Conversion

Conversion is a TBOC-authorized transaction in which a business entity changes its form (e.g., LLC to corporation, corporation to LLC, partnership to LLC) or its jurisdiction of formation (e.g., Delaware corporation to Texas corporation) without dissolving and reforming. The converted entity is the same legal person before and after the conversion; contracts, debts, and liabilities continue uninterrupted.

Plan of conversion

Under § 10.103, the plan of conversion must specify the name of the converting and converted entity, their respective forms, the manner of converting interests, and the certificate of formation or governing documents of the converted entity. The plan must be approved as required by the converting entity's governing documents and the TBOC (for a corporation, a conversion is a fundamental business transaction requiring the vote of at least two-thirds of the outstanding shares entitled to vote, unless the certificate of formation sets a lower vote that is not less than a majority).

Effect of conversion (§ 10.106)

On the effective date: (1) the converting entity continues to exist in the converted form; (2) all property owned by the converting entity continues to be owned by the converted entity, subject to existing liens, without reversion, further deed, or any transfer or assignment; (3) all debts, liabilities, and obligations of the converting entity continue as obligations of the converted entity; and (4) all proceedings pending against the converting entity continue against the converted entity.