16-1a-804. Approval of interest exchange.

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

Effective 10/1/2026

(1)A plan of interest exchange is only effective if:

(a)an acquired domestic entity approves the plan of exchange:

(i)in accordance with the requirements, if any, in the acquired domestic entity's organic law and organic rules for approval of an interest exchange;

(ii)if the domestic acquired entity's organic law or organic rules do not provide for approval of an interest exchange, in accordance with the requirements, if any, of the domestic acquired entity's organic law and organic rules for the approval of:

(A)for an entity that is not a business corporation or a limited cooperative association, a merger as if the interest exchange were a merger;

(B)for a business corporation, a merger requiring approval by a vote of the interest holders of the business corporation as if the interest exchange were that type of merger; or

(C)for a limited cooperative association, a transaction under this part; or

(iii)by a majority vote of each interest holder of the acquired domestic entity that is entitled to vote on or consent to any matter if:

(A)for an entity that is not a business corporation or limited cooperative association, the entity's organic law or organic rules do not provide for the approval of an interest exchange or a merger; or

(B)for a limited cooperative association, the entity's organic law or organic rules do not provide for the approval of an interest exchange or a transaction under this part;

(b)the acquired domestic entity approves the plan of exchange in a record, by each interest holder of an acquired domestic entity that will have interest holder liability for any debt, obligation, or other liability that the acquired domestic entity incurs after the interest exchange takes effect; and

(c)if the acquired domestic entity is not a business corporation or nonprofit corporation, the requirements of Subsection (1)(b) do not apply if:

(i)the organic rules of the acquired domestic entity contain in a record a provision that provides for the approval of an interest exchange or a merger in which some or all of the acquired domestic entity's interest holders become subject to interest holder liability by the vote or consent of fewer than all of the interest holders; and

(ii)the interest holders consent in a record to or vote for the provision described in Subsection (1)(c)(i) of the organic rules or became an interest holder after the adoption of that provision.

(2)An interest exchange involving a foreign acquired entity is not effective unless the foreign entity approves the interest exchange in accordance with the law of the foreign entity's jurisdiction of formation.

(3)Except as otherwise provided in the acquiring entity's organic law or organic rules, the acquiring entity's interest holders are not required to approve an interest exchange.

Enacted by Chapter 93 , 2026 General Session