SB566: Bill Text

SB566,181,22 (b) A plan of conversion into a domestic limited partnership converted entity must be approved pursuant to the governing law of the converting entity.

SB566,182,3 (2) Subject to s. 179.1161 and the governing law of each of the converting entity and converted entity, after a plan of conversion is approved, and at any time before a conversion becomes effective, except as otherwise provided in the plan of conversion, the converting entity may amend the plan of conversion or abandon the conversion as provided in the plan of conversion with the same vote or consent as was required to approve the plan of conversion.

SB566,182,11 (3) If, after articles of conversion have been delivered to the department for filing and before the conversion becomes effective, the plan of conversion is amended in a manner that requires an amendment to the articles of conversion or if the conversion is abandoned, a statement of amendment or abandonment, signed by the converting entity, must be delivered to the department for filing before the conversion becomes effective. When a statement of abandonment becomes effective, the conversion is abandoned and does not become effective. The statement of amendment or abandonment must contain all of the following:

SB566,182,13 (a) The name of the converting entity and the converted entity under the plan of conversion.

SB566,182,14 (b) The amendment to or abandonment of the articles of conversion.

SB566,182,16 (c) A statement that the amendment or abandonment was approved in accordance with this section.

SB566,182,20 179.1144 Filings required for conversion; effective date. (1) After the converting entity has approved a plan of conversion in accordance with its governing law, the converting entity shall deliver, or cause to be delivered, to the department for filing articles of conversion setting forth all of the following:

SB566,182,21 (a) The name, type of entity, and governing law of the converting entity.

SB566,182,22 (b) The name, type of entity, and governing law of the converted entity.

SB566,182,24 (c) A statement that the plan of conversion has been approved and adopted by the converting entity in accordance with its governing law.

SB566,183,2 (d) Any organizational documents of the converted entity that are to be in a public record under its governing law.

SB566,183,4 (e) A statement that the plan of conversion is on file at the principal office of the converted entity.

SB566,183,6 (f) A statement that upon request the converted entity will provide a copy of the plan of conversion to any interest holder of the converting entity.

SB566,183,7 (g) A statement whether s. 179.1161 applies to the conversion.

SB566,183,10 (2) In addition to the requirements of sub. (1), the articles of conversion may contain any other provisions relating to the conversion, as determined by the converting entity in accordance with the plan of conversion.

SB566,183,14 (3) If the converted entity is a foreign entity that will be required to register to do business in this state immediately after the conversion and it has not previously registered to do so or been assigned a registration to do so under s. 179.1009, it shall so register.

SB566,183,16 (4) A conversion takes effect at the effective date and time of the articles of conversion.

SB566,183,18 179.1145 Effect of conversion. (1) When a conversion becomes effective, all of the following apply:

SB566,183,22 (a) The converting entity continues its existence in the form of the converted entity and is the same entity that existed before the conversion, except that the converting entity is no longer subject to the governing law that applied prior to the conversion and is subject to the governing law of the converted entity.

SB566,183,24 (am) 1. Except as provided in this paragraph, no interest holder shall have interest holder liability with respect to the converting or converted entity.

SB566,184,7 2. If, under the governing law of the converting entity, one or more of the interest holders thereof had interest holder liability prior to the conversion with respect to the converting entity, such interest holder or holders shall continue to have such liability and any associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the converting entity that accrued during the period or periods in which such interest holder or holders had such interest holder liability.

SB566,184,13 3. If, under the governing law of the converted entity, one or more of the interest holders thereof will have interest holder liability after the conversion with respect to the converted entity, such interest holder or holders will have such liability and any associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the converted entity that accrue after the conversion.

SB566,184,14 4. This paragraph does not affect liability under any taxation laws.

SB566,184,16 (b) The title to all property owned by the converting entity is vested in the converted entity without transfer, reversion, or impairment.

SB566,184,18 (c) The converted entity has all debts, obligations, and other liabilities of the converting entity.

SB566,184,21 (d) A civil, criminal, or administrative proceeding pending by or against the converting entity may be continued as if the conversion did not occur, or the converted entity may be substituted in the proceeding for the converting entity.

SB566,184,24 (e) The organizational documents of the converted entity are as provided in the plan of conversion and, to the extent such organizational documents are to be reflected in a public record, as provided in the articles of conversion.

SB566,185,8 (f) The interests of the converting entity that are to be converted into interests, securities, or obligations of the surviving entity, rights to acquire such interests or securities, money, other property, or any combination of the foregoing, are converted as provided in the plan of conversion, and the former interest holders of the converting entity are entitled only to the rights provided in the plan of conversion or to their rights, if any, under ss. 178.1161, 179.1161, 180.0301 to 180.1331, 181.1180, or otherwise under the governing law of the converting entity. All other terms and conditions of the conversion also take effect.

SB566,185,11 (g) Except as prohibited by other law or as otherwise provided in the articles and plan of conversion, all of the rights, privileges, immunities, powers, and purposes of the converting entity vest in the converted entity.

SB566,185,15 (h) Except as otherwise provided in the articles and plan of conversion, if the converting entity is a partnership, limited liability company, or other entity subject to dissolution under its governing law, the conversion does not dissolve the converting entity for the purposes of its governing law.

SB566,185,19 (2) (a) When a conversion takes effect, the department is an agent of any foreign converted entity for service of process in a proceeding to enforce any obligation or the rights of interest holders, in their capacity as such, of any domestic limited partnership converting entity.

SB566,185,22 (b) When a conversion takes effect, any foreign converted entity shall timely honor the rights and obligations of interest holders under this chapter with respect to any domestic limited partnership converting entity.

SB566,186,3 (3) When a conversion takes effect, any foreign converted entity may be served with process in this state for the collection and enforcement of any debts, obligations, or other liabilities of a domestic converting entity in the manner provided in s. 179.0121, except that references to the department in that section shall be treated as references to the appropriate authority under the foreign converted entity's governing law for purposes of applying this subsection.

SB566,186,11 179.1151 Domestication authorized. A domestic limited partnership may domesticate as a non-United States entity subject to non-United States governing law while continuing to be a domestic limited partnership, and a non-United States entity may domesticate as a domestic limited partnership subject to this chapter while continuing to be an entity subject to its non-United States governing law pursuant to ss. 179.1151 to 179.1155 and a plan of domestication, if the domestication is permitted under the governing law of the domesticating entity and permitted under the governing law of the domesticated entity.

SB566,186,13 179.1152 Plan of domestication. (1) A plan of domestication must be in a record and contain all of the following:

SB566,186,14 (a) The name, type of entity, and governing law of the domesticating entity.

SB566,186,15 (b) The name, type of entity, and governing law of the domesticated entity.

SB566,186,16 (c) The terms and conditions of the domestication.

SB566,186,20 (d) The organizational documents of the domesticated entity that are to be in a record immediately after the domestication becomes effective, including any proposed amendments to the organizational documents of the domesticating entity that are to be in a record immediately after the domestication becomes effective.

SB566,186,22 (2) In addition to the requirements of sub. (1), a plan of domestication may contain any other provision relating to the domestication and not prohibited by law.

SB566,186,25 179.1153 Approval of domestication; amendment; abandonment. (1) (a) Subject to s. 179.1161, a plan of domestication must be approved by a vote or consent of all of the following with respect to a domesticating Wisconsin limited partnership:

SB566,187,1 1. All general partners.

SB566,187,3 2. Partners owning a majority of the rights to receive distributions, whether as a general partner, limited partner, or both.

SB566,187,5 (b) A plan of domestication of a non-United States domesticating entity must be approved pursuant to the governing law of the domesticating entity.

SB566,187,11 (2) Subject to s. 179.1161 and the governing law of the domesticating entity, after a plan of domestication is approved, and at any time before a domestication becomes effective, except as otherwise provided in the plan of domestication, the domesticating entity may amend the plan of domestication or abandon the domestication as provided in the plan of domestication with the same vote or consent as was required to approve the plan of domestication.

SB566,187,19 (3) If, after articles of domestication have been delivered to the department for filing and before the domestication becomes effective, the plan of domestication is amended in a manner that requires an amendment to the articles of domestication or if the domestication is abandoned, a statement of amendment or abandonment, signed by the domesticating entity, must be delivered to the department for filing before the domestication becomes effective. When a statement of abandonment becomes effective, the domestication is abandoned and does not become effective. The statement of amendment or abandonment must contain all of the following:

SB566,187,21 (a) The name of the domesticating entity and the domesticated entity under the plan of domestication.

SB566,187,22 (b) The amendment to or abandonment of the articles of domestication.

SB566,187,24 (c) A statement that the amendment or abandonment was approved in accordance with this section.

SB566,188,4 179.1154 Filings required for domestication; effective date. (1) After the domesticating entity has approved a plan of domestication in accordance with its governing law, the domesticating entity shall deliver, or cause to be delivered, to the department for filing articles of domestication setting forth all of the following:

SB566,188,5 (a) The name, type of entity, and governing law of the domesticating entity.

SB566,188,6 (b) The name, type of entity, and governing law of the domesticated entity.

SB566,188,8 (c) A statement that a plan of domestication has been approved and adopted by the domesticating entity in accordance with its governing law.

SB566,188,11 (d) Any amendments to the organizational documents of the domesticating entity and any organizational documents of the domesticated entity that are to be in a public record under their respective governing laws.

SB566,188,13 (e) A statement that the plan of domestication is on file at the principal office of the domesticated entity.

SB566,188,15 (f) A statement that upon request the domesticated entity will provide a copy of the plan of domestication to any interest holder in the domesticated entity.

SB566,188,16 (g) A statement whether s. 179.1161 applies to the domestication.

SB566,188,19 (2) In addition to the requirements of sub. (1), the articles of domestication may contain any other provisions relating to the domestication, as determined by the domesticating entity in accordance with the plan of domestication.

SB566,188,21 (3) A domestication takes effect at the effective date and time of the articles of domestication.

SB566,188,23 179.1155 Effect of domestication. (1) When a domestication becomes effective, all of the following apply:

SB566,189,2 (a) The domesticating entity becomes a domestic entity under and becomes subject to the governing law of the jurisdiction in which it has domesticated while continuing to be a domestic organization under and subject to the governing law of the domesticating entity.

SB566,189,4 (am) 1. Except as provided in this paragraph, no interest holder shall have interest holder liability with respect to the domesticating or domesticated entity.

SB566,189,10 2. If, under the governing law of the domesticating entity, one or more of the interest holders thereof has interest holder liability with respect to the domesticating entity, such interest holder or holders shall continue to have such liability and any associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the domesticating entity.

SB566,189,16 3. If, under the governing law of the domesticated entity, one or more of the interest holders thereof will have interest holder liability after the domestication with respect to the domesticated entity, such interest holder or holders will have such liability and associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the domesticated entity that accrue after the domestication.

SB566,189,17 4. This paragraph does not affect liability under any taxation laws.

SB566,189,19 (b) The title to all property owned by the domesticating entity is vested in the domesticated entity without transfer, reversion, or impairment.

SB566,189,21 (c) The domesticated entity has all debts, obligations, or other liabilities of the domesticating entity.

SB566,189,25 (d) A civil, criminal, or administrative proceeding pending by or against the domesticating entity may be continued as if the domestication did not occur, or the domesticated entity may be substituted in the proceeding for the domesticating entity.

SB566,190,4 (e) The organizational documents of the domesticating entity are amended to the extent, if any, provided in the plan of domestication and, to the extent such amendments are to be reflected in a public record, as provided in the articles of domestication.

SB566,190,7 (f) The organizational documents of the domesticated entity are as provided in the plan of domestication and, to the extent such organizational documents are to be reflected in a public record, as provided in the articles of domestication.

SB566,190,10 (g) Except as prohibited by other law or as otherwise provided in the articles and plan of domestication, all of the rights, privileges, immunities, powers, and purposes of the domesticating entity vest in the domesticated entity.

SB566,190,14 (2) Except as otherwise provided in the articles and plan of domestication, if the domesticating entity is a partnership, limited liability company, or other entity subject to dissolution under its governing law, the domestication does not dissolve the domesticating entity for the purposes of its governing law.

SB566,190,17 (3) A domesticated Wisconsin entity consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed by the domesticating or domesticated entity.

SB566,190,23 179.1161 Restrictions on approval of mergers, interest exchanges, conversions, and domestications. (1) This section shall apply with respect to a partner in connection with a merger, interest exchange, conversion, or domestication transaction of a domestic limited partnership if the partner does not vote for or consent to the transaction and the transaction would do any of the following with respect to the partner:

SB566,191,5 (a) Materially increase the current or potential obligations of the partner with respect to any constituent, surviving, acquiring, acquired, converting, converted, domesticating, or domesticated limited partnership, whether as a result of becoming subject to interest holder liability with respect to the entity as a consequence of being an owner of the entity, becoming subject to affirmative or negative obligations under the organizational documents of the entity, becoming subject to tax on the income of the entity, or otherwise.

SB566,191,7 (b) Treat the partner's interests in the limited partnership in a manner different from the interests of the same class held by any other partner.

SB566,191,17 (2) If this section applies with respect to a partner in connection with the transaction, the partnership must offer to purchase the partner's interest in the partnership as provided in sub. (3). Actual or alleged failure to comply with this section shall not have any impact on, and shall not constitute any basis for any person to challenge, the effectiveness of the transaction, and the partner's sole remedy with respect to such failure shall be to commence an action under sub. (4) and otherwise enforce the partner's rights under this section. In order to accept the partnership's offer, a partner must notify the partnership within 60 days of receipt of the offer. Both the offer and the acceptance may be conditioned upon consummation of the transaction.

SB566,191,23 (3) (a) The purchase price of the interest of the partner pursuant to this section is the amount that would be distributable to the partner if, on the date of the transaction, the assets of the partnership were sold and the partnership were wound up, with the sale price equal to the greater of the partnership's liquidation value or the value based on a sale of the partnership's entire activities and affairs as a going concern without the partner.

SB566,192,2 (b) Interest accrues on the purchase price from the date of the transaction to the date of payment. At the option of the partnership, some or all amounts owing, whether or not presently due, from the partner to the partnership may be offset against the purchase price.

SB566,192,6 (c) The partnership shall defend, indemnify, and hold the partner harmless against all liabilities of the surviving, acquiring, converted, or domesticated entity, as the case may be, incurred after the transaction, except liabilities incurred by an act of the partner.

SB566,192,11 (d) If no agreement for the purchase of the interest of the partner pursuant to this section is reached within 120 days of the date of the transaction, the partnership, or the surviving, acquiring, converted, or domesticated entity, as the case may be, shall pay, or cause to be paid, in money to the partner the amount it estimates to be the purchase price and accrued interest, reduced by any offsets under par. (b).

SB566,192,13 (e) The payment required by par. (d) must be accompanied by all of the following:

SB566,192,15 1. A statement of partnership assets and liabilities as of the date of the transaction.

SB566,192,16 2. The latest available partnership balance sheet and income statement, if any.

SB566,192,17 3. An explanation of how the estimated amount of the payment was calculated.

SB566,192,21 4. Written notice that the payment is in full satisfaction of the obligation to purchase unless, not later than 120 days after the written notice, the partner commences an action to determine the purchase price, any offsets and accrued interest under par. (b), or other terms of the obligation to purchase.

SB566,193,9 (4) The partner may maintain an action against the partnership, pursuant to s. 179.0111, to determine the purchase price of the partner's interest, any offsets and accrued interest under sub. (3) (b), or other terms of the obligation to purchase. The action must be commenced not later than 120 days after the partnership has made payment in accordance with sub. (3) (d) or within one year after written demand for payment if no offer is made in accordance with sub. (2). The court shall determine the purchase price of the partner's interest, any offset due under sub. (3) (b), and accrued interest, and enter judgment for any additional payment or refund. The court may assess reasonable attorney fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good faith. The finding may be based on the partnership's failure to make an offer or payment or to comply with sub. (3).

SB566,193,11 (5) A partner does not give the consent required by sub. (1) merely by consenting to a provision of the written partnership agreement.

SB566,193,12 subchapter XII