group was sufficient for approval by that voting group.
(12)The conversion shall take effect when the articles of organization are filed with the
office of the Secretary of State or, subject to KRS 14A.2-070, at a later date
specified in the articles of organization.
(13)Both a nonprofit corporation organized under the laws of the Commonwealth and a
foreign nonprofit corporation, if not forbidden by the laws of its jurisdiction of
organization, may convert into a nonprofit limited liability company, except that the
only member or members of the converted nonprofit limited liability company shall
be organizations qualified under Section 501(c)(3) or 501(c)(4) of the Internal
Revenue Code. The articles of organization filed to effect this conversion, in
addition to the otherwise applicable requirements, shall contain an affirmative
statement that the only member or members of the converted nonprofit limited
liability company are qualified under Section 501(c)(3) or 501(c)(4) of the Internal
Revenue Code.