2023 Laws of Puerto Rico › TITLE FOURTEEN - Private Corporations (§§ 1 — 4084) › Subtitle 5 - General Corporations Act (2009) › Chapter 230 - Merger or Consolidation (§§ 3731 — 3746) › § 3746 - Conversion of a domestic corporation to other entities

(a) Upon the authorization of such conversion in accordance with this section, a domestic corporation may convert to a limited liability company, trust, business trust or association, real estate investment trust or any other unincorporated business including a partnership (whether general (including a limited liability partnership) or limited (including a limited liability limited partnership)) or a foreign corporation.
(b) The board of directors of the corporation which desires to convert under this § 3503 of this title shall adopt a resolution approving such conversion, specifying the type of entity into which the corporation shall be converted and recommending the approval of such conversion by the stockholders of the corporation. Such resolution shall be submitted to the stockholders of the corporation at an annual or special meeting. Due notice of the date, time, and purpose of the meeting shall be mailed to each holder of stock, whether voting or nonvoting, of the corporation at the address of the stockholder as it appears on the records of the corporation, at least twenty (20) days prior to the date of the meeting. At the meeting, the resolution shall be considered and a vote taken for its adoption or rejection. If all outstanding shares of stock of the corporation, whether voting or nonvoting, shall be voted for the adoption of the resolution, the conversion shall be authorized.
(c) If a corporation shall convert to another entity organized, formed or created under the laws of a jurisdiction other than Puerto Rico, the corporation shall file with the Department of State a certificate of conversion executed in accordance with § 3503 of this title, which certifies:
(1) The name of the corporation, and if it has been changed, the name under which it was originally incorporated;
(2) the date of filing of its original certificate of incorporation with the Secretary of State;
(3) the name and jurisdiction of the entity to which the corporation shall be converted;
(4) that the conversion has been approved in accordance with the provisions of this section;
(5) the agreement of the corporation that it may be served with process in the Commonwealth of Puerto Rico in any action, suit or proceeding for enforcement of any obligation of the corporation arising while it was a domestic corporation, and that it irrevocably appoints the Secretary of State as its agent to accept service of process in any such action, suit or proceeding, and
(6) the address to which a copy of the process referred to in clause (5) of this subsection shall be mailed to it by the Secretary of State. In the event of such service upon the Secretary of State in accordance with clause (5) of this subsection, the Secretary of State shall forthwith notify such corporation that has converted out of the Commonwealth of Puerto Rico by certified mail, return receipt requested, directed to such corporation that has converted out of the Commonwealth of Puerto Rico at the address so specified, unless such corporation shall have designated in writing to the Secretary of State a different address for such purpose, in which case it shall be mailed to the last address designated. Such mail shall enclose a copy of the process and any other document or documents served with the Secretary of State pursuant to this subsection. It shall be the duty of the plaintiff in the event of such service to serve process and any other documents in duplicate, to notify the Secretary of State that service is being effected pursuant to this subsection and to pay the Secretary of State the sum payable established in Chapter 237 of this subtitle, which sum shall be imposed as part of the costs in the proceeding. The Secretary of State shall maintain an alphabetical record of any such service setting forth the name of the plaintiff and the defendant, the title, docket number and nature of the proceeding in which process has been served with the Secretary of State, the fact that service has been effected pursuant to this subsection, the return date thereof, and the day and hour service was made. The Secretary of State shall not be required to retain such information longer than five (5) years from receipt of the service of process.
(d) Upon the filing with the Secretary of State of a certificate of conversion of a domestic corporation into an entity from other jurisdiction in accordance with subsection (c) of this section or upon the future effective date of the certificate of conversion and payment to the Secretary of State of all fees prescribed under this subtitle, the Secretary of State shall certify that the corporation has filed all documents and paid all fees required by this subtitle, and thereupon the corporation shall cease to exist as a domestic corporation at the time the certificate of conversion becomes effective in accordance with § 3503 of this title.
(e) The conversion of a corporation out of the Commonwealth of Puerto Rico in accordance with this section and the resulting cessation of its existence as a domestic corporation pursuant to a certificate of conversion to an entity of another jurisdiction shall not be deemed to affect any obligations or liabilities of the corporation incurred prior to such conversion or the personal liability of any person incurred prior to such conversion, nor shall it be deemed to affect the choice of law applicable to the corporation with respect to matters arising prior to such conversion.
(f) Unless otherwise provided in a resolution of conversion adopted in accordance with this section, the converting corporation shall not be required to settle its affairs or pay its liabilities and distribute its assets, and the conversion shall not constitute dissolution of such corporation.
(g) In connection with a conversion of a domestic corporation to another entity pursuant to this section, shares of stock, of the domestic corporation which is to be converted may be exchanged for or converted into cash, property, rights or securities of, or interests in, the entity to which the domestic corporation is being converted or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights or securities, shares of stock of, or interests in, another domestic corporation or other entity or may be cancelled.
(h) When a domestic corporation has been converted to another entity or business form pursuant to this section, the other entity or business form shall, for all purposes of the laws of Puerto Rico, be deemed to be the same entity as the corporation. When any conversion shall have become effective under this section, for all purposes of the laws of Puerto Rico, all of the rights, privileges and powers of the domestic corporation that has converted, and all property, real, personal and mixed, and all debts due to such corporation, as well as all other things and causes of action belonging to such corporation, shall be the property of such other entity or business form, and the title to any real property vested by deed or otherwise in such corporation shall not revert or be in any way impaired by reason of this subtitle; but all rights of creditors and all liens upon any property of such corporation shall be preserved unimpaired, and all debts, liabilities, and duties of the corporation that has converted shall remain attached to the other entity or business form to which such corporation has converted, and may be enforced against it to the same extent as if said debts, liabilities, and duties had originally been incurred or contracted by it in its capacity as such other entity or business form. The rights, privileges, powers, and interest in property of the corporation that has converted, as well as the debts, liabilities and duties of such corporation, shall not be deemed, as a consequence of the conversion, to have been transferred to the other entity or business form to which such corporation has converted for any purpose of the laws of Puerto Rico.
(i) No vote of stockholders of a corporation shall be necessary to authorize a conversion if no shares of the stock of such corporation shall have been issued prior to the adoption by the board of directors of the resolution approving the conversion.
History —Dec. 16, 2009, No. 164, § 10.16.