47-25A-21. Effect of conversion of domestic business corporation to domestic nonprofit corporation. (a) When a conversion of a domestic business corporation to a domestic nonprofit corporation becomes effective:

(1) The title to all real and personal property, both tangible and intangible, of the corporation remains in the corporation without reversion or impairment;

(2) The liabilities of the corporation remain the liabilities of the corporation;

(3) An action or proceeding pending against the corporation continues against the corporation as if the conversion had not occurred;

(4) The articles of conversion, or the articles of incorporation attached to the articles of conversion, constitute the articles of incorporation of the corporation;

(5) Memberships, securities, obligations, rights to acquire memberships or securities of the corporation, or cash or other property shall be issued or paid as provided pursuant to the laws of this state; and

(6) The corporation is deemed to:

(i) Be a domestic nonprofit corporation for all purposes; and

(ii) Be the same corporation without interruption.

(b) The personal liability of a shareholder of the domestic business corporation who becomes a member of the domestic nonprofit corporation in the conversion is as follows:

(1) The conversion does not discharge any personal liability under the laws of this state to the extent any such personal liability arose before the effective time of the articles of conversion;

(2) The member does not have personal liability under the laws of this state for any debt, obligation, or liability of the corporation that arises after the effective time of the articles of conversion;

(3) The provisions of the laws of this state continue to apply to the collection or discharge of any personal liability preserved by subdivision (1), as if the conversion had not occurred;

(4) The member has whatever rights of contribution from other members are provided by the laws of this state with respect to any personal liability preserved by subdivision (1), as if the conversion had not occurred.

(c) A shareholder of a domestic business corporation who becomes subject to personal liability for some or all of the debts, obligations, or liabilities of the corporation as a result of its conversion in this state has personal liability only for those debts, obligations, or liabilities of the corporation that arise after the effective time of the articles of conversion.

Source: SL 2016, ch 221, § 36.