Section 9.42: Effect of foreign nonprofit domestication and conversion
482 words·~2 min read·
/ma/part-i/title-xxii/chapter-156d/9-15·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 9.42. EFFECT OF FOREIGN NONPROFIT DOMESTICATION AND CONVERSION
(a)When a domestication and conversion of a foreign nonprofit corporation to a domestic business corporation becomes effective:
(1)the title to all real and personal property, both tangible and intangible, of the corporation remains in the corporation without reversion or impairment;
(2)the liabilities of the corporation remain the liabilities of the corporation;
(3)an action or proceeding pending against the corporation continues against the corporation as if the domestication and conversion had not occurred;
(4)the articles of domestication and conversion, or the articles of organization attached to the articles of domestication and conversion, constitute the articles of organization of the corporation;
(5)shares, other securities, obligations, rights to acquire shares or other securities of the corporation or cash or other property shall be issued or paid as provided pursuant to the laws of the foreign jurisdiction, so long as at least one share is outstanding immediately after the effective time; and
(6)the corporation is considered to:
(i)be a domestic corporation for all purposes;
(ii)be the same corporation without interruption as the corporation that existed under the laws of the jurisdiction in which it was formerly domiciled; and
(iii)have been incorporated on the date it was originally incorporated in the former jurisdiction.
(b)The owner liability of a member of a foreign nonprofit corporation that domesticates and converts to a domestic business corporation shall be as follows:
(1)The domestication and conversion does not discharge any owner liability under the laws of the foreign jurisdiction to the extent any such owner liability arose before the effective time of the articles of domestication and conversion.
(2)The member shall not have owner liability under the laws of the foreign jurisdiction for any debt, obligation or liability of the corporation that arises after the effective time of the articles of domestication and conversion.
(3)The provisions of the laws of the foreign jurisdiction shall continue to apply to the collection or discharge of any owner liability preserved by paragraph (1), as if the domestication and conversion had not occurred and the corporation were still incorporated under the laws of the foreign jurisdiction.
(4)The member shall have whatever rights of contribution from other members are provided by the laws of the foreign jurisdiction with respect to any owner liability preserved by paragraph (1), as if the domestication and conversion had not occurred and the corporation were still incorporated under the laws of that jurisdiction.
(c)A member of a foreign nonprofit corporation who becomes subject to owner liability for some or all of the debts, obligations or liabilities of the corporation as a result of its domestication and conversion in the commonwealth shall be personally liable only for those debts, obligations or liabilities of the corporation that arise after the effective time of the articles of domestication and conversion.