47-25A-9. Conversion of domestic nonprofit corporation to domestic or foreign business corporation.

387 words·~2 min read·/sd/title-47/chapter-47-25/47-25a-9

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

In the case of a conversion of a domestic nonprofit corporation to a domestic or foreign business corporation:

(1)The plan of for-profit conversion must be adopted by the board of directors;

(2)After adopting the plan of for-profit conversion, the board of directors must submit the plan to the members for their approval if there are members entitled to vote on the plan. The board of directors must also transmit to the members a recommendation that the members approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors must transmit to the members the basis for that determination;

(3)The board of directors may condition its submission of the plan of for-profit conversion to the members on any basis;

(4)If the approval of the members is to be given at a meeting, the corporation must notify each member of the meeting of members at which the plan of for-profit conversion is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the proposed articles of incorporation to be in effect immediately after the for-profit conversion;

(5)Unless the articles of incorporation, or the board of directors acting pursuant to subdivision (3), require a greater vote or a greater number of votes to be present, the approval of the plan of for-profit conversion by the members requires the approval of each class of members of the corporation voting as a separate class at a meeting at which a quorum of the class exists; and

(6)If any provision of the articles of incorporation, bylaws, or an agreement to which any of the directors or members are parties, adopted or entered into before July 1, 2016, applies to a merger of the corporation and the document does not refer to a for-profit conversion of the corporation, the provision shall be deemed to apply to a for-profit conversion of the corporation until such time as the provision is amended subsequent to that date.