Chapter 100

2006 -- H 7910

Enacted 06/13/06

A N A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- THE RHODE ISLAND LIMITED LIABILITY COMPANY ACT

Introduced By: Representatives Anguilla, D Caprio, Rice, Flaherty, and Lally

Date Introduced: March 21, 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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LC02757

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