KRS § 275.376 — KY Code / Title XXIII / Chapter 275 / Section 275.376
275.376 Conversion of corporation or foreign corporation to limited liability company
Status: in_force

275.376 Conversion of corporation or foreign corporation to limited liability

company.

(1) A corporation may be converted to a limited liability company pursuant to this

section.

(2) The terms and conditions of the conversion of a corporation to a limited liability

company shall be set forth in a written plan of conversion and approved by the

board of directors and by the shareholders of the corporation.

(3) The plan of conversion shall set forth:

(a) The name of the corporation planning to convert;

(b) The terms and conditions of the conversion, including the articles of

organization and the written operating agreement, if any, of the limited

liability company into which the corporation will convert; and

(c) The manner and basis of converting the shares of the corporation into

membership interests, obligations, or other securities of the limited liability

company or into cash or other property in whole or part.

(4) The plan of conversion may set forth any other provision relating to the conversion.

(5) For a plan of conversion to be approved:

(a) The board of directors shall recommend the plan of conversion to the

shareholders, unless the board of directors determines that, because of conflict

of interest or other special circumstances, it should make no recommendation

and communicates the basis for its determination to the shareholders with a

plan; and

(b) The shareholders entitled to vote shall approve the plan.

(6) The board of directors may condition its submission of the proposed conversion on

any basis.

(7) The corporation shall notify each shareholder, whether or not entitled to vote, of the

proposed shareholders' meeting in accordance with KRS 271B.7-050. The notice

shall also state that the purpose, or one (1) of the purposes, of the meeting is to

consider the plan of conversion and contain or be accompanied by a copy or

summary of the plan.

(8) Unless KRS Chapter 271B, the articles of incorporation, or the board of directors

acting pursuant to subsection (6) of this section, require a greater vote or vote by

voting groups, the plan of conversion to be authorized shall be approved by each

voting group entitled to vote separately on the plan by a majority of all the votes

entitled to be cast on the plan by that voting group.

(9) Separate voting by voting groups shall be required on a plan of conversion if the

plan contains a provision that, if contained in a proposed amendment to the articles

of incorporation, would require action by one (1) or more separate voting groups on

the proposed amendment under KRS 271B.10-040.

(10) After a conversion is authorized, and at any time before articles of organization are

filed, the planned conversion may be abandoned subject to any contractual rights,

without further shareholder action, in accordance with the procedure set forth in the

plan of conversion or, if none is set forth, in the manner determined by the board of

directors.

(11) After the conversion is approved, the corporation shall file articles of organization

with the office of the Secretary of State that satisfy the requirements of KRS

275.025 and also include:

(a) A statement that the corporation was converted to a limited liability company;

(b) Its former name; and

(c) The designation, number of outstanding shares, and number of votes to be cast

by each voting group entitled to vote separately on the plan of conversion and

either the total number of undisputed votes cast for the plan separately by each

voting group or a statement that the number cast for the plan by each voting

group was sufficient for approval by that voting group.

(12) The conversion shall take effect when the articles of organization are filed with the

office of the Secretary of State or, subject to KRS 14A.2-070, at a later date

specified in the articles of organization.

(13) Both a nonprofit corporation organized under the laws of the Commonwealth and a

foreign nonprofit corporation, if not forbidden by the laws of its jurisdiction of

organization, may convert into a nonprofit limited liability company, except that the

only member or members of the converted nonprofit limited liability company shall

be organizations qualified under Section 501(c)(3) or 501(c)(4) of the Internal

Revenue Code. The articles of organization filed to effect this conversion, in

addition to the otherwise applicable requirements, shall contain an affirmative

statement that the only member or members of the converted nonprofit limited

liability company are qualified under Section 501(c)(3) or 501(c)(4) of the Internal

Revenue Code.