Chapter
088
2006 -- S 2936
Enacted 06/13/06
A N A
C T
RELATING TO
CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- THE RHODE ISLAND LIMITED
LIABILITY COMPANY ACT
Introduced By: Senator F
Caprio
Date Introduced: March 15,
2006
It is
enacted by the General Assembly as follows:
SECTION
1. Chapter 7-16 of the General Laws entitled "The Rhode Island Limited
Liability
Company Act" is hereby amended by adding thereto the following section:
7-16-5.4.
Conversion of sole proprietorship to a limited liability company. – (a)
Any
sole
proprietorship owned by a Rhode Island resident may convert to a limited
liability company
by
filing articles of organization that meet the requirements of section 7-16-6 or
by filing an
amendment
or restatement of articles of organization of an existing limited liability
company that
meets
the requirements of section 7-16-2, accompanied in any case by a certificate of
conversion
to a
limited liability company, which shall include the following:
(1)
The name of the former sole proprietorship and the name of the limited
liability
company
as set forth in its articles of organization; and
(2)
The date the sole proprietor commenced his or her business.
(b)
Following the conversion of the sole proprietorship to a limited liability
company:
(1)
The limited liability company shall upon and after conversion possess all the
rights,
privileges,
immunities, powers, and franchises, of a public as well as a private nature, of
the
former
sole proprietorship and shall be subject to all the restrictions, disabilities,
and duties of the
former
sole proprietorship to the extent those rights, privileges, immunities, powers,
franchises,
restrictions,
disabilities and duties were applicable to the former sole proprietorship and
to the extent
those
rights, privileges, immunities, powers, franchises, restrictions, disabilities,
and duties are
applicable
to the limited company after the conversion;
(2)
All property, real, personal and mixed, and all debts due on whatever account
and all
other
choices in action and all and every other interest of or belonging to the
former sole
proprietorship
shall be vested in the limited liability company after the conversion without
further
act
or deed;
(3)
The title to all real estate and any interest in it vested in the former sole
proprietorship
and
in the certificate of conversion identified as being part of the conversion and
in the limited
liability
company shall not revert or be in any way impaired by reason of the conversion;
(4)
The limited liability company shall be responsible and liable for all
liabilities and
obligations
of the former sole proprietorship, and any claim existing or action or
proceeding
pending
by or against the former sole proprietorship may be prosecuted as if the
conversion had
not
taken place, or the limited liability company may be substituted in the action;
(5)
Neither the rights of creditors nor any liens on the property of the former
sole
proprietorship
shall be impaired by the conversion;
(6)
Nothing in this section shall abridge or impair any rights that may otherwise
be
available
to the owner of the former sole proprietorship, except as amended in connection
with
the conversion,
and under applicable law; and
(7)
The limited liability company shall be deemed to be the successor of the sole
proprietorship
and to have succeeded by operation of law to the interest in all property,
real,
personal
and mixed or any interest therein of the former sole proprietorship.
SECTION
2. This act shall take effect upon passage.
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LC02776
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