REPORT TITLE:
Business Entities


DESCRIPTION:
Allows corporations, partnerships, limited liability partnerships
and limited liability companies to convert to any other form of
business entity provided for under Hawaii law. (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1079
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 3
TWENTIETH LEGISLATURE, 1999                                S.D. 1
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE CONVERSION OF BUSINESS ENTITIES. 



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 415, Hawaii Revised Statutes, is amended
 
 2 by adding four new sections to be appropriately designated and to
 
 3 read as follows:
 
 4      "§415-A  Conversion into and from corporations.  (a)  A
 
 5 domestic corporation may adopt a plan of conversion and convert
 
 6 to a foreign corporation or any other entity if:
 
 7      (1)  The board of directors and shareholders of the domestic
 
 8           corporation approve a plan of conversion in the manner
 
 9           prescribed by section 415-73 and the conversion is
 
10           treated as a merger to which the converting entity is a
 
11           party and not the surviving entity;
 
12      (2)  The conversion is permitted by, and complies with the
 
13           laws of the state or country in which the converted
 
14           entity is to be incorporated, formed, or organized; and
 
15           the incorporation, formation, or organization of the
 
16           converted entity complies with such laws;
 
17      (3)  At the time the conversion becomes effective, each
 
18           shareholder of the domestic corporation, unless
 
19           otherwise agreed to by that shareholder, owns an equity
 

 
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                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           interest or other ownership interest in, and is a
 
 2           shareholder, partner, member, owner, or other security
 
 3           holder of, the converted entity;
 
 4      (4)  The shareholders of the domestic corporation, as a
 
 5           result of the conversion, shall not become personally
 
 6           liable, without the shareholders' consent, for the
 
 7           liabilities or obligations of the converted entity; and
 
 8      (5)  The converted entity is incorporated, formed, or
 
 9           organized as part of or pursuant to the plan of
 
10           conversion.
 
11      (b)  Any foreign corporation or other entity may adopt a
 
12 plan of conversion and convert to a domestic corporation if the
 
13 conversion is permitted by and complies with the laws of the
 
14 state or country in which the foreign corporation or other entity
 
15 is incorporated, formed, or organized.
 
16      (c)  A plan of conversion shall set forth:
 
17      (1)  The name of the converting entity and the converted
 
18           entity;
 
19      (2)  A statement that the converting entity is continuing
 
20           its existence in the organizational form of the
 
21           converted entity;
 
22      (3)  A statement describing the organizational form of the
 
23           converted entity and the state or country under the
 

 
Page 3                                                     1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           laws of which the converted entity is to be
 
 2           incorporated, formed, or organized;
 
 3      (4)  The manner and basis of converting the shares or other
 
 4           forms of ownership of the converting entity into shares
 
 5           or other forms of ownership of the converted entity, or
 
 6           any combination thereof;
 
 7      (5)  If the converted entity is a domestic corporation, the
 
 8           articles of incorporation of the domestic corporation
 
 9           shall be attached; and
 
10      (6)  If the converted entity is not a domestic corporation,
 
11           proof that the converted entity is registered in this
 
12           State shall be attached.
 
13      (d)  A plan of conversion may set forth any other provisions
 
14 relating to the conversion that are not prohibited by law,
 
15 including without limitation the initial bylaws and officers of
 
16 the converted entity.
 
17      (e)  After a conversion of a domestic or foreign corporation
 
18 is approved, and at any time before the conversion becomes
 
19 effective, the plan of conversion may be abandoned by the
 
20 converting entity without shareholder action and in accordance
 
21 with the procedures set forth in the plan of conversion or, if
 
22 these procedures are not provided in the plan, in the manner
 
23 determined by the board of directors.  If articles of conversion
 

 
Page 4                                                     1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1 have been filed with the director but the conversion has not
 
 2 become effective, the conversion may be abandoned if a statement,
 
 3 executed on behalf of the converting entity by an officer or
 
 4 other duly authorized representative and stating that the plan of
 
 5 conversion has been abandoned in accordance with applicable law,
 
 6 is filed with the director prior to the effective date of the
 
 7 conversion.  If the director finds that the statement satisfies
 
 8 the requirements provided by law, the director, after all fees
 
 9 have been paid shall:
 
10      (1)  Stamp the word "Filed" on the statement and the date of
 
11           the filing;
 
12      (2)  File the document in the director's office; and
 
13      (3)  Issue a certificate of abandonment to the converting
 
14           entity or its authorized representatives.
 
15      (f)  Once the statement provided in subsection (e) is filed
 
16 with the director, the conversion shall be deemed abandoned and
 
17 shall not be effective.
 
18      §415-B  Articles of conversion.  (a)  If a plan of
 
19 conversion has been approved in accordance with section 415-A and
 
20 has not been abandoned, articles of conversion shall be executed
 
21 by an officer or other duly authorized representative of the
 
22 converting entity and shall set forth:
 
23      (1)  A statement certifying the following:
 

 
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                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           (A)  The name, state, or country of incorporation,
 
 2                formation, or organization of the converting
 
 3                entity, and organizational form of the converting
 
 4                entity;
 
 5           (B)  That a plan of conversion has been approved in
 
 6                accordance with section 415-A;
 
 7           (C)  That an executed plan of conversion is on file at
 
 8                the principal place of business of the converting
 
 9                entity and stating the address thereof; and
 
10           (D)  That a copy of the plan of conversion shall be
 
11                furnished by the converting entity prior to the
 
12                conversion or by the converted entity after the
 
13                conversion on written request and without cost, to
 
14                any shareholder, partner, member, or owner of the
 
15                converting entity or the converted entity;
 
16      (2)  If the converting entity is a domestic corporation, the
 
17           number of shares outstanding and, if the shares of any
 
18           class or series are entitled to vote as a class, the
 
19           designation and number of outstanding shares of each
 
20           such class or series;
 
21      (3)  If the converting entity is a domestic corporation, the
 
22           number of shares outstanding that voted for and against
 
23           the plan, and, if the shares of any class or series are
 

 
Page 6                                                     1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           entitled to vote as a class, the number of shares of
 
 2           each such class or series that voted for and against
 
 3           the plan; and
 
 4      (4)  If the converting entity is a foreign corporation or
 
 5           other entity, a statement that the approval of the plan
 
 6           of conversion was duly authorized and complied with the
 
 7           laws under which it was incorporated, formed, or
 
 8           organized.
 
 9      (b)  The articles of conversion shall be delivered to the
 
10 director.  If the converted entity is a domestic corporation, the
 
11 articles of incorporation shall also be delivered to the director
 
12 with the articles of conversion.
 
13      (c)  If the director finds that the articles of conversion
 
14 satisfy the requirements provided by law, and that all required
 
15 documents are filed, the director, after all fees have been paid,
 
16 shall:
 
17      (1)  Stamp the word "Filed" on the articles of conversion
 
18           and the date of the filing;
 
19      (2)  File the document in the director's office; and
 
20      (3)  Issue a certificate of conversion to the converted
 
21           entity or its authorized representatives.
 
22      §415-C  Effective date of the conversion.  Upon the issuance
 
23 of the certificate of conversion by the director, the conversion
 

 
Page 7                                                     1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1 shall be effective.
 
 2      §415-D  Effect of conversion.  When a conversion becomes
 
 3 effective:
 
 4      (1)  The converting entity shall continue to exist without
 
 5           interruption, but in the organizational form of the
 
 6           converted entity;
 
 7      (2)  All rights, title, and interest in all real estate and
 
 8           other property owned by the converting entity shall
 
 9           automatically be owned by the converted entity without
 
10           reversion or impairment, subject to any existing liens
 
11           or other encumbrances thereon;
 
12      (3)  All liabilities and obligations of the converting
 
13           entity shall automatically be liabilities and
 
14           obligations of the converted entity without impairment
 
15           or diminution due to the conversion;
 
16      (4)  The rights of creditors of the converting entity shall
 
17           continue against the converted entity and shall not be
 
18           impaired or extinguished by the conversion;
 
19      (5)  Any action or proceeding pending by or against the
 
20           converting entity may be continued by or against the
 
21           converted entity without any need for substitution of
 
22           parties;
 
23      (6)  The shares and other forms of ownership in the
 

 
Page 8                                                     1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           converting entity that are to be converted into shares,
 
 2           or other forms of ownership, in the converted entity as
 
 3           provided in the plan of conversion shall be converted,
 
 4           and if the converting entity is a domestic corporation,
 
 5           the shareholders of the domestic corporation shall be
 
 6           entitled only to the rights provided in the plan of
 
 7           conversion or to the rights to dissent under section
 
 8           415-80;
 
 9      (7)  A shareholder, partner, member, or other owner of the
 
10           converted entity shall be liable for the debts and
 
11           obligations of the converting entity that existed
 
12           before the conversion takes effect only to the extent
 
13           that such shareholder, partner, member, or other owner:
 
14           (A)  Agreed in writing to be liable for such debts or
 
15                obligations;
 
16           (B)  Was liable under applicable law prior to the
 
17                effective date of the conversion, for such debts
 
18                or obligations; or
 
19           (C)  Becomes liable under applicable law for existing
 
20                debts and obligations of the converted entity by
 
21                becoming a shareholder, partner, member, or other
 
22                owner of the converted entity;
 
23      (8)  If the converted entity is a foreign corporation or
 

 
Page 9                                                     1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           other entity, the converted entity shall:
 
 2           (A)  Appoint a resident of this State, as its agent for
 
 3                service of process in a proceeding to enforce any
 
 4                obligation or the rights of dissenting
 
 5                shareholders of the converting domestic
 
 6                corporation; and
 
 7           (B)  Promptly pay the dissenting shareholders of the
 
 8                converting domestic corporation the amount, if
 
 9                any, to which they are entitled under section
 
10                415-81;
 
11           and
 
12      (9)  If the converting entity is a domestic corporation,
 
13           sections 415-80 and 415-81 shall apply as if the
 
14           converted entity were the survivor of a merger with the
 
15           converting entity."
 
16      SECTION 2.  Chapter 415A, Hawaii Revised Statutes, is
 
17 amended by adding four new sections to be appropriately
 
18 designated and to read as follows:
 
19      "§415A-A  Conversion into and from professional
 
20 corporations.  (a)  A professional corporation may adopt a plan
 
21 of conversion and convert to any other entity if:
 
22      (1)  The board of directors and shareholders of the
 
23           professional corporation approve a plan of conversion
 

 
Page 10                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           in the manner prescribed by section 415-73 and the
 
 2           conversion is treated as a merger to which the
 
 3           converting entity is a party and not the surviving
 
 4           entity;
 
 5      (2)  The conversion is permitted by and complies with the
 
 6           laws of the state or country in which the converted
 
 7           entity is to be incorporated, formed, or organized; and
 
 8           the incorporation, formation, or organization of the
 
 9           converted entity complies with such laws;
 
10      (3)  At the time the conversion becomes effective, each
 
11           shareholder of the converting entity, unless otherwise
 
12           agreed to by that shareholder, owns an equity interest
 
13           or other ownership interest in, and is a shareholder,
 
14           partner, member, owner, or other security holder of,
 
15           the converted entity;
 
16      (4)  The shareholders of the professional corporation, as a
 
17           result of the conversion, shall not become personally
 
18           liable without the shareholders' consent, for the
 
19           liabilities or obligations of the converted entity; and
 
20      (5)  The converted entity is incorporated, formed, or
 
21           organized as part of or pursuant to the plan of
 
22           conversion.
 
23      (b)  Any other entity may adopt a plan of conversion and
 

 
Page 11                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1 convert to a professional corporation if the conversion is
 
 2 permitted by and complies with the laws under which the other
 
 3 entity is incorporated, formed, or organized.
 
 4      (c)  A plan of conversion shall set forth:
 
 5      (1)  The name of the converting entity and the converted
 
 6           entity;
 
 7      (2)  A statement that the converting entity is continuing
 
 8           its existence in the organizational form of the
 
 9           converted entity;
 
10      (3)  A statement describing the organizational form of the
 
11           converted entity and the state or country under the
 
12           laws of which the converted entity is to be
 
13           incorporated, formed, or organized;
 
14      (4)  The manner and basis of converting the shares or other
 
15           forms of ownership of the converting entity into shares
 
16           or other forms of ownership of the converted entity, or
 
17           any combination thereof;
 
18      (5)  If the converted entity is a professional corporation,
 
19           the articles of incorporation of the professional
 
20           corporation shall be attached; and
 
21      (6)  If the converted entity is not a professional
 
22           corporation, proof that the converted entity is
 
23           registered in this State shall be attached.
 

 
Page 12                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1      (d)  A plan of conversion may set forth any other provisions
 
 2 relating to the conversion that are not prohibited by law,
 
 3 including without limitation the initial bylaws and officers of
 
 4 the converted entity.
 
 5      (e)  After a conversion of a professional corporation is
 
 6 approved, and at any time before the conversion becomes
 
 7 effective, the plan of conversion may be abandoned by the
 
 8 professional corporation without shareholder action and in
 
 9 accordance with the procedures set forth in the plan of
 
10 conversion or, if these procedures are not provided in the plan,
 
11 in the manner determined by the board of directors.  If articles
 
12 of conversion have been filed with the director but the
 
13 conversion has not become effective, the conversion may be
 
14 abandoned if a statement, executed on behalf of the converting
 
15 entity by an officer or other duly authorized representative and
 
16 stating that the plan of conversion has been abandoned in
 
17 accordance with applicable law, is filed with the director prior
 
18 to the effective date of the conversion.  If the director finds
 
19 that the statement satisfies the requirements provided by law,
 
20 the director, after all fees have been paid shall:
 
21      (1)  Stamp the word "Filed" on the statement and the date of
 
22           the filing;
 
23      (2)  File the document in the director's office; and
 

 
Page 13                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1      (3)  Issue a certificate of abandonment to the converting
 
 2           entity or its authorized representatives.
 
 3      (f)  Once the statement provided in subsection (e) is filed
 
 4 with the director, the conversion shall be deemed abandoned and
 
 5 shall not be effective.
 
 6      §415A-B  Articles of conversion.  (a)  If a plan of
 
 7 conversion has been approved in accordance with section 415A-A
 
 8 and has not been abandoned, articles of conversion shall be
 
 9 executed by an officer or other duly authorized representative of
 
10 the converting entity and shall set forth:
 
11      (1)  A statement certifying the following:
 
12           (A)  The name, state, or country of incorporation,
 
13                formation, or organization of the converting
 
14                entity, and organizational form of the converting
 
15                entity;
 
16           (B)  That a plan of conversion has been approved in
 
17                accordance with section 415A-A;
 
18           (C)  That an executed plan of conversion is on file at
 
19                the principal place of business of the converting
 
20                entity and stating the address thereof; and
 
21           (D)  That a copy of the plan of conversion shall be
 
22                furnished by the converting entity prior to the
 
23                conversion or by the converted entity after the
 

 
Page 14                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1                conversion on written request and without cost, to
 
 2                any shareholder of the converting entity or the
 
 3                converted entity;
 
 4      (2)  If the converting entity is a professional corporation,
 
 5           the number of shares outstanding and, if the shares of
 
 6           any class or series are entitled to vote as a class,
 
 7           the designation and number of outstanding shares of
 
 8           each such class or series;
 
 9      (3)  If the converting entity is a professional corporation,
 
10           the number of shares outstanding that voted for and
 
11           against the plan and, if the shares of any class or
 
12           series are entitled to vote as a class, the number of
 
13           shares of each such class or series that voted for and
 
14           against the plan; and
 
15      (4)  If the converting entity is another entity, a statement
 
16           that the approval of the plan of conversion was duly
 
17           authorized and complied with the laws under which it
 
18           was incorporated, formed, or organized.
 
19      (b)  The articles of conversion shall be delivered to the
 
20 director.  If the converted entity is a professional corporation,
 
21 the articles of incorporation shall also be delivered to the
 
22 director with the articles of conversion.
 
23      (c)  If the director finds that the articles of conversion
 

 
Page 15                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1 satisfy the requirements provided by law, and that all required
 
 2 documents are filed, the director, after all fees have been paid
 
 3 shall:
 
 4      (1)  Stamp the word "Filed" on the articles of conversion
 
 5           and the date of the filing;
 
 6      (2)  File the document in the director's office; and
 
 7      (3)  Issue a certificate of conversion to the converted
 
 8           entity or its authorized representatives.
 
 9      §415A-C  Effective date of the conversion.  Upon the
 
10 issuance of the certificate of conversion by the director, the
 
11 conversion shall be effective.
 
12      §415A-D  Effect of conversion.  When a conversion becomes
 
13 effective:
 
14      (1)  The converting entity shall continue to exist without
 
15           interruption but in the organizational form of the
 
16           converted entity;
 
17      (2)  All rights, title, and interest in all real estate and
 
18           other property owned by the converting entity shall
 
19           automatically be owned by the converted entity without
 
20           reversion or impairment, subject to any existing liens
 
21           or other encumbrances thereon;
 
22      (3)  All liabilities and obligations of the converting
 
23           entity shall automatically be liabilities and
 

 
Page 16                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           obligations of the converted entity without impairment
 
 2           or diminution due to the conversion;
 
 3      (4)  The rights of creditors of the converting entity shall
 
 4           continue against the converted entity and shall not be
 
 5           impaired or extinguished by the conversion;
 
 6      (5)  Any action or proceeding pending by or against the
 
 7           converting entity may be continued by or against the
 
 8           converted entity without any need for substitution of
 
 9           parties;
 
10      (6)  The shares and other forms of ownership in the
 
11           converting entity that are to be converted into shares
 
12           or other forms of ownership in the converted entity as
 
13           provided in the plan of conversion shall be converted,
 
14           and if the converting entity is a professional
 
15           corporation, the former shareholders of the
 
16           professional corporation shall be entitled only to the
 
17           rights provided in the plan of conversion or to the
 
18           rights to dissent under section 415-80;
 
19      (7)  A shareholder, partner, member, or other owner of the
 
20           converted entity shall be liable for the debts and
 
21           obligations of the converting entity that existed
 
22           before the conversion takes effect only to the extent
 
23           that such shareholder, partner, member, or other owner:
 

 
Page 17                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           (A)  Agreed in writing to be liable for such debts or
 
 2                obligations;
 
 3           (B)  Was liable under applicable law prior to the
 
 4                effective date of the conversion for such debts or
 
 5                obligations; or
 
 6           (C)  Becomes liable under applicable law for existing
 
 7                debts and obligations of the converted entity by
 
 8                becoming a shareholder, partner, member, or other
 
 9                owner of the converted entity;
 
10      (8)  If the converted entity is a foreign corporation or
 
11           other entity, the converted entity shall:
 
12           (A)  Appoint a resident of this State as its agent for
 
13                service of process in a proceeding to enforce any
 
14                obligation or the rights of dissenting
 
15                shareholders of the converting domestic
 
16                corporation; and
 
17           (B)  Promptly pay the dissenting shareholders of the
 
18                converting domestic corporation the amount, if
 
19                any, to which they are entitled under section
 
20                415-81;
 
21           and
 
22      (9)  If the converting entity is a professional corporation,
 
23           sections 415-80 and 415-81 shall apply as if the
 

 
Page 18                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           converted entity were the survivor of a merger with the
 
 2           converting entity."
 
 3      SECTION 3.  Chapter 415B, Hawaii Revised Statutes, is
 
 4 amended by adding four new sections to part IV to be
 
 5 appropriately designated and to read as follows:
 
 6      §415B-A  Conversions into and from corporations.  (a)  A
 
 7 domestic corporation may adopt a plan of conversion and convert
 
 8 to a foreign corporation or any other entity if:
 
 9      (1)  The board of directors and members of the domestic
 
10           corporation approve a plan of conversion in the manner
 
11           prescribed by section 415B-83 and if the conversion is
 
12           treated as a merger to which the converting entity is a
 
13           party and not the surviving entity;
 
14      (2)  The conversion is permitted by and complies with the
 
15           laws of the state or country in which the converted
 
16           entity is to be incorporated, formed, or organized; and
 
17           the incorporation, formation, or organization of the
 
18           converted entity complies with such laws;
 
19      (3)  At the time the conversion becomes effective, each
 
20           member of the converting entity, unless otherwise
 
21           agreed to by the member, or directors, owns an equity
 
22           interest or other ownership interest in, and is a
 
23           shareholder, partner, member, owner, or other security
 

 
Page 19                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           holder of, the converted entity;
 
 2      (4)  The members of the domestic corporation, as a result of
 
 3           the conversion, shall not become personally liable
 
 4           without the members' consent, for the liabilities or
 
 5           obligations of the converted entity; and
 
 6      (5)  The converted entity is incorporated, formed, or
 
 7           organized as part of or pursuant to the plan of
 
 8           conversion.
 
 9      (b)  Any foreign corporation or other entity may adopt a
 
10 plan of conversion and convert to a domestic corporation if the
 
11 conversion is permitted by and complies with the laws of the
 
12 state or country in which the foreign corporation or other entity
 
13 is incorporated, formed, or organized.
 
14      (c)  A plan of conversion shall set forth:
 
15      (1)  The name of the converting entity and the converted
 
16           entity;
 
17      (2)  A statement that the converting entity is continuing
 
18           its existence in the organizational form of the
 
19           converted entity;
 
20      (3)  A statement describing the organizational form of the
 
21           converted entity and the state or country under the
 
22           laws of which the converted entity is to be
 
23           incorporated, formed, or organized;
 

 
Page 20                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1      (4)  The manner and basis of converting the shares or other
 
 2           forms of ownership, of the converting entity into
 
 3           shares or other forms of ownership, of the converted
 
 4           entity, or any combination thereof;
 
 5      (5)  If the converted entity is a domestic corporation, the
 
 6           articles of incorporation of the domestic corporation
 
 7           shall be attached; and
 
 8      (6)  If the converted entity is not a domestic corporation,
 
 9           proof that the converted entity is registered in this
 
10           State shall be attached.
 
11      (d)  A plan of conversion may set forth any other provisions
 
12 relating to the conversion that are not prohibited by law,
 
13 including without limitation the initial bylaws and officers of
 
14 the converted entity.
 
15      (e)  After a conversion of a domestic corporation is
 
16 approved, and at any time before the conversion becomes
 
17 effective, the plan of conversion may be abandoned by the
 
18 domestic corporation in accordance with the procedures set forth
 
19 in the plan of conversion or, if these procedures are not
 
20 provided in the plan, in the manner determined by the board of
 
21 directors.  If articles of conversion have been filed with the
 
22 director but the conversion has not become effective, the
 
23 conversion may be abandoned if a statement, executed on behalf of
 

 
Page 21                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1 the converting entity by an officer or other duly authorized
 
 2 representative and stating that the plan of conversion has been
 
 3 abandoned in accordance with applicable law, is filed with the
 
 4 director prior to the effective date of the conversion.  If the
 
 5 director finds that the statement satisfies the requirements
 
 6 provided by law, the director, after all fees have been paid
 
 7 shall:
 
 8      (1)  Stamp the word "Filed" on the statement and the date of
 
 9           the filing;
 
10      (2)  File the document in the director's office; and
 
11      (3)  Issue a certificate of abandonment to the converting
 
12           entity or its authorized representatives.
 
13      (f)  Once the statement provided in subsection (e) is filed
 
14 with the director, the conversion shall be deemed abandoned and
 
15 shall not be effective.
 
16      §415B-B  Articles of conversion.  (a)  If a plan of
 
17 conversion has been approved in accordance with section 415B-83
 
18 and has not been abandoned, articles of conversion shall be
 
19 executed by an officer or other duly authorized representative of
 
20 the converting entity and shall set forth:
 
21      (1)  A statement certifying the following:
 
22           (A)  The name, state, or country of incorporation,
 
23                formation, or organization of the converting
 

 
Page 22                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1                entity, and organizational form of the converting
 
 2                entity;
 
 3           (B)  That a plan of conversion has been approved;
 
 4           (C)  That an executed plan of conversion is on file at
 
 5                the principal place of business of the converting
 
 6                entity and stating the address thereof; and
 
 7           (D)  That a copy of the plan of conversion shall be
 
 8                furnished by the converting entity prior to the
 
 9                conversion or by the converted entity after the
 
10                conversion on written request and without cost, to
 
11                any member or director, as the case may be, of the
 
12                converting entity or the converted entity;
 
13           and
 
14      (2)  If the converting entity is a domestic or foreign
 
15           corporation or other entity, a statement that the
 
16           approval of the plan of conversion was duly authorized
 
17           and complied with the laws under which it was
 
18           incorporated, formed, or organized.
 
19      (b)  The articles of conversion shall be delivered to the
 
20 director.  If the converted entity is a domestic corporation the
 
21 articles of incorporation shall also be delivered to the director
 
22 with the articles of conversion.
 
23      (c)  If the director finds that the articles of conversion
 

 
Page 23                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1 satisfy the requirements provided by law, and that all required
 
 2 documents are filed, the director, after all fees have been paid
 
 3 shall:
 
 4      (1)  Stamp the word "Filed" on the articles of conversion
 
 5           and the date of the filing;
 
 6      (2)  File the document in the director's office; and
 
 7      (3)  Issue a certificate of conversion to the converted
 
 8           entity or its authorized representatives.
 
 9      §415B-C  Effective date of the conversion.  Upon the
 
10 issuance of the certificate of conversion by the director, the
 
11 conversion shall be effective.
 
12      §415B-D  Effect of conversion.  When a conversion becomes
 
13 effective:
 
14      (1)  The converting entity shall continue to exist without
 
15           interruption, but in the organizational form of the
 
16           converted entity;
 
17      (2)  All rights, title, and interest in all real estate and
 
18           other property owned by the converting entity shall
 
19           automatically be owned by the converted entity without
 
20           reversion or impairment, subject to any existing liens
 
21           or other encumbrances thereon;
 
22      (3)  All liabilities and obligations of the converting
 
23           entity shall automatically be liabilities and
 

 
Page 24                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           obligations of the converted entity without impairment
 
 2           or diminution due to the conversion;
 
 3      (4)  The rights of creditors of the converting entity shall
 
 4           continue against the converted entity and shall not be
 
 5           impaired or extinguished by the conversion;
 
 6      (5)  Any action or proceeding pending by or against the
 
 7           converting entity may be continued by or against the
 
 8           converted entity without any need for substitution of
 
 9           parties;
 
10      (6)  The shares and other forms of ownership in the
 
11           converting entity that are to be converted into shares,
 
12           or other forms of ownership in the converted entity, as
 
13           provided in the plan of conversion, shall be converted;
 
14           and
 
15      (7)  A shareholder, partner, member, or other owner of the
 
16           converted entity shall be liable for the debts and
 
17           obligations of the converting entity that existed
 
18           before the conversion takes effect only to the extent
 
19           that such shareholder, partner, member, or other owner:
 
20           (A)  Agreed in writing to be liable for such debts or
 
21                obligations;
 
22           (B)  Was liable under applicable law prior to the
 
23                effective date of the conversion for such debts or
 

 
Page 25                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1                obligations; or
 
 2           (C)  Becomes liable under applicable law for existing
 
 3                debts and obligations of the converted entity by
 
 4                becoming a shareholder, partner, member, or other
 
 5                owner of the converted entity."
 
 6      SECTION 4.  Chapter 425, Hawaii Revised Statutes, is amended
 
 7 by adding four new sections to part VI to be appropriately
 
 8 designated and to read as follows:
 
 9      "§425-A  Conversion into and from partnerships or limited
 
10 liability partnerships.  (a)  A domestic partnership or limited
 
11 liability partnership may adopt a plan of conversion and convert
 
12 to a foreign partnership, limited liability partnership, or any
 
13 other entity if:
 
14      (1)  The domestic partnership or limited liability
 
15           partnership acts on and its partners approve a plan of
 
16           conversion in the manner prescribed by sections 425-191
 
17           and 428-904 to 428-906 and the conversion is treated as
 
18           a merger to which the converting entity is a party and
 
19           not the surviving entity;
 
20      (2)  The conversion is permitted by and complies with the
 
21           laws of the state or country in which the converted
 
22           entity is to be incorporated, formed, or organized; and
 
23           the incorporation, formation, or organization of the
 

 
Page 26                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           converted entity complies with such laws;
 
 2      (3)  At the time the conversion becomes effective, each
 
 3           partner of the converting entity, unless otherwise
 
 4           agreed to by that partner, owns an equity interest or
 
 5           other ownership interest in, and is a shareholder,
 
 6           partner, member, owner, or other security holder of,
 
 7           the converted entity; and
 
 8      (4)  The converted entity shall be incorporated, formed, or
 
 9           organized as part of or pursuant to the plan of
 
10           conversion.
 
11      (b)  Any foreign partnership, limited liability partnership,
 
12 or other entity may adopt a plan of conversion and convert to a
 
13 domestic partnership or limited liability partnership if the
 
14 conversion is permitted by and complies with the laws of the
 
15 state or country in which the foreign partnership, limited
 
16 liability partnership, or other entity is incorporated, formed,
 
17 or organized.
 
18      (c)  A plan of conversion shall set forth:
 
19      (1)  The name of the converting entity and the converted
 
20           entity;
 
21      (2)  A statement that the converting entity is continuing
 
22           its existence in the organizational form of the
 
23           converted entity;
 

 
Page 27                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1      (3)  A statement describing the organizational form of the
 
 2           converted entity and the state or country under the
 
 3           laws of which the converted entity is to be
 
 4           incorporated, formed, or organized;
 
 5      (4)  The manner and basis of converting the partnership
 
 6           interests, or other forms of ownership of the
 
 7           converting entity into partnership interests, or other
 
 8           forms of ownership of the converted entity, or any
 
 9           combination thereof;
 
10      (5)  If the converted entity is a domestic partnership or
 
11           limited liability partnership, the registration
 
12           statement of the domestic partnership or limited
 
13           liability partnership shall be attached; and
 
14      (6)  If the converted entity is not a domestic partnership,
 
15           or limited liability partnership, proof that the
 
16           converted entity is registered in this State shall be
 
17           attached.
 
18      (d)  A plan of conversion may set forth any other provisions
 
19 relating to the conversion that are not prohibited by law,
 
20 including without limitation the initial partnership or limited
 
21 liability partnership agreement of the converted entity if the
 
22 converted entity is a partnership or limited liability
 
23 partnership.
 

 
Page 28                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1      §425-B  Articles of conversion.  (a)  If a plan of
 
 2 conversion has been approved in accordance with the section 425-A
 
 3 and has not been abandoned, articles of conversion shall be
 
 4 executed by a partner, officer, or other duly authorized
 
 5 representative of the converting entity and shall set forth:
 
 6      (1)  A statement certifying the following:
 
 7           (A)  The name, state, or country of incorporation,
 
 8                formation, or organization of the converting
 
 9                entity and the organizational form of the
 
10                converting entity;
 
11           (B)  That a plan of conversion has been approved in
 
12                accordance with section 425-A;
 
13           (C)  That an executed plan of conversion is on file at
 
14                the principal place of business of the converting
 
15                entity and stating the address thereof; and
 
16           (D)  That a copy of the plan of conversion shall be
 
17                furnished by the converting entity prior to the
 
18                conversion or the converted entity after the
 
19                conversion on written request and without cost, to
 
20                any partner, shareholder, owner, or member of the
 
21                converting entity or the converted entity;
 
22           and
 
23      (2)  A statement that the approval of the plan of conversion
 

 
Page 29                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           was duly authorized by all action required by the laws
 
 2           under which the converting entity was incorporated,
 
 3           formed, or organized.
 
 4      (b)  The articles of conversion shall be delivered to the
 
 5 director.
 
 6      (c)  If the converted entity is a domestic partnership, the
 
 7 registration statement of the domestic partnership or limited
 
 8 liability partnership shall also be delivered to the director
 
 9 with the articles of conversion.
 
10      §425-C  Effective date of the conversion.  Upon the issuance
 
11 of a certificate of conversion by the director, the conversion
 
12 shall be effective.
 
13      §425-D  Effect of conversion.  When a conversion becomes
 
14 effective:
 
15      (1)  The converting entity shall continue to exist without
 
16           interruption, but in the organizational form of the
 
17           converted entity;
 
18      (2)  All rights, title, and interest in all real estate and
 
19           other property owned by the converting entity shall
 
20           automatically be owned by the converted entity without
 
21           reversion or impairment, subject to any existing liens
 
22           or other encumbrances thereon;
 
23      (3)  All liabilities and obligations of the converting
 

 
Page 30                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           entity shall automatically be liabilities and
 
 2           obligations of the converted entity without impairment
 
 3           or diminution due to the conversion;
 
 4      (4)  The rights of creditors of the converting party shall
 
 5           continue against the converted entity and shall not be
 
 6           impaired or extinguished by the conversion;
 
 7      (5)  Any action or proceeding pending by or against the
 
 8           converting entity may be continued by or against the
 
 9           converted entity, without any need for substitution of
 
10           parties;
 
11      (6)  The partnership interests, and other forms of ownership
 
12           in the converting entity that are to be converted into
 
13           partnership interests, or other forms of ownership, in
 
14           the converted entity as provided in the plan of
 
15           conversion shall be converted;
 
16      (7)  A shareholder, partner, member, or other owner of the
 
17           converted entity, shall be liable for the debts and
 
18           obligations of the converting entity that existed
 
19           before the conversion takes effect only to the extent
 
20           that such shareholder, partner, member, or other owner:
 
21           (A)  Agreed in writing to be liable for such debts or
 
22                obligations;
 
23           (B)  Was liable under applicable law prior to the
 

 
Page 31                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1                effective date of the conversion for such debts or
 
 2                obligations; or
 
 3           (C)  Becomes liable under applicable law for existing
 
 4                debts and obligations of the converted entity by
 
 5                becoming a shareholder, partner, member, or other
 
 6                owner of the converted entity;
 
 7      (8)  If the converted entity is a foreign partnership,
 
 8           limited liability partnership, or other entity, the
 
 9           converted entity shall appoint a resident of the State
 
10           as its agent, for service of process in a proceeding to
 
11           enforce any obligation or rights of dissenting partners
 
12           of the converting domestic partnership or limited
 
13           liability partnership; and
 
14      (9)  If the converting partnership is a domestic
 
15           partnership, or limited liability partnership, section
 
16           425-191 shall apply as if the converted entity were the
 
17           survivor of a merger with the converting entity."
 
18      SECTION 5.  Chapter 425D, Hawaii Revised Statutes, is
 
19 amended by adding four new sections to article 11 to be
 
20 appropriately designated and to read as follows:
 
21      "§425D-A  Conversion into or from limited partnerships.  (a)
 
22 A domestic limited partnership may adopt a plan of conversion and
 
23 convert to a foreign limited partnership or any other entity if:
 

 
Page 32                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1      (1)  The domestic limited partnership acts on and its
 
 2           partners approve a plan of conversion in the manner
 
 3           prescribed by sections 425-191 and 428-904 to 428-906,
 
 4           as if the conversion is treated as a merger to which
 
 5           the converting entity is a party and not the surviving
 
 6           entity;
 
 7      (2)  The conversion is permitted by and complies with the
 
 8           laws of the state or country in which the converted
 
 9           entity is to be incorporated, formed, or organized; and
 
10           the incorporation, formation, or organization of the
 
11           converted entity complies with such laws;
 
12      (3)  At the time the conversion becomes effective, each
 
13           partner of the converting entity, unless otherwise
 
14           agreed to by that partner, owns an equity interest or
 
15           other ownership  interest in, and is a shareholder,
 
16           partner, member, owner, or other security holder of,
 
17           the converted entity; and
 
18      (4)  The converted entity shall be incorporated, formed, or
 
19           organized as part of or pursuant to the plan of
 
20           conversion.
 
21      (b)  Any foreign limited partnership or other entity may
 
22 adopt a plan of conversion and convert to a domestic limited
 
23 partnership if the conversion is permitted by and complies with
 

 
Page 33                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1 the laws of the state or country in which the foreign limited
 
 2 partnership or other entity is incorporated, formed, or
 
 3 organized.
 
 4      (c)  A plan of conversion shall set forth:
 
 5      (1)  The name of the converting entity and the converted
 
 6           entity;
 
 7      (2)  A statement that the converting entity is continuing
 
 8           its existence in the organizational form of the
 
 9           converted entity;
 
10      (3)  A statement describing the organizational form of the
 
11           converted entity and the state or country under the
 
12           laws of which the converted entity is to be
 
13           incorporated, formed, or organized;
 
14      (4)  The manner and basis of converting the partnership
 
15           interests, or other forms of ownership of the
 
16           converting entity into partnership interests, or other
 
17           forms of ownership of the converted entity, or any
 
18           combination thereof;
 
19      (5)  If the converted entity is a domestic limited
 
20           partnership, the certificate of limited partnership
 
21           shall be attached; and
 
22      (6)  If the converted entity is not a domestic limited
 
23           partnership, proof that the converted entity is
 

 
Page 34                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           registered in this State shall be attached.
 
 2      (d)  A plan of conversion may set forth any other provisions
 
 3 relating to the conversion that are not prohibited by law,
 
 4 including without limitation the initial partnership agreement of
 
 5 the converted entity.
 
 6      §425D-B  Articles of conversion.  (a)  If a plan of
 
 7 conversion has been approved in accordance with the section
 
 8 425D-A and has not been abandoned, articles of conversion shall
 
 9 be executed by a partner, officer, or other duly authorized
 
10 representative of the converting entity and shall set forth:
 
11      (1)  A statement certifying the following:
 
12           (A)  The name, state, or country of incorporation,
 
13                formation, or organization of the converting
 
14                entity, and the organizational form of the
 
15                converting entity;
 
16           (B)  That a plan of conversion has been approved in
 
17                accordance with section 425D-A;
 
18           (C)  That an executed plan of conversion is on file at
 
19                the principal place of business of the converting
 
20                entity and stating the address thereof;
 
21           (D)  That a copy of the plan of conversion shall be
 
22                furnished by the converting entity prior to the
 
23                conversion or the converted entity after the
 

 
Page 35                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1                conversion, on written request and without cost,
 
 2                to any limited partner of the converting entity or
 
 3                the converted entity;
 
 4           and
 
 5      (2)  A statement that the approval of the plan of conversion
 
 6           was duly authorized by all action required by the laws
 
 7           under which the converting entity was incorporated,
 
 8           formed, or organized;
 
 9      (b)  The articles of conversion shall be delivered to the
 
10 director.
 
11      (c)  If the converted entity is a domestic limited
 
12 partnership, the certificate of limited partnership shall also be
 
13 delivered to the director with the articles of conversion.
 
14      §425D-C  Effective date of the conversion.  Upon the
 
15 issuance of a certificate of conversion by the director, the
 
16 conversion shall be effective.
 
17      §425D-D  Effect of conversion.  When a conversion becomes
 
18 effective:
 
19      (1)  The converting entity shall continue to exist without
 
20           interruption, but in the organizational form of the
 
21           converted entity;
 
22      (2)  All rights, title, and interest in all real estate and
 
23           other property owned by the converting entity shall
 

 
Page 36                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           automatically be owned by the converted entity without
 
 2           reversion or impairment, subject to any existing liens
 
 3           or other encumbrances thereon;
 
 4      (3)  All liabilities and obligations of the converting
 
 5           entity shall automatically be liabilities and
 
 6           obligations of the converted entity without impairment
 
 7           or diminution due to the conversion;
 
 8      (4)  The rights of creditors of the converting party shall
 
 9           continue against the converted party and shall not be
 
10           impaired or extinguished by the conversion;
 
11      (5)  Any action or proceeding pending by or against the
 
12           converting entity may be continued by or against the
 
13           converted entity without any need for substitution of
 
14           parties;
 
15      (6)  The partnership interests and other forms of ownership
 
16           in the converting entity that are to be converted into
 
17           partnership interests, or other forms of ownership, in
 
18           the converted entity as provided in the plan of
 
19           conversion shall be converted;
 
20      (7)  A shareholder, partner, member, or other owner of the
 
21           converted entity shall be liable for the debts and
 
22           obligations of the converting entity that existed
 
23           before the conversion takes effect only to the extent
 

 
Page 37                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           that such shareholder, partner, member, or other owner:
 
 2           (A)  Agreed in writing to be liable for such debts or
 
 3                obligations;
 
 4           (B)  Was liable under applicable law prior to the
 
 5                effective date of the conversion for such debts or
 
 6                obligations; or
 
 7           (C)  Becomes liable under applicable law for existing
 
 8                debts and obligations of the converted entity by
 
 9                becoming a shareholder, partner, member, or other
 
10                owner of the converted entity;
 
11      (8)  If the converted entity is a foreign limited
 
12           partnership or other entity, the converted entity shall
 
13           appoint a resident of this State as its agent for
 
14           service of process in a proceeding to enforce any
 
15           obligation or rights of dissenting limited partners of
 
16           the converting domestic limited partnership; and
 
17      (9)  If the converting partnership is a domestic limited
 
18           partnership, section 425D-1109 shall apply as if the
 
19           converted entity were the survivor of a merger with the
 
20           converting entity."
 
21      SECTION 6.  Chapter 428, Hawaii Revised Statutes, is amended
 
22 by adding two new sections to part IX to be appropriately
 
23 designated and to read as follows:
 

 
Page 38                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1      "§428-A  Conversion into and from limited liability
 
 2 companies.  (a)  A domestic limited liability company may adopt a
 
 3 plan of conversion and convert to a foreign limited liability
 
 4 company or any other entity if:
 
 5      (1)  The domestic limited liability company acts on and its
 
 6           members approve a plan of conversion in the manner
 
 7           prescribed by sections 428-904 to 428-906 and the
 
 8           conversion is treated as a merger to which the
 
 9           converting entity is a party and not the surviving
 
10           entity;
 
11      (2)  The conversion is permitted by, and complies with, the
 
12           laws of the state or country in which the converted
 
13           entity is to be incorporated, formed, or organized; and
 
14           the incorporation, formation, or organization of the
 
15           converted entity complies with such laws;
 
16      (3)  At the time the conversion becomes effective, each
 
17           member of the converting entity, unless otherwise
 
18           agreed to by that member, owns an equity interest or
 
19           other ownership interest in, and is a shareholder,
 
20           partner, member, owner, or other security holder of,
 
21           the converted entity;
 
22      (4)  The members of the domestic limited liability company
 
23           shall not, as a result of the conversion, become
 

 
Page 39                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           personally liable without the members' consent, for the
 
 2           liabilities or obligations of the converted entity; and
 
 3      (5)  The converted entity is incorporated, formed, or
 
 4           organized as part of or pursuant to the plan of
 
 5           conversion.
 
 6      (b)  Any foreign limited liability company or other entity
 
 7 may adopt a plan of conversion and convert to a domestic limited
 
 8 liability company if the conversion is permitted by and complies
 
 9 with the laws of the state or country in which the foreign
 
10 corporation is incorporated, formed, or organized.
 
11      (c)  A plan of conversion shall set forth:
 
12      (1)  The name of the converting entity and the converted
 
13           entity;
 
14      (2)  A statement that the converting entity is continuing
 
15           its existence in the organizational form of the
 
16           converted entity;
 
17      (3)  A statement describing the organizational form of the
 
18           converted entity and the state or country under the
 
19           laws of which the converted entity is to be
 
20           incorporated, formed, or organized;
 
21      (4)  The manner and basis of converting the shares or other
 
22           forms of ownership of the converting entity into shares
 
23           or other forms of ownership of the converted entity, or
 

 
Page 40                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           any combination thereof;
 
 2      (5)  If the converted entity is a domestic limited liability
 
 3           company the articles of organization of the domestic
 
 4           limited liability company shall be attached; and
 
 5      (6)  If the converted entity is not a domestic limited
 
 6           liability company, proof that the converted entity is
 
 7           registered in this State shall be attached.
 
 8      (d)  A plan of conversion may set forth any other provisions
 
 9 relating to the conversion that are not prohibited by law,
 
10 including without limitation the initial bylaws and officers of
 
11 the converted entity.
 
12      (e)  After a conversion of a limited liability company is
 
13 approved, and at any time before the conversion becomes
 
14 effective, the plan of conversion may be abandoned by the
 
15 converting entity without member action and in accordance with
 
16 the procedures set forth in the plan of conversion or, if these
 
17 procedures are not provided in the plan of conversion, in the
 
18 manner determined by the members.  If articles of conversion have
 
19 been filed with the director but the conversion has not become
 
20 effective, the conversion may be abandoned if a statement,
 
21 executed on behalf of the converting entity by an officer or
 
22 other duly authorized representative and stating that the plan of
 
23 conversion has been abandoned in accordance with applicable law,
 

 
Page 41                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1 is filed with the director prior to the effective date of the
 
 2 conversion.  If the director finds that the statement satisfies
 
 3 the requirements provided by law, the director, after all fees
 
 4 have been paid shall:
 
 5      (1)  Stamp the word "Filed" on the statement and the date of
 
 6           the filing;
 
 7      (2)  File the document in the director's office; and
 
 8      (3)  Issue a certificate of abandonment to the converting
 
 9           entity or its authorized representatives.
 
10      (f)  Once the statement provided in subsection (e) is filed
 
11 with the director, the conversion shall be deemed abandoned and
 
12 shall not be effective.
 
13      §428-B  Articles of conversion.  (a)  If a plan of
 
14 conversion has been approved in accordance with section 428-A and
 
15 has not been abandoned, articles of conversion shall be executed
 
16 by an officer or other duly authorized representative of the
 
17 converting entity by and shall set forth:
 
18      (1)  A statement certifying the following:
 
19           (A)  The name, state, or country of incorporation,
 
20                formation, or organization of the converting
 
21                entity, and organizational form of the converting
 
22                entity;
 
23           (B)  That a plan of conversion has been approved;
 

 
Page 42                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1           (C)  That an executed plan of conversion is on file at
 
 2                the principal place of business of the converting
 
 3                entity and stating the address thereof; and
 
 4           (D)  That a copy of the plan of conversion shall be
 
 5                furnished by the converting entity prior to the
 
 6                conversion or by the converted entity after the
 
 7                conversion on written request and without cost, to
 
 8                any member, shareholder, partner, or owner of the
 
 9                converting entity or the converted entity;
 
10      (2)  If the converting entity is a domestic limited
 
11           liability company, the total number of authorized
 
12           votes, and the number voted for and against the plan;
 
13           and
 
14      (3)  If the converting entity is a foreign limited liability
 
15           company or other entity, a statement that the approval
 
16           of the plan of conversion was duly authorized and
 
17           complied with the laws under which it was incorporated,
 
18           formed, or organized.
 
19      (b)  The articles of conversion shall be delivered to the
 
20 director.  If the converted entity is a domestic limited
 
21 liability company the articles of organization of the domestic
 
22 limited liability company, shall also be delivered to the
 
23 director with the articles of conversion.
 

 
Page 43                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1      (c)  If the director finds that the articles of conversion
 
 2 satisfy the requirements provided by law, and that all required
 
 3 documents are filed, the director, after all fees have been paid
 
 4 shall:
 
 5      (1)  Stamp the word "Filed" on the articles of conversion
 
 6           and the date of the filing;
 
 7      (2)  File the document in the director's office; and
 
 8      (3)  Issue a certificate of conversion to the converted
 
 9           entity or its authorized representatives."
 
10      SECTION 7.  Section 415-2, Hawaii Revised Statutes, is
 
11 amended by adding a new definition to be appropriately inserted
 
12 and to read as follows:
 
13      ""Other entity" includes a domestic or foreign non-profit
 
14 corporation, limited liability company, general partnership,
 
15 limited partnership, limited liability partnership, or a domestic
 
16 professional corporation."
 
17      SECTION 8.  Section 415A-2, Hawaii Revised Statutes, is
 
18 amended by adding a new definition to be appropriately inserted
 
19 and to read as follows:
 
20      ""Other entity" includes a domestic or foreign corporation,
 
21 whether organized for profit or not, a domestic or foreign
 
22 limited liability company, general partnership, limited
 
23 partnership, or limited liability partnership."
 

 
Page 44                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1      SECTION 9.  Section 415B-2, Hawaii Revised Statutes, is
 
 2 amended by adding a new definition to be appropriately inserted
 
 3 and to read as follows:
 
 4      ""Other entity" includes a domestic or foreign corporation,
 
 5 whether organized for profit or not, a domestic or foreign
 
 6 limited liability company, general partnership, limited
 
 7 partnership, limited liability partnership, or a domestic
 
 8 professional corporation."
 
 9      SECTION 10.  Section 425-152, Hawaii Revised Statutes, is
 
10 amended by adding a new definition to be appropriately inserted
 
11 and to read as follows:
 
12      ""Other entity" includes a domestic or foreign corporation,
 
13 whether organized for profit or not, a domestic or foreign
 
14 limited partnership, limited liability company, or domestic
 
15 professional corporation."
 
16      SECTION 11.  Section 425D-101, Hawaii Revised Statutes, is
 
17 amended by adding a new definition to be appropriately inserted
 
18 and to read as follows:
 
19      ""Other entity" includes a domestic or foreign corporation,
 
20 whether organized for profit or not, a domestic or foreign
 
21 partnership, limited liability partnership, limited liability
 
22 company, or a professional corporation."
 
23      SECTION 12.  Section 428-901, Hawaii Revised Statutes, is
 

 
Page 45                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1 amended by adding a new definition to be appropriately inserted
 
 2 and to read as follows:
 
 3      ""Other entity" includes a foreign or domestic corporation,
 
 4 whether organized for profit or not, a domestic or foreign
 
 5 partnership, limited partnership, limited liability partnership,
 
 6 or a domestic professional corporation."
 
 7      SECTION 13.  Section 415-128, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "§415-128  Fees for filing documents and issuing
 
10 certificates.  (a)  The following fees shall be paid to the
 
11 director upon the filing of corporate documents:
 
12      (1)  Articles of incorporation, $100;
 
13      (2)  Articles of amendment, $50;
 
14      (3)  Restated articles of incorporation, $50;
 
15      (4)  Articles of conversion, merger, or consolidation, $200;
 
16      (5)  Articles of merger (subsidiary corporation), $100;
 
17      (6)  Articles of dissolution, $50;
 
18      (7)  Annual report of domestic and foreign corporations
 
19           organized for profit, $25;
 
20      (8)  Any other statement, report, certificate, application,
 
21           or other corporate document, except an annual report,
 
22           of a domestic or foreign corporation, $50;
 
23      (9)  Application for a certificate of authority, $100;
 

 
Page 46                                                    1079
                                     H.B. NO.           H.D. 3
                                                        S.D. 1
                                                        


 1     (10)  Application for a certificate of withdrawal, $50;
 
 2     (11)  Reservation of corporate name, $20;
 
 3     (12)  Transfer of reservation of corporate name, $20;
 
 4     (13)  Good standing certificate, $25;
 
 5     (14)  Special handling fee for review of corporation
 
 6           documents, excluding articles of conversion, merger, or
 
 7           consolidation, $50;
 
 8     (15)  Special handling fee for review of articles of
 
 9           conversion, merger, or consolidation,  $150;
 
10     (16)  Special handling fee for certificates issued by the
 
11           department, $20 per certificate; and
 
12     (17)  Special handling fee for certification of documents, $1
 
13           per page.
 
14      (b)  All special handling fees shall be credited to the
 
15 special fund established for use by the department in expediting
 
16 the processing of documents.  At least two temporary business
 
17 registration assistant I positions shall be paid out of the
 
18 special fund.
 
19      (c)  The director shall adjust the fees assessed under this
 
20 section, as necessary from time to time, through rules adopted
 
21 under chapter 91 to ensure that the proceeds, together with all
 
22 other receipts of the special fund under this section do not
 
23 surpass the annual operating costs of the program.  All
 

 
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 1 unexpended and unencumbered moneys remaining on balance with the
 
 2 fund at the close of each fiscal year which are deemed, by the
 
 3 director of finance, to be in excess of the moneys necessary to
 
 4 carry out the processing of corporate documents over the next
 
 5 following fiscal year shall lapse to the credit of the state
 
 6 general fund."
 
 7      SECTION 14.  Chapter 415B, Hawaii Revised Statutes, is
 
 8 amended by amending the title of part IV to read as follows:
 
 9                             "PART IV.
 
10          MERGERS [AND], CONSOLIDATIONS, AND CONVERSIONS"
 
11      SECTION 15.  Section 415B-155, Hawaii Revised Statutes, is
 
12 amended to read as follows:
 
13      "§415B-155  Fees for filing documents and issuing
 
14 certificates.  (a)  The following fees shall be paid to the
 
15 director upon the filing of corporate documents:
 
16      (1)  Articles of incorporation, $50;
 
17      (2)  Articles  of amendment, $20;
 
18      (3)  Restated articles of incorporation, $20;
 
19      (4)  Articles of merger or consolidation, $100;
 
20      (5)  Articles of conversion, $200;
 
21      (6)  Articles of dissolution, $20;
 
22     [(6)] (7)  Annual report of nonprofit domestic and foreign
 
23           corporations, $5;
 

 
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 1     [(7)] (8)  Any other statement, report, certificate,
 
 2           application, or other corporate document, except an
 
 3           annual report, of a nonprofit domestic or foreign
 
 4           corporation, $20;
 
 5     [(8)] (9)  Application for a certificate of authority, $50;
 
 6     [(9)] (10)  Application for a certificate of withdrawal, $20;
 
 7    [(10)] (11)  Reservation of corporate name, $20;
 
 8    [(11)] (12)  Transfer of reservation of corporate name, $20;
 
 9    [(12)] (13)  Good standing certificate, $20;
 
10    [(13)] (14)  Special handling fee for review of corporation
 
11           documents, excluding articles of merger or
 
12           consolidation, $50;
 
13    [(14)] (15)  Special handling fee for review of articles of
 
14           conversion, merger, or consolidation, $150;
 
15    [(15)] (16)  Special handling fee for certificates issued by
 
16           the department, $20 per certificate; and
 
17    [(16)] (17)  Special handling fee for certification of
 
18           documents, $1 per page.
 
19      (b)  All special handling fees shall be credited to a
 
20 special fund which may be established for use by the department
 
21 in expediting the processing of documents.  At least two
 
22 temporary business registration assistant I positions shall be
 
23 paid out of the special fund."
 

 
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 1      SECTION 16.  Section 425-12, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§425-12  Fee for filing documents and issuing certificates.
 
 4 (a)  The following fees shall be paid to the director upon the
 
 5 filing of general partnership documents:
 
 6      (1)  Partnership registration statement, $25;
 
 7      (2)  Partnership change of name statement, $25;
 
 8      (3)  Partnership dissolution statement, $25;
 
 9      (4)  Foreign general partnership registration statement,
 
10           $25;
 
11      (5)  Statement of change, $25;
 
12      (6)  Application of certificate of withdrawal, $10;
 
13      (7)  Statement of correction, $25;
 
14      (8)  Reservation of name, $20;
 
15      (9)  Transfer of reservation of name, $20;
 
16     (10)  Annual statement for domestic or foreign general
 
17           partnership, $10;
 
18     (11)  Good standing certificate, $25;
 
19     (12)  Articles of conversion, $200:
 
20    [(12)] (13)  Any other statement, certificate, or other
 
21           document for a domestic or foreign general partnership,
 
22           $25;
 
23    [(13)] (14)  Special handling fee for review of any general
 

 
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 1           partnership document, $20;
 
 2    [(14)] (15)  Special handling fee for certificates issued by
 
 3           the director, $20 per certificate; [and]
 
 4    [(15)] (16)  Special handling fee for certification of
 
 5           documents, $1 per page[.]; and
 
 6     (17)  Special handling fee for review of articles of
 
 7           conversion, $150.
 
 8      (b)  All special handling fees shall be credited to the
 
 9 special fund authorized by section 415-128."
 
10      SECTION 17.  Section 425-169, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "[[]§425-169[]]  Fee for recording.(a)  The director shall
 
13 collect the following fees for documents filed under this part:
 
14      (1)  For each change of partnership name or statement of
 
15           dissolution filed, a fee of $5 per partner, subject to
 
16           a maximum fee of $5,000;
 
17      (2)  For each annual statement filed, a fee of $50;
 
18      (3)  For each limited liability partnership registered, a
 
19           fee of $100 for each partner, subject to a maximum fee
 
20           of $10,000;
 
21      (4)  For each foreign limited liability partnership
 
22           registered, a fee of $1,000 if the partnership has
 
23           fewer than ten partners; $5,000 if the partnership has
 

 
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 1           ten or more but fewer than fifty partners; and $10,000
 
 2           if the partnership has fifty or more partners;
 
 3      (5)  For each reservation or transfer of limited liability
 
 4           partnership name, a fee of $100;
 
 5      (6)  For each certificate of correction or certificate of
 
 6           amendment, a fee of $100;
 
 7      (7)  For each certificate of good standing, a fee of $100;
 
 8      (8)  For review of articles of conversion, a fee of $200;
 
 9     [(8)] (9)  For any other certificate, statement, or document,
 
10           a fee of $100; and
 
11     [(9)] (10)  For each certification of domestic or foreign
 
12           partnership, a fee of $100.
 
13      (b)  The following special handling fees shall be assessed
 
14 by the director for expeditious review of the following
 
15 documents:
 
16      (1)  For limited liability partnerships:  certificate of
 
17           limited liability partnership, $100; certificate of
 
18           correction, $100; change of name statement, $100;
 
19           partnership dissolution statement, $100; annual
 
20           statement, $100; certification of limited liability
 
21           partnership, $1 a page; certificate of good standing,
 
22           $100; articles of conversion, $150;
 
23      (2)  For foreign limited liability partnerships:
 

 
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 1           registration statement, $100; certificate of
 
 2           correction, $100; withdrawal application, $100; annual
 
 3           statement, $100; certification of foreign partnership,
 
 4           $1 a page; certificate of good standing, $100; filing
 
 5           articles of conversion, $150; and
 
 6      (3)  For any other certificate or document authorized by
 
 7           this part, $100.
 
 8      (c)  All special handling fees shall be credited to the
 
 9 special fund authorized by section 415-128.  All other fees
 
10 collected under this section shall be managed in accordance with
 
11 section 26-9(l)."
 
12      SECTION 18.  Section 425-191, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "[[]§425-191[]]  Merger [or conversion] of domestic general
 
15 and limited liability partnerships.  One of more domestic general
 
16 and limited liability partnerships may be [converted into or]
 
17 merged with a domestic limited liability company pursuant to
 
18 [section 428-902 or] sections 428-904 to 428-906[, as the case
 
19 may be]."
 
20      SECTION 19.  Section 425D-1107, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "§425D-1107  Fees for filing documents and issuing
 
23 certificates.  (a)  The following fees shall be paid to the
 

 
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 1 director upon the filing of limited partnership documents:
 
 2      (1)  Certificate of limited partnership, $50;
 
 3      (2)  Any certificate of amendment, restatement, or
 
 4           correction, $20;
 
 5      (3)  Certificate of cancellation, $20;
 
 6      (4)  Annual statement for domestic or foreign limited
 
 7           partnership, $10;
 
 8      (5)  Any other certificate or document of domestic or
 
 9           foreign limited partnership, $20;
 
10      (6)  Application for registration as a foreign limited
 
11           partnership, $100;
 
12      (7)  Any certificate of amendment or agent change for
 
13           foreign limited partnership, $20;
 
14      (8)  Application for certificate of withdrawal of foreign
 
15           limited partnership, $20;
 
16      (9)  Reservation of name, $20;
 
17     (10)  Transfer of reservation of name, $20;
 
18     (11)  Good standing certificate, $20;
 
19     (12)  Filing articles of conversion, $200;
 
20     (13)  Special handling fee for review of articles of
 
21           conversion, $150;
 
22    [(12)] (14)  Special handling fee for review of any limited
 
23           partnership document, $50;
 

 
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 1    [(13)] (15)  Special handling of fee for certificates issued
 
 2           by the director, $20 per certificate; and
 
 3    [(14)] (16)  Special handling fee for certification of
 
 4           documents, $1 per page.
 
 5      (b)  All special handling fees shall be credited to the
 
 6 special fund authorized by section 415-128."
 
 7      SECTION 20.  Section 425D-1109, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]§425D-1109[]]  Merger [or conversion] of domestic
 
10 limited partnerships.  One or more domestic limited partnerships
 
11 may be [converted into or] merged with a domestic limited
 
12 liability company pursuant to [section 428-902 or] sections
 
13 428-904 to 428-906[, as the case may be]."
 
14      SECTION 21.  Section 428-903, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "[[]§428-903[]]  Effect of conversion [;entity unchanged].
 
17 [(a)  A general partnership or limited partnership that has been
 
18 converted to a limited liability company pursuant to section
 
19 428-902 shall be considered the same legal entity that existed
 
20 prior to the conversion, the only change shall be the form in
 
21 which the legal entity now exists.
 
22      (b)  When the conversion takes effect:
 
23      (1)  All property owned by the converting general
 

 
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 1           partnerships or-limited partnerships is vested in the
 
 2           limited liability company;
 
 3      (2)  All debts, liabilities, and other obligations of the
 
 4           converting general partnership or limited partnership
 
 5           continue as obligations of the limited liability
 
 6           company;
 
 7      (3)  Any action or proceeding pending by or against the
 
 8           converting general partnership or limited partnership
 
 9           may be continue as if the conversion had not occurred
 
10           and the limited liability company may be substituted as
 
11           a party to the actions or proceeding;
 
12      (4)  Except as prohibited by other law, all the rights,
 
13           privileges, immunities, powers, and purposes of the
 
14           converting general partnership or limited partnership
 
15           are vested in the limited liability company; and
 
16      (5)  Except as otherwise provided in the agreement of the
 
17           conversion under section 428-902(c), all of the
 
18           partners of the converting general partnership or
 
19           limited partnership shall continue as members of the
 
20           limited liability company.]
 
21      (a)  When a conversion becomes effective:
 
22      (1)  The converting entity shall continue to exist without
 
23           interruption, but in the organizational form of the
 

 
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 1           converted entity;
 
 2      (2)  All rights, title, and interest in all real estate and
 
 3           other property owned by the converting entity shall
 
 4           automatically be owned by the converted entity without
 
 5           reversion or impairment, subject to any existing liens
 
 6           or other encumbrances thereon;
 
 7      (3)  All liabilities and obligations of the converting
 
 8           entity shall automatically be liabilities and
 
 9           obligations of the converted entity without impairment
 
10           or diminution due to the conversion;
 
11      (4)  The rights of creditors of the converting entity shall
 
12           continue against the converted entity and shall not be
 
13           impaired or extinguished by the conversion;
 
14      (5)  Any action or proceeding pending by or against the
 
15           converting entity may be continued by or against the
 
16           converted entity without any need for substitution of
 
17           parties;
 
18      (6)  The shares and other forms of ownership in the
 
19           converting entity that are to be converted into shares,
 
20           or other forms of ownership, or other securities in the
 
21           converted entity as provided in the plan of conversion
 
22           shall be converted, and if the converting entity is a
 
23           domestic limited liability company, the members of the
 

 
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 1           domestic limited liability company shall be entitled
 
 2           only to the rights provided in the plan of conversion
 
 3           or to the rights to dissent under section 415-80;
 
 4      (7)  A shareholder, partner, member, or other owner of the
 
 5           converted entity shall be liable for the debts and
 
 6           obligations of the converting entity that existed
 
 7           before the conversion takes effect only to the extent
 
 8           that such shareholder, partner, member, or other owner:
 
 9           (A)  Agreed in writing to be liable for such debts or
 
10                obligations;
 
11           (B)  Was liable under applicable law prior to the
 
12                effective date of the conversion, for such debts
 
13                or obligations; or
 
14           (C)  Becomes liable under applicable law for existing
 
15                debts and obligations of the converted entity by
 
16                becoming a shareholder, partner, member, or other
 
17                owner of the converted entity;
 
18      (8)  If the converted entity is a foreign limited liability
 
19           company or other entity, such converted entity shall
 
20           appoint a resident of this State as its agent for
 
21           service of process in a proceeding to enforce any
 
22           obligation or the rights of dissenting members of the
 
23           converting domestic limited liability company; and
 

 
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 1      (9)  If the converting entity is a domestic limited
 
 2           liability company, section 428-907 shall apply as if
 
 3           the converted entity were the survivor of a merger with
 
 4           the converting entity.
 
 5      (b)  Upon the issuance of the certificate of conversion by
 
 6 the director, the conversion shall be effective."
 
 7      SECTION 22.  Section 428-908, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]§428-908[]]  Notice of conversion or merger of
 
10 partnership or limited partnership.  A partnership or limited
 
11 partnership which intends to be converted to a limited liability
 
12 company pursuant to [sections 428-902 and] section 428-903 or
 
13 [which] that intends to be party to a merger into a limited
 
14 liability company pursuant to sections 428-905 to 428-907, shall:
 
15      (1)  Publish, once in each of three successive weeks (three
 
16           publications) in a newspaper of general circulation
 
17           published in the State, notice thereof to the
 
18           public[,]; and
 
19      (2)  Make reasonable efforts to give notice thereof in a
 
20           reasonable manner to persons with whom the partnership
 
21           or limited partnership expects to have a continuing
 
22           business relationship as of the time of the conversion
 
23           or merger.  A partnership or limited partnership which
 

 
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 1           determines in a reasonable manner the persons to whom
 
 2           such notice is given shall be in compliance with this
 
 3           section even if notice is not received by all persons
 
 4           with whom the partnership or limited partnership
 
 5           conducted business prior to the conversion or merger or
 
 6           by all persons with whom the limited liability company
 
 7           conducts business after the conversion."
 
 8      SECTION 23.  Section 428-1301, Hawaii Revised Statues, is
 
 9 amended to read as follows:
 
10      "§428-1301  Fees.  (a)  The following fees shall be paid to
 
11 the director upon the filing and issuance of records under this
 
12 chapter:
 
13      (1)  Articles of organization, $100;
 
14      (2)  Articles of amendment, $50;
 
15      (3)  Restated articles of organization, $50;
 
16      (4)  Articles of merger[,] or conversion, $200;
 
17      (5)  Statement of dissociation, $50;
 
18      (6)  Articles of termination, $50;
 
19      (7)  Application for reinstatement for administratively
 
20           terminated limited liability company, $50;
 
21      (8)  Annual report, $25;
 
22      (9)  Statement of change of designated office or agent for
 
23           service of process, or both, for limited liability
 

 
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 1           company or foreign limited liability company, $50;
 
 2     (10)  Statement of resignation of agent for service of
 
 3           process, $50;
 
 4     (11)  Any other statement or document of a domestic or
 
 5           foreign limited liability company, $50;
 
 6     (12)  Application for certificate of authority for foreign
 
 7           limited liability company, $100;
 
 8     (13)  Application for cancellation of authority of foreign
 
 9           limited liability company, $50;
 
10     (14)  Reservation of name, $25;
 
11     (15)  Good standing certificate, $25;
 
12     (16)  Any other record not otherwise covered in this part,
 
13           $50;
 
14     (17)  Certified copy of any record relating to a limited
 
15           liability company or foreign limited liability company,
 
16           25 cents per page, and $10 for the certificate and
 
17           affixing the seal thereto;
 
18     (18)  Special handling fee for review of any record other
 
19           than articles of merger[,] or conversion, $80;
 
20     (19)  Special handling fee for review of articles of
 
21           merger[,] or conversion, $200;
 
22     (20)  Special handling fee for certificates issued by the
 
23           director not otherwise covered by this part, $10 per
 

 
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 1           certificate;
 
 2     (21)  Special handling fee for certification of record, $1
 
 3           per page; and
 
 4     (22)  Any service of notice, demand, or process upon the
 
 5           director as agent for service of process of a limited
 
 6           liability company or foreign limited liability company,
 
 7           $50, which amount may be recovered as taxable costs by
 
 8           the party to the suit or action causing such service to
 
 9           be made if such party prevails in the suit or action.
 
10      (b)  All special handling fees shall be credited to the
 
11 special fund authorized by section 415-128."
 
12      SECTION 24.  Section 428-902, Hawaii Revised Statutes, is
 
13 repealed.
 
14      ["[§428-902]  Conversion of partnerships or limited
 
15 partnerships to limited liability company.(a) A domestic
 
16 partnership or domestic limited partnership may be converted into
 
17 a domestic limited liability company pursuant to this section.
 
18      (b)  The terms and conditions of a conversion of a
 
19 partnership or limited partnership to a limited liability company
 
20 shall be approved by all of the partners or by the number or
 
21 percentage of the partners required for conversion in the
 
22 partnership agreement.
 
23      (c)  An agreement of conversion approved under subsection
 

 
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 1 (b) shall set forth the terms and conditions of the conversion of
 
 2 the interests of the general partners in the case of a general
 
 3 partnership and the interests of the general partners and limited
 
 4 partners in the case of limited partnership, being converted into
 
 5 interests in the limited liability company and any cash or other
 
 6 consideration to be paid or delivered as a result of the
 
 7 conversion or any combination thereof.
 
 8      (d)  Upon compliance with subsection (b) and section 428-
 
 9 908, the general partnership or limited partnership shall file
 
10 articles or organization in the office of the director which
 
11 satisfy the requirements of section 428-203 and contain:
 
12      (1)  A statement that the general partnership or limited
 
13           partnership was converted to a limited liability
 
14           company;
 
15      (2)  The name of the former partnership or limited
 
16           partnership;
 
17      (3)  A statement detailing the approvals by the general
 
18           partners in the case of a general partnership
 
19           conversion, and the general partners and limited
 
20           partners in the case of a limited partnership
 
21           conversion, noting the respective votes taken required
 
22           to approve the conversion under subsection (b);
 
23      (4)  A statement of cancellation of the partnership
 

 
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 1           registration statement in the case of a general
 
 2           partnership conversion, or statement of cancellation of
 
 3           the certificate of limited partnership in the case of a
 
 4           limited partnership conversion, specifying an effective
 
 5           date as provided in subsection (f) if the effective
 
 6           date is not to be the date of filing; and
 
 7      (5)  A statement of compliance with section 428-908.
 
 8      (e)  In the case of a general or limited partnership, the
 
 9 filing of the articles of organization under subsection (d)
 
10 cancels the partnership registration statement or the certificate
 
11 of limited partnership.
 
12      (f)  A conversion becomes effective upon the filing of the
 
13 articles of organization or upon the time and date subsequent to
 
14 the filing as set forth in the articles but not more than thirty
 
15 days after being filed.
 
16      (g)  A general partner who becomes a member of a limited
 
17 liability company as a result of a conversion remains liable as a
 
18 general partner for any obligation incurred by the general
 
19 partnership or limited partnership before the conversion has
 
20 taken effect.  A general partner's liability for all obligations
 
21 of the limited liability company incurred after the conversion
 
22 becomes effective shall be that of a member of the limited
 
23 liability company.
 

 
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 1      (h)  A limited partner who becomes a member as a result of a
 
 2 conversion remains liable only to the extent the limited partner
 
 3 was liable for an obligation incurred by the limited partnership
 
 4 before the conversion takes effect."]
 
 5      SECTION 25.  In codifying the new sections added by sections
 
 6 1, 2, 3, 4, 5, and 6 of this Act, the revisor of statutes shall
 
 7 substitute appropriate section numbers for the letters used in
 
 8 the new sections designated in this Act.
 
 9      SECTION 26.  Statutory material to be repealed is bracketed.
 
10 New statutory material is underscored.
 
11      SECTION 27.  This Act shall take effect on July 1, 2000.