1. A. A corporation, partnership or limited partnership may be converted to a limited liability company pursuant to this section.
2. B. The terms and conditions of a conversion of a corporation, partnership or limited partnership to a limited liability company shall be approved in the manner specifically provided for by the document, instrument, agreement or other writing governing the internal affairs of the corporation, partnership or limited partnership concerning conversions or, in the absence of such a provision, by all of the shareholders or partners, as the case may be.
3. C. An agreement of conversion shall set forth the terms and conditions of the conversion of the owners' interests in the converting entity into interests in the converted entity or the cash or other consideration to be paid or delivered as a result of the conversion of the owners' interests or a combination of these.

4. D. After a conversion is approved pursuant to Subsection B of this section, the corporation, partnership or limited partnership being converted shall file articles of organization with the commission [secretary of state] that satisfy the requirements of Section 53-19-8 NMSA 1978 and a statement containing the items set forth below:

   1. (1) a statement that the corporation or partnership was converted to a limited liability company from a corporation, partnership or limited partnership;
   2. (2) its former name;
   3. (3) a statement of the number of votes cast by the shareholders or partners entitled to vote for and against the conversion and, if the vote is less than unanimous, the number or percentage required to approve the conversion pursuant to Subsection B of this section; and
   4. (4) in the case of a corporation or a limited partnership, a statement that the certificate of incorporation or certificate of limited partnership is to be canceled as of the date the conversion takes effect.
5. E. In the case of a corporation or a limited partnership, the filing of articles of organization pursuant to Subsection D of this section cancels its certificate of incorporation or certificate of limited partnership as of the date the conversion took effect.
6. F. A conversion takes effect when articles of organization are filed with the commission [secretary of state] or at any later date specified in the articles of organization.
7. G. A general partner who becomes a member of a limited liability company as a result of a conversion remains liable as a partner for an obligation incurred by the partnership or limited partnership before the conversion takes effect.
8. H. A general partner's liability for all obligations of the limited liability company incurred after the conversion takes effect is that of a member of the company. A limited partner who becomes a member as a result of a conversion remains liable only to the extent the limited partner was liable for an obligation incurred by the limited partnership before the conversion took effect.

History: 1978 Comp., § 53-19-60, enacted by Laws 1995, ch. 213, § 8; 2001, ch. 200, § 78; 2003, ch. 318, § 56.

ANNOTATIONS

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as provided by law, including the performance of the functions of the former corporations bureau of the public regulation commission, and that except for Subsection D of 53-5-8 NMSA 1978, references to the "public regulation commission", "state corporation commission" or "commission" shall be construed to be references to the secretary of state. See 8-4-7 NMSA 1978.

Repeals and reenactments. — Laws 1995, ch. 213, § 8 repealed 53-19-60 NMSA 1978, as enacted by Laws 1993, ch. 280, § 60, relating to approval of merger or consolidation, and enacted a new section, effective June 16, 1995.

The 2003 amendment, effective July 1, 2003, in Subsection B, inserted "specifically" following "in the manner", inserted "concerning conversions" following "or limited partnership"; substituted "a statement containing the items set forth below" for "that also contain" at the end of Subsection D.

The 2001 amendment, effective July 1, 2001, substituted "conversion of corporation, partnership or limited" for "conversion of partnership of limited" in the section heading; amended the section to include corporations in its provisions; in Subsection B, substituted the language following "be approved" for "by all of the partners or by a number or percentage of the partners required for conversion in the partnership agreement"; in Subsection C, substituted "owners' interests in the converting entity" for "partners' interests", "entity" for "limited liability company" and "owners' interests" for "partners' interests"; and in Subsection D, inserted "shareholders or" preceding "partners" in Paragraph (3).

The Limited Liability Company Act does not authorize the secretary of state to convert a nonprofit corporation to a profit corporation or limited liability company. — The Limited Liability Company Act (LLC Act), 53-19-1 to 53-19-74 NMSA 1978, contains specific references to conversions from one business entity type to another, namely a corporation, partnership or limited partnership may be converted to a limited liability company (LLC) or an LLC may be converted to a corporation, partnership or limited partnership, but no provision of the LLC Act provides for other types of entity transformations, such as a conversion of a nonprofit corporation to another type of business entity like a profit corporation or an LLC. Accordingly, the secretary of state cannot convert previously licensed nonprofit corporation medical cannabis producers to domestic profit corporations or LLCs. Conversion of Medical Cannabis Distributors Nonprofits (8/27/21), Att'y Gen. Adv. Ltr. 2021-10.