sb469_Committee_sub_LC_29_2198S

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06 LC 29 2198S

The Senate Special Judiciary Committee offered the following substitute to SB 469:

A BILL TO BE ENTITLED
AN ACT

To amend Title 14 of the Official Code of Georgia Annotated, relating to corporations, partnerships, and associations, so as to provide for the updating of provisions relating to corporations, partnerships, and associations; to provide confirmation when an order for relief with respect to a corporation has been entered pursuant to the federal Bankruptcy Code of the power and authority of such corporation to take action pursuant to the decree of order or the court or judge in such bankruptcy proceedings; to provide that a board of directors can commit a corporation to submit a matter for shareholder approval even if the board of directors subsequently determines to recommend against it later; to correct cross-references; to change certain provisions relating to court ordered indemnification and advancement for expenses; to confirm the authority of a court to order advancement of expenses before determining a directoŕs ultimate entitlement to indemnification; to provide statutory rules of construction for language frequently used in mandatory indemnification provisions; to change certain provisions relating to amendment to articles of incorporation by board of directors and shareholders; to repeal certain provisions relating to amendment to articles of incorporation pursuant to reorganization; to clarify existing law by expressly recognizing the possibility of different treatment of shareholders in a plan of merger of share exchange; to change certain provisions relating to merger; to change certain provisions relating to share exchange; to change certain provisions relating to action on plan of merger; to change certain provisions relating to merger with subsidiary; to change certain provisions relating to merger with other entities; to change certain provisions relating to election to become limited liability company; to streamline the process of permitting an entity to convert from one form into another; to allow entities organized in other states to convert to certain corporations or partnerships in this state; to change certain provisions relating to sale of assets requiring shareholder approval; to change certain provisions relating to right to dissent; to change provisions relating to dissolution by board of directors and shareholders; to change certain provisions relating to amended certificate of authority; to change certain provisions relating to corporate name of foreign corporation; to change certain provisions relating to election to become a limited partnership; to change certain provisions relating to certificate of authority for foreign limited partnerships; to change certain provisions relating to change of name or state of organization; to change certain provisions relating to amended certificate required for change of name or jurisdiction of organization; to change certain provisions relating to election to become a limited liability company; to add a filing fee for entity conversion; to change certain provisions relating to right to dissent; to provide for related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Title 14 of the Official Code of Georgia Annotated, relating to corporations, partnerships, and associations, is amended by adding a new Code Section 14-2-104 to the end of Part 1 of Article 1 of Chapter 2, relating to short title and reservation of power, to read as follows:

"14-2-104.

(a) Any corporation, an order for relief with respect to which has been entered pursuant to the federal Bankruptcy Code (11 U.S.C. Section 101, et seq.), may put into effect and carry out any decrees and orders of the court or judge in such bankruptcy proceeding and may take any corporate action provided or directed by such decrees and orders, without further action by its directors or shareholders. Such power and authority may be exercised, and such corporate action may be taken, as may be directed by such decrees and orders, by the trustee or trustees of such corporation appointed or elected in the bankruptcy proceeding, or a majority thereof, or, if none be appointed or elected and acting, by designated officers of the corporation, or by a representative appointed by the court or judge, with like effect as if exercised and taken by unanimous action of the directors and shareholders of the corporation.

(b) Such corporation may, in the manner provided in subsection (a) of this Code section, but without limiting the generality or effect of the foregoing, alter, amend, or repeal its bylaws; constitute or reconstitute and classify or reclassify its board of directors, and name, constitute, or appoint directors and officers in place of or in addition to all or some of the directors or officers then in office; amend its articles of incorporation, and make any change in its shares, or any other amendment, change, or alteration, or provision, authorized by this chapter; be dissolved, transfer all or part of its assets, merge or effect any share exchange in connection with any action taken under this Code section; change the location of its registered office, change its registered agent, and remove or appoint any agent to receive service of process; authorize and fix the terms, manner, and conditions of, the issuance of bonds, debentures, or other obligations, regardless of whether convertible into shares of any class or series, or bearing warrants or other evidences of optional rights to purchase or subscribe for shares of any class or series; or lease its property and franchises to any corporation, if permitted by law. No shareholder shall have the right to dissent under Article 13 of this chapter with respect to such shareholdeŕs shares in connection with any action taken under this Code section.

(c) Articles or a certificate of any amendment, correction, merger, share exchange, or dissolution, made by such corporation pursuant to this Code section, shall be filed with the Secretary of State in accordance with Code Section 14-2-120, and, subject to Code Section 14-2-123 and subsection (c) of Code Section 14-2-124, shall thereupon become effective in accordance with its terms and the provisions thereof. Such articles, certificate, or other instrument shall be made, executed, and acknowledged, as may be directed by such decrees and orders, by the trustee or trustees appointed or elected in the bankruptcy proceeding, or a majority thereof, or, if none be appointed or elected and acting, by the officers of the corporation, or by a representative appointed by the court or judge, and shall certify that provision for the making of such articles, certificate, or instrument is contained in a decree or order of a court or judge having jurisdiction of a proceeding under the federal Bankruptcy Code.

(d) This Code section shall cease to apply to such corporation upon the entry of a final decree in the bankruptcy proceeding closing the case and discharging the trustee or trustees, if any; provided, however, that the closing of a case and discharge of trustee or trustees, if any, will not affect the validity of any act previously performed pursuant to subsection (a), (b), or (c) of this Code section.

(e) On filing any articles, certificate, report, or other paper made or executed pursuant to this Code section, there shall be paid to the Secretary of State for the use of the state the same fees as are payable by corporations not in bankruptcy upon the filing of like articles, certificates, agreements, reports, or other papers."

SECTION 2.

Said title is further amended by adding a new Code Section 14-2-305 to the end of Article 3 of Chapter 2, relating to purposes and powers of business corporations, to read as follows:

"14-2-305.

Subject to the requirements set forth in paragraph (1) of subsection (b) of Code Section 14-2-1003, with respect to the submission of amendments to the articles of incorporation to shareholders; paragraph (1) of subsection (b) of Code Section 14-2-1103, with respect to the submission of a plan of merger or share exchange to shareholders; paragraph (1) of subsection (b) of Code Section 14-2-1202, with respect to the submission of a disposition of assets requiring shareholder approval to shareholders; and paragraph (1) of subsection (b) of Code Section 14-2-1402, with respect to the submission of a proposed dissolution to shareholders, a corporation may agree to submit a matter to a vote of its shareholders regardless of whether the board of directors determines at any time subsequent to adopting or approving such matter that such matter is no longer advisable and recommends that the shareholders reject or vote against the matter."

SECTION 3.

Said title is further amended by striking paragraph (2) of subsection (b) of Code Section 14-2-401, relating to corporate name, and inserting in lieu thereof the following:

"(2) A corporate name reserved or registered under Code Section 14-2-402 or 14-2-403;"

SECTION 4.

Said title is further amended by striking Code Section 14-2-854, relating to court ordered indemnification and advances for expenses, and inserting in lieu thereof the following:

"14-2-854.

(a) A director who is a party to a proceeding because he or she is a director may apply for indemnification or advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application and after giving any notice it considers necessary, the court shall:

(1) Order indemnification or advance for expenses if it determines that the director is entitled to indemnification or advance for expenses under this part; or

(2) Order indemnification or advance for expenses if it determines, in view of all the relevant circumstances, that it is fair and reasonable to indemnify the director or to advance expenses to the director, even if the director has not met the relevant standard of conduct set forth in subsections (a) and (b) of Code Section 14-2-851, failed to comply with Code Section 14-2-853, or was adjudged liable in a proceeding referred to in paragraph (1) or (2) of subsection (d) of Code Section 14-2-851, but if the director was adjudged so liable, the indemnification shall be limited to reasonable expenses incurred in connection with the proceeding.

(b) If the court determines that the director is entitled to indemnification or advance for expenses under this part paragraph (1) of subsection (a) of this Code section, it may shall also order the corporation to pay the directoŕs reasonable expenses to obtain court-ordered court ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under paragraph (2) of subsection (a) of this Code section, it may also order the corporation to pay the directoŕs reasonable expenses to obtain court ordered indemnification or advance for expenses.

SECTION 5.

Said title is further amended by striking Code Section 14-2-859, relating to application of part, and inserting in lieu thereof the following:

"14-2-859.

(a) A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification or advance funds to pay for or reimburse expenses consistent with this part. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in subsection (c) of Code Section 14-2-853 or subsection (c) of Code Section 14-2-855. Any such provision that obligates the corporation to provide indemnification to the fullest extent permitted by law shall be deemed to obligate the corporation to advance funds to pay for or reimburse expenses in accordance with Code Section 14-2-853 to the fullest extent permitted by law, unless the provision specifically provides otherwise.

(b) Any provision pursuant to subsection (a) of this Code section shall not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for indemnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors or shareholders, partners, or, in the case of limited liability companies, members or managers of a predecessor of the corporation or other entity in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by paragraph (3) of subsection (a) of Code Section 14-2-1106.

(c) A corporation may, by a provision in its articles of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to this part.

(d) This part does shall not limit a corporatiońs power to pay or reimburse expenses incurred by a director or an officer in connection with his or her appearance as a witness in a proceeding at a time when he or she is not a party.

(e) Except as expressly provided in Code Section 14-2-857, this part does shall not limit a corporatiońs power to indemnify, advance expenses to, or provide or maintain insurance on behalf of an employee or agent.

(f) Any provision in a corporatiońs articles of incorporation or bylaws or in a resolution adopted or contract approved by its board of directors or shareholders that obligates the corporation to provide indemnification to the fullest extent permitted by law shall, unless such provision or another provision in the corporatiońs articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders expressly provides otherwise, be deemed to obligate the corporation:

(1) To advance funds to pay for or reimburse expenses in accordance with Code Section 14-2-853 to the fullest extent permitted by law; and

(2) To indemnify directors to the fullest extent permitted in Code Section 14-2-856, provided that such provision is duly authorized as required in subsection (a) of Code Section 14-2-856, and to indemnify officers to the fullest extent permitted in paragraph (2) of subsection (a) and subsection (b) of Code Section 14-2-857."

SECTION 6.

Said title is further amended by striking paragraph (1) of subsection (b) of Code Section 14-2-1003, relating to amendment by board of directors and shareholders, and inserting in lieu thereof the following:

"(1) The board of directors must recommend the amendment shall also transmit to the shareholders a recommendation that the shareholders approve the amendment, unless the board of directors elects makes a determination that, because of a conflict conflicts of interest or other special circumstances, to make no recommendation and communicates the basis for its election to the shareholders with the amendment it should either refrain from making such a recommendation or recommend that the shareholders reject or vote against the amendment, in which case the board of directors shall transmit to the shareholders the basis for such determination; and"

SECTION 7.

Said title is further amended by striking Code Section 14-2-1008, relating to amendment pursuant to reorganization, and inserting in lieu thereof the following:

"14-2-1008.

(a) A corporatiońs articles of incorporation may be amended without action by the board of directors or shareholders to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under federal statute if the articles of incorporation after amendment contain only provisions required or permitted by Code Section 14-2-202.

(b) The individual or individuals designated by the court shall deliver to the Secretary of State for filing articles of amendment setting forth:

(1) The name of the corporation;

(2) The text of each amendment approved by the court;

(3) The date of the court́s order or decree approving the articles of amendment;

(4) The title of the reorganization proceeding in which the order or decree was entered; and

(5) A statement that the court had jurisdiction of the proceeding under federal statute.

(c) Shareholders of a corporation undergoing reorganization do not have dissenterś rights except as and to the extent provided in the reorganization plan.

(d) This Code section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan. Reserved."

SECTION 8.

Said title is further amended by striking Code Section 14-2-1101, relating to merger, and inserting in lieu thereof the following:

"14-2-1101.

(a) One or more corporations may merge into another corporation if the board of directors of each corporation adopts and its shareholders (if required by Code Section 14-2-1103) approve a plan of merger.

(b) The plan of merger must set forth:

(1) The name of each corporation planning to merge and the name of the surviving corporation into which each other corporation plans to merge;

(2) The terms and conditions of the merger; and

(3) The manner and basis of converting the shares of each corporation into shares or other securities, obligations, rights to acquire shares or other securities, of the surviving or any other corporation or into cash or other property in whole or in part cash, other property, or any combination of the foregoing, and if any shares of any holder of a class or series of shares are to be converted in a manner or basis different from any other holder of shares of such class or series, the manner or basis applicable to each such holder.

(1) Amendments to the articles of incorporation of the surviving corporation; and

(2) A provision that the plan may be amended prior to the time the merger has become effective, but if shareholders of a corporation that is a party to the merger are required or permitted to vote on the plan, subsequent to approval of the plan by such shareholders the plan may not be amended to change in any respect not expressly authorized by such shareholders in connection with the approval of the plan:

(A) The amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property to be received under the plan by the shareholders of any party to the merger if such change would adversely affect such shareholders;

(B) The articles of incorporation of any corporation that will survive as a result of the merger, except for changes permitted by Code Section 14-2-1002 or changes that would not adversely affect such shareholders; or

(C) Any of the other terms or conditions of the plan if such change would adversely affect such shareholders in any material respect; and

in the event that the plan of merger is amended after articles or a certificate of merger has been filed with the Secretary of State but before the merger has become effective, a certificate of amendment of merger executed on behalf of each party to the merger by an officer or other duly authorized representative shall be delivered to the Secretary of State for filing prior to the effectiveness of the merger; and

(3) Other provisions relating to the merger.

(d) Any of the terms of the plan of merger may be made dependent upon facts ascertainable outside of the plan of merger, provided that the manner in which such facts shall operate upon the terms of the merger is clearly and expressly set forth in the plan of merger. As used in this subsection, the term 'facts' includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation."

SECTION 9.

Said title is further amended by striking Code Section 14-2-1102, relating to share exchange, and inserting in lieu thereof the following:

"14-2-1102.

(a) A corporation may acquire all of the outstanding shares of one or more classes or series of another corporation through a share exchange if the board of directors of each corporation adopts and its shareholders (if required by Code Section 14-2-1103) approve the share exchange.

(b) The plan of share exchange must set forth:

(1) The name of the corporation whose shares will be acquired and the name of the acquiring corporation;

(2) The terms and conditions of the share exchange; and

(3) The manner and basis of exchanging the shares to be acquired for shares, or other securities, obligations, rights to acquire shares or other securities, of the acquiring or any other corporation or for cash or other property in whole or in part cash, other property, or any combination of the foregoing, and if any shares of any holder of a class or series of shares are to be exchanged in a manner or basis different from any other holder of shares of such class or series, the manner or basis applicable to each such holder.

(c) The plan of share exchange may set forth other provisions relating to the share exchange, including a provision that the plan may be amended prior to the time the share exchange has become effective, but if shareholders of a corporation that is a party to the share exchange are required or permitted to vote on the plan, subsequent to approval of the plan by such shareholders the plan may not be amended to change in any respect not expressly authorized by such shareholders in connection with the approval of the plan:

(1) The amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property to be issued by the corporation or to be received under the plan by the shareholders of any party to the share exchange if such change would adversely affect such shareholders; or

(2) Any of the other terms or conditions of the plan if such change would adversely affect such shareholders in any material respect; and

in the event that the plan of share exchange is amended after articles or a certificate of share exchange has been filed with the Secretary of State but before the share exchange has become effective, a certificate of amendment of share exchange executed on behalf of each party to the share exchange by an officer or other duly authorized representative shall be delivered to the Secretary of State for filing prior to the effectiveness of the share exchange.

(d) Any of the terms of the plan of share exchange may be made dependent upon facts ascertainable outside of the plan of share exchange, provided that the manner in which such facts shall operate upon the terms of the share exchange is clearly and expressly set forth in the plan of share exchange. As used in this subsection, the term 'facts' includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.

(e) This Code section does not limit the power of a corporation to acquire all or part of the shares of one or more classes or series of another corporation through a voluntary exchange of shares or otherwise."

SECTION 10.

Said title is further amended by striking paragraph (1) of subsection (b) of Code Section 14-2-1103, relating to action on plan, and inserting in lieu thereof the following: "(1) The board of directors must recommend the plan of merger or share exchange shall also transmit to the shareholders a recommendation that the shareholders approve the plan, unless the board of directors elects, makes a determination that, because of conflict conflicts of interest or other special circumstances, to make no recommendation and communicates the basis for its election to the shareholders with the plan it should either refrain from making such a recommendation or recommend that the shareholders reject or vote against the plan, in which case the board of directors shall transmit to the shareholders the basis for such determination; and"

SECTION 11.

Said title is further amended by striking paragraph (2) of subsection (b) of Code Section 14-2-1104, relating to merger with subsidiary, and inserting in lieu thereof the following:

"(2) The manner and basis of converting the shares of the parent or subsidiary into shares, or other securities, obligations, rights to acquire shares or other securities of the surviving corporation or any other corporation or into cash or other property in whole or in part securities, cash, other property, or any combination thereof, and if any shares of any holder of a class or series of shares are to be converted in a manner or basis different from any other holder of shares of such class or series, the manner or basis applicable to such holder."

SECTION 12.

Said title is further amended by striking subsection (d) of Code Section 14-2-1109, relating to merger with other entities, and inserting in lieu thereof the following:

"(d) The plan of merger:

(1) Must set forth:

(A) The name of each corporation and entity planning to merge and the name of the surviving corporation or entity into which each other corporation and entity plans to merge;

(B) The terms and conditions of the merger; and

(C) The manner and basis of converting the shares of each corporation and the shares, memberships, or financial or beneficial interests or units in each of the entities into shares, or other securities, obligations, rights to acquire shares or other securities, of the surviving or any other corporation or entity or into cash or other property in whole or in part cash, other property, or any combination of the foregoing, and if any shares of any holder of a class or series of shares are to be converted in a manner or basis different from any other holder of shares of such class or series, the manner or basis applicable to each such holder; and

(2) May set forth:

(A) Amendments to the articles of incorporation or governing agreements of the surviving corporation or entity; and

(B) A provision that the plan may be amended prior to the time the merger has become effective, but if shareholders of a domestic corporation that is a party to the merger or shareholders, partners, or members of a domestic entity that is a party to the merger are required or permitted to vote on the plan, subsequent to approval of the plan by such shareholders, partners, or members the plan may not be amended to change in any respect not expressly authorized by such approving shareholders, partners, or members in connection with the approval of the plan:

(i) The amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property to be received under the plan by the shareholders, partners, or members of any party to the merger if such change would adversely affect such approving shareholders, partners, or members;

(ii) The articles or certificate of incorporation of any domestic or foreign corporation, or the governing agreements of any other entity, that will survive or be created as a result of the merger, except for changes permitted by Code Section 14-2-1002 or by comparable provisions of the law of the state or jurisdiction under which any such other entity was organized or changes that would not adversely affect such approving shareholders, partners, or members; or

(iii) Any of the other terms or conditions of the plan if such change would adversely affect such approving shareholders, partners, or members in any material respect; and

SECTION 13.

Said title is further amended by striking Code Section 14-2-1109.1, relating to election to become a limited liability company, and inserting in lieu thereof the following:

"14-2-1109.1.

(a) As used in this Code section, the term:

(1) 'Limited limited liability company' means any limited liability company formed under Chapter 11 of this title.

(2) 'Limited partnership' means any limited partnership formed under Chapter 9 of this title.

(b) Pursuant to Code Section 14-11-212 or 14-9-206.2 and this Code section, a A corporation may elect to become a limited liability company or limited partnership if the board of directors adopts and its shareholders approve a plan of election conversion.

(1) The name of the limited liability company or limited partnership to be formed pursuant to such election;

(2) The manner and basis of converting the shares of such corporation into interests as members of the limited liability company to be formed pursuant to such election or interests as partners of the limited partnership to be formed pursuant to such election or a statement that such information is contained in the written operating agreement proposed for such limited liability company or the written limited partnership agreement proposed for such limited partnership;

(3) The effective date and time of such election, if later than the date and time the certificate of election conversion is filed;

(4) The contents of the articles of organization that shall be the articles of organization of the limited liability company to be formed pursuant to such election unless and until modified in accordance with the provisions of Chapter 11 of this title or the contents of the certificate of limited partnership that shall be the certificate of limited partnership of the limited partnership to be formed pursuant to such election unless and until modified in accordance with the provisions of Chapter 9 of this title; and

(5)(A) The contents of the written operating agreement to be entered into among the persons who will be the members of the limited liability company to be formed pursuant to such election, which shall, if not separately provided in the plan of election, state:

(i) The the manner and basis for the conversion of the shares of such corporation into interests as members of the limited liability company to be formed pursuant to such election; and

(ii) That that notification that approval of the election will be deemed to be execution of the operating agreement by such persons; or

(B) The contents of the written limited partnership agreement to be entered into among the persons who will be the partners of the limited partnership to be formed pursuant to such election, which shall, if not separately provided in the plan of conversion, state:

(i) The manner and basis for the conversion of the shares of such corporation into interests as partners of the limited partnership to be formed pursuant to such conversion; and

(ii) That approval of the election will be deemed to be execution of the limited partnership agreement by such persons.

(d) For a plan of election conversion to become a limited liability company or limited partnership to be approved:

(1) The board of directors must shall submit the plan of conversion approved by the shareholders and shall recommend the plan of election conversion to the shareholders in the same manner and subject to the same exceptions as provided in subsections (a) through (d) paragraph (1) of subsection (b) of the Code Section 14-2-1103, and may condition its submission and provide notice to each shareholder entitled to vote in the same manner as provided in subsections (c) and (d) of Code Section 14-2-1103; and

(2) All of the shareholders must approve the plan of election conversion.

(e) The plan of conversion may set forth other provisions relating to the conversion, including a provision that the plan may be amended prior to the time that the conversion has become effective, but subsequent to approval of the plan by shareholders the plan may not be amended to change in any respect not expressly authorized by such shareholders in connection with the approval of the plan:

(1) The amount or kind of interests, shares or other securities, obligations, or rights to acquire interests, shares or other securities to be received under the plan by the shareholders if the change would adversely affect such shareholders; or

(2) Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect; and

in the event that the plan of conversion is amended after a certificate of conversion has been filed with the Secretary of State but before the conversion has become effective, a certificate of amendment of conversion executed by an officer or other duly authorized representative shall be delivered to the Secretary of State for filing prior to the effectiveness of the conversion.

(f) Any of the terms of the plan of conversion may be made dependent upon facts ascertainable outside of the plan of conversion, provided that the manner in which such facts shall operate upon the terms of the conversion is clearly and expressly set forth in the plan of conversion. As used in this subsection, the term 'facts' includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.

(g) After a conversion is authorized, unless the plan of conversion provides otherwise, and at any time before the conversion has become effective, the planned conversion may be abandoned, subject to any contractual rights, without further shareholder action, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner determined by the board of directors.

(e)(h) After a plan of election conversion is approved by the shareholders, the corporation shall deliver to the Secretary of State for filing a certificate of election conversion complying with subsection (b) of Code Section 14-11-212 or subsection (b) of Code Section 14-9-206.2, as applicable."

SECTION 14.

Said title is further amended by adding two new Code sections to the end of Part 1 of Article 11 of Chapter 2, relating to merger and share exchange, to read as follows:

"14-2-1109.2.

(a) A foreign corporation, domestic limited partnership, foreign limited partnership, domestic general partnership, foreign general partnership, domestic limited liability company, or foreign limited liability company may elect to become a corporation. Such election shall require the approval of all of the electing entitýs partners, members, or shareholders, or such other approval or compliance as may be sufficient under applicable law or the governing documents of the electing entity to authorize such election.

(b) Such election shall be made by delivering a certificate of conversion to the Secretary of State for filing. The certificate shall set forth:

(1) The name and jurisdiction of organization of the entity making the election;

(2) That the entity elects to become a corporation;

(3) The effective date, or the effective date and time, of such conversion if later than the date and time the certificate of conversion is filed;

(4) That the election has been approved as required by subsection (a) of this Code section;

(5) That filed with the certificate of conversion are articles of incorporation that are in the form required by Code Section 14-2-202, setting forth a name for the corporation that satisfies the requirements of Code Section 14-2-401, and stating that such articles of incorporation shall be the articles of incorporation of the corporation formed pursuant to such election unless and until modified in accordance with this chapter; and

(6) If not provided for in the articles of incorporation required by paragraph (5) of this subsection, a statement setting forth the manner and basis for converting the ownership interests in the entity making the election into shares of the corporation formed pursuant to such election.

(1) The electing entity shall become a corporation formed under this chapter by such election, except that the existence of the corporation so formed shall be deemed to have commenced on the date the entity making the election commenced its existence in the jurisdiction in which such entity was first created, formed, incorporated, or otherwise came into being;

(2) The ownership interests in the entity making the conversion shall be converted on the basis stated or referred to in the certificate of conversion in accordance with paragraph (6) of subsection (b) of this Code section;

(3) The articles of incorporation filed with the certificate of conversion shall be the articles of incorporation of the corporation formed pursuant to such election unless and until amended in accordance with this chapter;

(4) The governing documents of the entity making the election shall be of no further force or effect;

(5) The corporation formed by such election shall thereupon and thereafter possess all of the rights, privileges, immunities, franchises, and powers of the entity making the election; all property, real, personal, and mixed, all contract rights, and all debts due to such entity, as well as all other choses in action, and each and every other interest of or belonging to or due to the entity making the election shall be taken and deemed to be vested in the corporation formed by such election without further act or deed; the title to any real estate, or any interest therein, vested in the entity making the election shall not revert or be in any way impaired by reason of such election; and none of such items shall be deemed to have been conveyed, transferred, or assigned by reason of such election for any purpose; and

(6) The corporation formed by such election shall thereupon and thereafter be responsible and liable for all the liabilities and obligations of the entity making the election, and any claim existing or action or proceeding pending by or against such entity may be prosecuted as if such election had not become effective. Neither the rights of creditors nor any liens upon the property of the entity making such election shall be impaired by such election.

(d) A conversion pursuant to this Code section shall not be deemed to constitute a dissolution of the entity making the election and shall constitute a continuation of the existence of the entity making the election in the form of a corporation. A corporation formed by an election pursuant to this Code section shall for all purposes be deemed to be the same entity as the entity making such election.

(e) A corporation formed by an election pursuant to this Code section may file a copy of such certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such corporation is located and record such certified copy of the certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the entity electing to become a corporation indexed as the grantor and the corporation indexed as the grantee. No real estate transfer tax under Code Section 48-6-1 shall be due with respect to the recordation of such election.

14-2-1109.3.

(a) A corporation may elect to become a foreign limited liability company, a foreign limited partnership, or a foreign corporation, if such a conversion is permitted by the law of the state or jurisdiction under whose law the resulting entity would be formed.

(b) To effect a conversion under this Code section, the corporation must adopt a plan of conversion that sets forth the manner and basis of converting the shares of the corporation into interests, shares, obligations, or other securities, as the case may be, of the resulting entity. The plan of conversion may set forth other provisions relating to the conversion.

(1) The board of directors shall submit the plan of conversion for approval by the shareholders and shall recommend the plan of conversion to the shareholders in the same manner and subject to the same exceptions as provided in paragraph (1) of subsection (b) of Code Section 14-2-1103, and may condition its submission and provide notice to each shareholder entitled to vote in the same manner as provided in subsections (c) and (d) of Code Section 14-2-1103; and

(2) All of the shareholders must approve the plan of conversion.

(d) The plan of conversion may set forth other provisions relating to the conversion, including a provision that the plan may be amended prior to the time that the conversion has become effective, but subsequent to approval of the plan by shareholders the plan may not be amended to change in any respect not expressly authorized by such shareholders in connection with the approval of the plan:

(2) Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect; and

(e) Any of the terms of the plan of conversion may be made dependent upon facts ascertainable outside of the plan of conversion, provided that the manner in which such facts shall operate upon the terms of the conversion is clearly and expressly set forth in the plan of conversion. As used in this subsection, the term 'facts' includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.

(f) After a conversion is authorized, unless the plan of conversion provides otherwise, and at any time before the conversion has become effective, the planned conversion may be abandoned, subject to any contractual rights, without further shareholder action, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner determined by the board of directors.

(g) The conversion shall be effected as provided in, and shall have the effects provided by, the law of the state or jurisdiction under whose law the resulting entity is formed and by the plan of conversion, to the extent not inconsistent with such law.

(h) If the resulting entity is required to obtain a certificate of authority to transact business in this state by the provisions of this title governing foreign corporations, foreign limited partnerships, or foreign limited liability companies, it shall do so pursuant to Code Section 14-2-1501, 14-9-902, or 14-11-705."

SECTION 15.

Said title is further amended by striking paragraph (1) of subsection (b) of Code Section 14-2-1202, relating to sale of assets requiring shareholder approval, and inserting in lieu thereof the following:

"(1) The board of directors must recommend the proposed transaction shall also transmit to the shareholders a recommendation that the shareholders approve the proposed disposition, unless the board of directors elects, makes a determination that, because of conflict conflicts of interest or other special circumstances, to make no recommendation and communicates the basis for its election to the shareholders with the submission of the proposed transaction it should either refrain from making such a recommendation or recommend that the shareholders reject or vote against the plan, in which case the board of directors shall transmit to the shareholders the basis for such determination; and"

SECTION 16.

Said title is further amended by striking subsection (c) of Code Section 14-2-1302, relating to right to dissent, and inserting in lieu thereof the following:

"(c) Notwithstanding any other provision of this article, there shall be no right of dissent in favor of the holder of shares of any class or series which, at the record date fixed to determine the shareholders entitled to receive notice of and to vote at a meeting at which a plan of merger or share exchange or a sale or exchange of property or an amendment of the articles of incorporation is to be acted on, were either listed on a national securities exchange or held of record by more than 2,000 shareholders, unless:

(1) In the case of a plan of merger or share exchange, the any holders of shares of the class or series are required under the plan of merger or share exchange to accept for their shares:

(A) Anything anything except shares of the surviving corporation or another publicly held corporation which at the effective date of the merger or share exchange are either listed on a national securities exchange or held of record by more than 2,000 shareholders, except for scrip or cash payments in lieu of fractional shares; or

(B) Any shares of the surviving corporation or another publicly held corporation which at the effective date of the merger or share exchange are either listed on a national securities exchange or held of record by more than 2,000 shareholders that are different, in type or exchange ratio per share, from the shares to be provided or offered to any other holder of shares of the same class or series of shares in exchange for such shares; or

(2) The articles of incorporation or a resolution of the board of directors approving the transaction provides otherwise."

SECTION 17.

Said title is further amended by striking subsection (b) of Code Section 14-2-1402, relating to dissolution by board of directors and shareholders, and inserting in lieu thereof the following:

"(1) The board of directors must recommend dissolution shall also transmit to the shareholders a recommendation that the shareholders approve the proposed dissolution, unless the board of directors elects, makes the recommendation that because of a conflict conflicts of interest or other special circumstances, to make no recommendation and communicates the basis for its determination to the shareholders it should either refrain from making such a recommendation or recommend that the shareholders reject or vote against dissolution, in which case the board of directors shall transmit to the shareholders the basis for such determination; and"

SECTION 18.

Said title is further amended by striking Code Section 14-2-1504, relating to amended certificate of authority, and inserting in lieu thereof the following:

"14-2-1504.

(a) A foreign corporation authorized to transact business in this state must obtain an amended certificate of authority from the Secretary of State if it changes:

(1) Its corporate name;

(2) The period of its duration; or

(3) The state or country of its incorporation.

(b) The requirements of Code Section 14-2-1503 for obtaining an original certificate of authority apply to obtaining an amended certificate under this Code section.

(c) If a foreign corporation authorized to transact business in this state converts into a foreign limited liability company:

(1) The foreign corporation shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign limited liability company that applies for a certificate of authority to transact business in this state; and

(2) If such notice is timely given:

(A) The authorization of such entity to transact business in this state shall continue without interruption; and

(B) The certificate of authority issued to such foreign corporation under this article shall constitute a certificate of authority issued under Code Section 14-11-704 to the foreign limited liability company resulting from the conversion effective as of the date of the conversion.

The Secretary of State shall adjust its records accordingly.

(d) If a foreign corporation authorized to transact business in this state converts into a foreign limited partnership:

(1) The foreign corporation shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign limited partnership that applies for a certificate of authority to transact business in this state; and

(2) If such notice is timely given:

(A) The authorization of such entity to transact business in this state shall continue without interruption; and

(B) The certificate of authority issued to such foreign corporation under this part shall constitute a certificate of authority issued under Code Section 14-9-903 to the foreign limited partnership resulting from the conversion effective as of the date of the conversion.

The Secretary of State shall adjust its records accordingly."

SECTION 19.

Said title is further amended by striking paragraph (2) of subsection (b) of Code Section 14-2-1506, relating to corporate name of a foreign corporation, and inserting in lieu thereof the following:

"(2) A corporate name reserved or registered under Code Section 14-2-402 or 14-2-403;"

SECTION 20.

Said title is further amended by striking Code Section 14-9-206.2, relating to election to become a limited partnership, and inserting in lieu thereof the following:

"14-9-206.2.

(a) A corporation, foreign corporation, limited liability company, foreign limited liability company, foreign limited partnership, general partnership, or foreign general partnership may elect to become a limited partnership. Such election shall require:

(1) Compliance with Code Section 14-2-1109.1 in the case of a Georgia corporation; or

(2) Approval of all of its partners, members, or shareholders, or such other approval as may be sufficient under applicable law or the governing documents of the electing entity to authorize such election, in the case of a foreign corporation, limited liability company, foreign limited liability company, foreign limited partnership, general partnership, or foreign general partnership; or

(3) The approval of all of its partners, or such other approval as may be sufficient under applicable law to authorize such election, in the case of a general partnership.

(b) Such election is made by delivery of a certificate of election conversion to the Secretary of State for filing. The certificate shall set forth:

(1) The name of the corporation, limited liability company, or general partnership and jurisdiction of organization of the entity making the election;

(2) That the corporation, limited liability company, or general partnership entity elects to become a limited partnership;

(3) The effective date and time of such election if later than the date and time the certificate of election conversion is filed;

(4) That the election has been approved as required by subsection (a) of this Code section;

(5) That filed with the certificate of election conversion is a certificate of limited partnership that is in the form required by Code Section 14-9-201, that sets forth a name for the limited partnership that satisfies the requirements of Code Section 14-9-102, and that shall be the certificate of limited partnership of the limited partnership formed pursuant to such election unless and until modified in accordance with this chapter; and

(6) A statement that states setting forth either:

(A) The manner and basis for converting the shares of the corporation, the membership interests of the members of the limited liability company, or the interests of the partners in the general partnership ownership interests in the entity making the election into interests as members partners of the limited partnership formed pursuant to such election; or

(B)(i) That a written limited partnership agreement has been entered into among the persons who will be the members partners of the limited partnership formed pursuant to such election;

(ii) That such limited partnership agreement will be effective immediately upon the effectiveness of such election; and

(iii) That such limited partnership agreement provides for the manner and basis of such conversion.

(1) Corporation, limited liability company, or general partnership Electing entity shall become a limited partnership formed under this chapter by such election except that the existence of the limited partnership so formed shall be deemed to have commenced on the date the entity making the election commenced its existence in the jurisdiction in which such entity was first created, formed, incorporated, or otherwise came into being;

(2) Ownership Shares of the corporation, interests in the limited liability company, or the interests of the partners of the general partnership entity making the election shall be converted on the basis stated or referred to in the certificate of election conversion in accordance with paragraph (6) of subsection (b) of this Code section;

(3) Certificate of limited partnership filed with the certificate of election conversion shall be the certificate of limited partnership of the limited partnership formed pursuant to such election unless and until amended in accordance with this chapter;

(4) Governing documents of the entity Articles of incorporation and bylaws of the corporation, articles of organization and operating agreement of the limited liability company, or partnership agreement and statement of partnership, if any, of the general partnership making the election shall be of no further force or effect;

(5) Limited partnership formed by such election shall thereupon and thereafter possess all of the rights, privileges, immunities, franchises, and powers of the corporation, limited liability company, or general partnership entity making the election; and all property, real, personal, and mixed, all contract rights, and all debts due to such corporation, limited liability company, or general partnership entity, as well as all other choses in action, and each and every other interest of, belonging to, or due to the corporation, limited liability company, or general partnership entity making the election shall be taken and deemed to be vested in the limited partnership formed by such election without further act or deed; and the title to any real estate, or any interest in real estate, vested in the corporation, limited liability company, or general partnership entity making the election shall not revert or be in any way impaired by reason of such election; and none of such items shall be deemed to have been conveyed, transferred, or assigned by reason of such election for any purpose; and

(6) Limited partnership formed by such election shall thereupon and thereafter be responsible and liable for all the liabilities and obligations of the corporation, limited liability company, or general partnership entity making the election, and any claim existing or action or proceeding pending by or against such corporation, limited liability company, or general partnership entity may be prosecuted as if such election had not become effective. Neither the rights of creditors nor any liens upon the property of the corporation, limited liability company, or general partnership entity making such election shall be impaired by such election.

(d) A conversion pursuant to this Code section shall not be deemed to constitute a dissolution of the entity making the election and shall constitute a continuation of the existence of the entity making the election in the form of a limited partnership. A limited partnership formed by an election pursuant to this Code section shall for all purposes be deemed to be the same entity as the entity making such election.

(e) A limited partnership formed by the foregoing election pursuant to this Code section may file a copy of the foregoing election to become a limited partnership such certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such limited partnership is located and record such certified copy of the election certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the entity electing to become a limited partnership indexed as the grantor and the limited partnership indexed as the grantee. No real estate transfer tax under Code Section 48-6-1 shall be due with respect to the recordation of such election.

(e)(f) The Secretary of State shall be authorized to promulgate such rules and charge such filing fees as are necessary to carry out the purpose of this Code section."

SECTION 21.

Said title is further amended by adding a new Code Section 14-9-206.8 to the end of Article 2 of Chapter 9, relating to formation, amendment, cancellation, and merger, to read as follows:

"14-9-206.8.

(a) A limited partnership may elect to become a foreign limited liability company, a foreign limited partnership, or a foreign corporation, if such a conversion is permitted by the law of the state or jurisdiction under whose law the resulting entity would be formed.

(b) To effect a conversion under this Code section, the limited partnership must adopt a plan of conversion that sets forth the manner and basis of converting the interests of the partners of the limited partnership into interests, shares, obligations, or other securities, as the case may be, of the resulting entity. The plan of conversion may set forth other provisions relating to the conversion.

(c) The limited partnership shall have the plan of conversion authorized and approved by the unanimous consent of the partners, unless the limited partnership agreement of such limited partnership provides otherwise.

(d) After a conversion is authorized, unless the plan of conversion provides otherwise, and at any time before the conversion has become effective, the planned conversion may be abandoned, subject to any contractual rights, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, by the unanimous consent of the partners of the limited partnership, unless the limited partnership agreement of such limited partnership provides otherwise.

(e) The conversion shall be effected as provided in, and shall have the effects provided by, the law of the state or jurisdiction under whose law the resulting entity is formed and by the plan of conversion, to the extent not inconsistent with such law.

(f) If the resulting entity is required to obtain a certificate of authority to transact business in this state by the provisions of this title governing foreign corporations, foreign limited partnerships, or foreign limited liability companies, it shall do so."

SECTION 22.

Said title is further amended by striking the introductory language of Code Section 14-9-902, relating to the certificate of authority for foreign limited partnerships, and inserting in lieu thereof the following:

"(a) A foreign limited partnership transacting business in this state shall procure a certificate of authority to do so from the Secretary of State. In order to procure a certificate of authority to transact business in this state, a foreign limited partnership shall submit to the Secretary of State an application for a certificate of authority as a foreign limited partnership, signed and sworn to by a general partner setting forth:"

SECTION 23.

Said title is further amended by striking Code Section 14-9-905, relating to change of name or state of an organization, and inserting in lieu thereof the following:

"14-9-905.

(a) A foreign limited partnership authorized to transact business in this state must obtain an amended certificate of authority from the Secretary of State if it changes its name or its state of organization. The requirements of Code Sections 14-9-902 and 14-9-903 for obtaining an original certificate of authority shall apply to obtaining an amended certificate under this Code section.

(b) If a foreign limited partnership authorized to transact business in this state converts into a foreign limited liability company:

(1) The foreign limited partnership shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign limited liability company that applies for a certificate of authority to transact business in this state; and

(2) If such notice is timely given:

(A) The authorization of such entity to transact business in this state shall continue without interruption; and

(B) The certificate of authority issued to such foreign limited partnership under this article shall constitute a certificate of authority issued under Code Section 14-11-704 to the foreign limited liability company resulting from the conversion effective as of the date of the conversion.

The Secretary of State shall adjust its records accordingly.

(1) The foreign limited partnership shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign corporation that applies for a certificate of authority to transact business in this state; and

(2) If such notice is timely given:

(A) The authorization of such entity to transact business in this state shall continue without interruption; and

(B) The certificate of authority issued to such foreign limited partnership under this article shall constitute a certificate of authority issued under Code Sections 14-2-1501 and 14-2-1503 to the foreign corporation resulting from the conversion effective as of the date of the conversion.

The Secretary of State shall adjust its records accordingly."

SECTION 24.

Said title is further amended by striking Code Section 14-11-212, relating to election to become a limited liability company, and inserting in lieu thereof the following:

"14-11-212.

(a) A corporation, limited foreign corporation, foreign limited liability company, limited partnership, foreign limited partnership, general partnership, or foreign general partnership may elect to become a limited liability company. Such election shall require (1) compliance with Code Section 14-2-1109.1 in the case of a Georgia corporation, or (2) the approval of all of its partners, members or shareholders (or such other approval or compliance as may be sufficient under applicable law or the governing documents of the electing entity to authorize such election) in the case of a foreign corporation, foreign limited liability company, limited partnership, or foreign limited partnership, or foreign general partnership.

(b) Such election is made by delivering a certificate of election conversion to the Secretary of State for filing. The certificate shall set forth:

(1) The name of the corporation, limited partnership, or general partnership and jurisdiction of organization of the entity making the election;

(2) That the corporation, limited partnership, or general partnership entity elects to become a limited liability company;

(3) The effective date, or the effective date and time, of such election if later than the date and time the certificate of election conversion is filed;

(4) That the election has been approved as required by subsection (a) of this Code section;

(5) That filed with the certificate of election conversion are articles of organization that are in the form required by Code Section 14-11-204, that set forth a name for the limited liability company that satisfies the requirements of Code Section 14-11-207, and that shall be the articles of organization of the limited liability company formed pursuant to such election unless and until modified in accordance with this chapter; and

(6) A statement that setting forth either (A) states the manner and basis for converting the shares of the corporation or the interests of the partners in the limited partnership or general partnership ownership interests in the entity making the election into interests as members of the limited liability company formed pursuant to such election, or (B) states (i) that a written operating agreement has been entered into among the persons who will be the members of the limited liability company formed pursuant to such election, (ii) that such operating agreement will be effective immediately upon the effectiveness of such election, and (iii) that such operating agreement provides for the manner and basis of such conversion.

(1) The corporation, limited partnership, or general partnership electing entity shall become a limited liability company formed under this chapter by such election except that the existence of the limited liability company so formed shall be deemed to have commenced on the date the entity making the election commenced its existence in the jurisdiction in which such entity was first created, formed, incorporated, or otherwise came into being;