ARIZONA HOUSE OF REPRESENTATIVES

HB 2505: converted entities; claims

PRIME SPONSOR: Representative Cobb, LD 5

BILL STATUS: House Engrossed

Abstract

Relating to converted entities.

Provisions

1. Limits who can bring a claim for specified dissolutions or receivership against a converted entity to only a governor or interest holder in the converted entity when a conversion become effective. (Sec. 1)

Current Law

A.R.S. Title 29, Chapter 6, Article 4 outlines the procedures for a domestic entity to become an entity of a different type. The domestic entity may covert by approving a plan of conversion that must be in a record and contain specified information that includes the manner of converting interest, securities, obligations and rights. The plan must then be approved in accordance with the requirements of the entity's governing statutes and organizational documents. Upon a plan's approval, a statement of conversion is required to be submitted to the appropriate filing authority. The conversion is complete upon approval from the appropriate filing authority.

A.R.S. §-2406 outlines the impact of a conversion becoming effective. These effects include: 1) the converted entity is organized under and subject to the governing statutes of the converted entity; 2) the converted entity is the same entity without interruption as the converting entity; 3) all obligations of the converting entity continue as obligations of the converted entity; 4) all rights, privileges, immunities, powers and purposes of the converting entity remain in the converted entity, unless provided by another law or the plan of conversion; and 5) the name of the converted entity may be substituted for the name of the converting entity in any pending action or processing.

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Fifty-third Legislature                  HB 2505

Second Regular Session                               Version 3: House Engrossed

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