13.1-722.11 - Action on plan of entity conversion.
§ 13.1-722.11. Action on plan of entity conversion.
A. In the case of a corporation that is a converting entity:
1. The board of directors of the converting entity shall adopt the plan ofentity conversion.
2. After adopting the plan of entity conversion, the board of directors shallsubmit the plan for approval by the shareholders.
3. For the conversion to be approved:
a. The board of directors shall recommend the plan to the shareholders unlessthe board of directors determines that because of conflicts of interest orother special circumstances it should make no recommendation and communicatesthe basis of its determination to the shareholders with the plan; and
b. The shareholders shall approve the plan as provided in subdivision 6.
4. The board of directors may condition its submission of the plan of entityconversion to the shareholders on any basis.
5. The corporation shall notify each shareholder, whether or not entitled tovote, of the proposed shareholders' meeting in accordance with § 13.1-658 atwhich the plan of entity conversion is to be submitted for approval. Thenotice shall also state that the purpose, or one of the purposes, of themeeting is to consider the plan and shall contain or be accompanied by a copyof the plan.
6. Unless this chapter or the board of directors, acting pursuant tosubdivision 4, requires a greater vote, the plan of entity conversion shallbe approved by each voting group entitled to vote on the plan by more thantwo-thirds of all the votes entitled to be cast by that voting group. Thearticles of incorporation may provide for a greater or lesser vote than thatprovided for in this subsection or a vote by separate voting groups so longas the vote provided for is not less than a majority of all the votes cast onthe plan by each voting group entitled to vote on the plan at a meeting atwhich a quorum of the voting group exists.
B. In the case of a limited liability company that is a converting entity,the plan of entity conversion shall be approved by the members of the limitedliability company in the manner provided in the limited liability company'soperating agreement or articles of organization for amendments or, if no suchprovision is made in an operating agreement or articles of organization, bythe unanimous vote of the members of the limited liability company.
(2001, c. 545; 2002, c. 1.)