This section says what happens when an entity conversion becomes effective, including how property, liabilities, lawsuits, ownership interests, appraisal rights, and owner liability are treated.
§1-955. Effect of entity conversion A. When a conversion under this Subpart becomes effective, all of the following shall apply: (1) The title to all real and personal property, both tangible and intangible, of the converting entity remains in the surviving entity without transfer, assignment, reversion or impairment. (2) The liabilities of the converting entity remain the liabilities of the surviving entity. (3) A pending action or proceeding by or against the converting entity continues by or against the surviving entity as if the conversion had not occurred without any need for substitution of parties. (4) The provisions included in or attached to the articles of entity conversion in accordance with R.S. 12:1-953(B)(3) become effective as the articles of incorporation, articles of organization, initial report, registered contract of partnership, or registered application for registry of a registered limited liability partnership, as appropriate for the surviving entity. (5) In the case of a surviving entity that is a nonfiling entity, its private organic document becomes effective. (6) The shares or interests of the converting entity are reclassified into shares, interests, other securities, obligations, rights to acquire shares, interests, or other securities, or into cash or other property in accordance with the plan of conversion; and the shareholders or interest holders of the converting entity are entitled only to the rights provided to them under the terms of the conversion and to any appraisal rights they may have under the organic law of the converting entity. (7) The surviving entity is deemed to be all of the following: (a) Incorporated or organized under and subject to the organic law of the surviving entity for all purposes. (b) The same corporation or unincorporated entity without interruption as the converting entity. (c) Incorporated or otherwise organized on the date that the converting entity was originally incorporated or organized. B. When a conversion of a domestic business corporation to a foreign unincorporated entity becomes effective, the surviving entity remains both of the following: (1) Obligated under the laws of this state to pay promptly the amount, if any, to which shareholders who exercise appraisal rights in connection with the conversion are entitled under Part 13 of this Chapter. (2) Subject to the personal jurisdiction of the courts of this state in accordance with R.S. 13:3201, and to service of process in accordance with law. C. A shareholder who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of the surviving entity shall be personally liable only for those debts, obligations, or liabilities of the surviving entity that arise after the effective time of the articles of entity conversion. D. The owner liability of an interest holder in an unincorporated entity that converts to another form of domestic unincorporated entity or to a domestic business corporation shall be as follows: (1) The conversion does not discharge any owner liability under the organic law of the converting entity to the extent any such owner liability arose before the effective time of the articles of entity conversion. (2) The interest holder shall not have owner liability under the organic law of the converting entity for any debt, obligation, or liability of the corporation that arises after the effective time of the articles of entity conversion. (3) The provisions of the organic law of the converting entity shall continue to apply to the collection or discharge of any owner liability preserved by Paragraph (D)(1) of this Section, as if the conversion had not occurred. (4) The interest holder shall have whatever rights of contribution from other interest holders are provided by the organic law of the converting entity with respect to any owner liability preserved by Paragraph (D)(1) of this Section, as if the conversion had not occurred. E. The provisions of R.S. 12:1603 and 12:1604, concerning tax filing requirements and professional licenses, apply in either of the following cases of an entity conversion: (1) By a domestic business corporation to a domestic unincorporated entity. (2) By a domestic unincorporated entity to a domestic business corporation or to another form of domestic unincorporated entity. F. For purposes of service of process under Paragraph (B)(2) of this Section, a foreign eligible entity that is a survivor of a merger may be served in accordance with the rules applicable to service of process on a foreign corporation, as if both of the following conditions existed: (1) The survivor were a foreign corporation. (2) Each of the following persons were a director of that corporation: (a) A general partner if the survivor is a partnership of any kind. (b) A member if the survivor is a member-managed limited liability company. (c) A manager if the survivor is a manager-managed limited liability company. (d) A person holding managerial authority in the survivor, regardless of the form of the surviving entity, that is similar to that of an officer or director of a domestic business corporation. Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.