Utah Revised Nonprofit Corporation Act
Utah Code Title 16, Chapter 6a
Click here for the current Nonprofit Corporation Act.
The below is not updated with new changes to the law after 2018!
16-6a-1008. Conversion to a
business corporation.
(1) (a) A domestic nonprofit corporation may convert to a
corporation subject to Chapter 10a, Utah Revised Business Corporation
Act, by filing an amendment of its articles of incorporation with the division
pursuant to this section.
(b) The day on which a nonprofit domestic corporation
files an amendment under this section, the domestic nonprofit corporation
becomes a corporation subject to Chapter 10a, Utah Revised Business
Corporation Act, except that, notwithstanding Section 16-10a-203,
the existence of the nonprofit corporation is considered to commence on the day
on which the converting corporation:
(i)
commenced its existence under this chapter; or
(ii)
otherwise was created, formed, incorporated, or came into being.
(2) The amendment of the articles of incorporation to
convert to a corporation shall:
(a) revise the statement of purpose;
(b) delete:
(i) the
authorization for members; and
(ii) any
other provisions relating to memberships;
(c) authorize shares:
(i)
stating the number of shares; and
(ii)
including the information required by Section 16-10a-601 with
respect to each class of shares the corporation is to be authorized to issue;
(d) make such other changes as may be necessary or
desired; and
(e) if the corporation has any members, provide for:
(i) the
cancellation of the memberships; or
(ii) the
conversion of the memberships to shares of the corporation.
(3) If the nonprofit corporation has any voting members, an
amendment to convert to a corporation shall be approved by all of the voting members
regardless of limitations or restrictions on the voting rights of the members.
(4) If an amendment to the articles of incorporation filed
pursuant to this section is included in a merger agreement, this section
applies, except that any provisions for cancellation or conversion of
memberships:
(a) shall be in the merger agreement; and
(b) may not be in the amendment of the articles of
incorporation.
(5) A conversion under this section may not result in a
violation, directly or indirectly, of:
(a) Section 16-6a-1301;
or
(b) any other provision of this chapter.
(6) The conversion of a nonprofit corporation into a
corporation does not affect:
(a) an obligation or liability of the converting
nonprofit corporation incurred before its conversion to a corporation; or
(b) the personal liability of any person incurred
before the conversion.
(7) (a) (i) When a conversion is effective under this
section, for purposes of the laws of this state, the things listed in
Subsection (7)(a)(ii):
(A)
vest in the corporation to which the nonprofit corporation converts;
(B)
are the property of the corporation; and
(C)
are not considered transferred by the converting nonprofit corporation to the
corporation by operation of this Subsection (7)(a).
(ii) This
Subsection (7)(a) applies to the following of the converting nonprofit
corporation:
(A)
its rights, privileges, and powers;
(B)
its interests in property, whether real, personal, or mixed;
(C)
debts due to the converting nonprofit corporation;
(D)
the debts, liabilities, and duties of the converting nonprofit corporation;
(E)
the rights and obligations under contract of the converting nonprofit
corporation; and
(F)
other things and causes of action belonging to the converting nonprofit corporation.
(b) The title to any real property vested by deed or
otherwise in a nonprofit corporation converting to a corporation does not
revert and is not in any way impaired by reason of this chapter or of the
conversion.
(c) A right of a creditor or a lien on property of a
converting nonprofit corporation that is described in Subsection (6)(a) or (b)
is preserved unimpaired.
(d) A debt, liability, or duty of a converting
nonprofit corporation:
(i)
remains attached to the corporation to which the nonprofit corporation
converts; and
(ii) may
be enforced against the corporation to the same extent as if the debts,
liabilities, and duties had been incurred or contracted by the corporation in
its capacity as a corporation.
(e) A converted nonprofit corporation upon conversion
to a corporation pursuant to this section is considered the same entity as the
corporation.
(f) In connection with a conversion of a nonprofit
corporation to a corporation under this section, the interests or rights in the
nonprofit corporation which is to be converted may be exchanged or converted
into one or more of the following:
(i) cash,
property, interests, or rights in the corporation to which it is converted; or
(ii) cash,
property or interests in, or rights in another entity.
(g) Unless otherwise agreed:
(i) a converting nonprofit corporation is not required
solely as a result of the conversion to:
(A)
wind up its affairs;
(B)
pay its liabilities; or
(C)
distribute its assets; and
(ii) a
conversion is not considered to constitute a dissolution of the nonprofit
corporation, but constitutes a continuation of the existence of the nonprofit
corporation in the form of a corporation.