GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

S	4 

SENATE BILL 835
Judiciary I Committee Substitute Adopted 4/26/99
House Committee Substitute Favorable 6/30/99
House Committee Substitute #2 Favorable 7/5/99

Short Title:  Revise Law Governing Mergers.	(Public)

─────────────────────────────────────── 
Sponsors:

─────────────────────────────────────── 
Referred to:  

─────────────────────────────────────── 

April 12, 1999

A BILL TO BE ENTITLED
AN ACT TO REVISE THE LAW GOVERNING MERGERS, CONSOLIDATIONS, AND CONVERSIONS AMONG BUSINESS CORPORATIONS, NONPROFIT CORPORATIONS, AND UNINCORPORATED ENTITIES, INCLUDING LIMITED LIABILITY COMPANIES AND PARTNERSHIPS, FOR THE PURPOSE OF CONFORMING THE LAWS WITH THOSE OF OTHER STATES AND MODERN BUSINESS PRACTICES; TO ALLOW CONVERSION OF A MUTUAL INSURANCE COMPANY TO A STOCK INSURANCE COMPANY; AND TO PERMIT HOMEOWNER ASSOCIATIONS TO DISTRIBUTE SURPLUS FUNDS.
The General Assembly of North Carolina enacts:
PART I.  CORPORATIONS.
Section 1.1.  G.S. 55-1-20(f) reads as rewritten:
"(f)	A document submitted by a domestic or foreign corporation or nonprofit corporation must be executed:
(1)	By the chairman of the board of directors, by its president, or by another of its officers;
(2)	If directors have not been selected or the corporation has not been formed, by an incorporator; or
(3)	If the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.
A document submitted by an unincorporated entity must be executed by a person authorized to execute documents (i)	pursuant to G.S. 57C-1-20(f) if the unincorporated entity is a domestic or foreign limited liability company, (ii) pursuant to G.S. 59-204 if the unincorporated entity is a domestic or foreign limited partnership, or (iii) pursuant to G.S. 59-73.7(a)(4) if the unincorporated entity is any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State."
Section 1.2.  G.S. 55-1-40(9) reads as rewritten:
"(9)	'Entity' includes (without limiting the meaning of such term in Article 9) corporation and foreign corporation; nonprofit corporation; professional corporation; limited liability company; profit and nonprofit unincorporated association; business trust, estate, partnership, trust, and two or more persons having a joint or common economic interest; and state, United States, and foreign government."
Section 1.3.  G.S. 55-1-40 is amended by adding the following new subdivision, to be placed by the Codifier of Statutes in the appropriate order, to read:
"(25a)	'Unincorporated entity' means a domestic or foreign limited liability company as defined in G.S. 57C-1-03, a domestic or foreign limited partnership as defined in G.S. 59-102, or any other partnership as defined in G.S. 59-36, whether or not formed under the laws of this State, including a registered limited liability partnership as defined in G.S. 59-32 and any other limited liability partnership formed under a law other than the laws of this State."
Section 1.4.  G.S. 55-4-05 reads as rewritten:
"§ 55-4-05.  Real property records.
(a)	Whenever the name of any domestic or foreign corporation holding title to real property in this State is changed upon amendment to the articles of incorporation or whenever title to its real property in this State is vested by operation of law in another entity upon merger, consolidation, or conversion of the corporation, a certificate reciting the name change, merger, consolidation, or conversion shall be recorded in the office of the register of deeds of the county where the property lies, or if the property is located in more than one county, then in each county where any portion of the property lies.
(b)	The Secretary of State shall adopt uniform certificates to be furnished for registration in accordance with this section.  In the case of a foreign corporation, a similar certificate by any competent authority of the jurisdiction of incorporation may be registered in accordance with this section.
(c)	The certificate required by this section shall be recorded by the register of deeds in the same manner as deeds, and for the same fees, but no formalities as to acknowledgement, probate, or approval by any other officer shall be required.  The former name of the corporation holding title to the real property before the name change, merger, consolidation, or conversion shall appear in the 'Grantor' index, and the new name of the corporation or the name of the other entity holding title to the real property by virtue of the merger, consolidation, or conversion shall appear in the 'Grantee' index."
Section 1.5.  G.S. 55-9-01(b)(1) reads as rewritten:
"(1)	'Business combination' includes any merger or consolidation of a corporation with or into any other corporation or any unincorporated entity, or the sale or lease of all or any substantial part of the corporation's assets to, or any payment, sale or lease to the corporation or any subsidiary thereof in exchange for securities of the corporation of any assets (except assets having an aggregate fair market value of less than five million dollars ($5,000,000)) of any other entity."
Section 1.6.  G.S. 55-9-04(d) reads as rewritten:
"(d)	Nothing contained in this Article shall be construed to relieve any other entity from any fiduciary obligation imposed by law.  This Article shall be broadly construed so as to be applicable to any transaction reasonably calculated to avoid the application of the provisions hereof including, without limitation, any merger or other recapitalization, initiated by or for the benefit of an other entity that owns more than twenty percent (20%) of the voting shares, which would reincorporate a corporation under the laws of another state or which would reorganize a corporation as an unincorporated entity."
Section 1.7.  G.S. 55-11-06(a)(4) reads as rewritten:
"(4)	A proceeding pending by or against any corporation party to the merger may be continued as if the merger did not occur or the surviving corporation may be substituted in the proceeding for the corporation whose existence ceased;".
Section 1.8.  Article 11 of Chapter 55 of the General Statutes is amended by adding a new section to read:
"§ 55-11-10.  Merger with unincorporated entity.
(a)	As used in this section, 'business entity' means a domestic corporation as defined in G.S. 55-1-40 (including a professional corporation as defined in G.S. 55B-2), a foreign corporation as defined in G.S. 55-1-40 (including a foreign professional corporation as defined in G.S. 55B-16), a domestic or foreign nonprofit corporation as defined in G.S. 55A-1-40, a domestic or foreign limited liability company as defined in G.S. 57C-1-03, a domestic or foreign limited partnership as defined in G.S. 59-102, and any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State (including a registered limited liability partnership as defined in G.S. 59-32 and any limited liability partnership formed under a law other than the laws of this State).
(b)	One or more domestic corporations may merge with one or more unincorporated entities and, if desired, one or more foreign corporations, domestic nonprofit corporations, or foreign nonprofit corporations if:
(1)	The merger is permitted by the laws of the state or country governing the organization and internal affairs of each other merging business entity; and
(2)	Each merging domestic corporation and each other merging business entity comply with the requirements of this section and, to the extent applicable, the laws referred to in subdivision (1) of this subsection.
(c)	Each merging domestic corporation and each other merging business entity shall approve a written plan of merger containing:
(1)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(2)	The name of the merging business entity that shall survive the merger;
(3)	The terms and conditions of the merger;
(4)	The manner and basis for converting the interests in each merging business entity into interests, obligations, or securities of the surviving business entity or into cash or other property in whole or in part; and
(5)	If the surviving business entity is a domestic corporation, any amendments to its articles of incorporation that are to be made in connection with the merger.
The plan of merger may contain other provisions relating to the merger.
In the case of a domestic corporation, approval of the plan of merger requires that the plan of merger be adopted by its board of directors as provided in G.S. 55-11-03 and, unless shareholder approval is not required under subsection (g)	of G.S. 55-11-03, be approved by its shareholders as provided in G.S. 55-11-03.  In the case of each other merging business entity, the plan of merger must be approved in accordance with the laws of the state or country governing the organization and internal affairs of that merging business entity.
After a plan of merger has been approved by a domestic corporation but before the articles of merger become effective, the plan of merger (i)	may be amended as provided in the plan of merger, or (ii) may be abandoned (subject to any contractual rights) as provided in the plan of merger or, if there is no such provision, as determined by the board of directors without further shareholder action.
(d)	After a plan of merger has been approved by each merging domestic corporation and each other merging business entity as provided in subsection (c) of this section, the surviving business entity shall deliver articles of merger to the Secretary of State for filing.  The articles of merger shall set forth:
(1)	The plan of merger;
(2)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(3)	The name and address of the surviving business entity;
(4)	A statement that the plan of merger has been approved by each merging business entity in the manner required by law; and
(5)	The effective date and time of merger if it is not to be effective at the time of filing of the articles of merger.
If the plan of merger is amended or abandoned before the articles of merger become effective, the surviving business entity promptly shall deliver to the Secretary of State for filing an amendment to the articles of merger reflecting the amendment or abandonment of the plan of merger.
Certificates of merger shall also be registered as provided in G.S. 47-18.1.
(e)	A merger takes effect when the articles of merger become effective.  When a merger takes effect:
(1)	Each other merging business entity merges into the surviving business entity and the separate existence of each merging business entity except the surviving business entity ceases;
(2)	The title to all real estate and other property owned by each merging business entity is vested in the surviving business entity without reversion or impairment;
(3)	The surviving business entity has all liabilities of each merging business entity;
(4)	A proceeding pending by or against any merging business entity may be continued as if the merger did not occur, or the surviving business entity may be substituted in the proceeding for a merging business entity whose separate existence ceases in the merger;
(5)	If a domestic corporation is the surviving business entity, its articles of incorporation shall be amended to the extent provided in the plan of merger;
(6)	The interests in each merging business entity that are to be converted into interests, obligations, or securities of the surviving business entity or into the right to receive cash or other property are thereupon so converted, and the former holders of the interests are entitled only to the rights provided to them in the articles of merger or, in the case of former holders of shares in a domestic corporation, any rights they may have under Article 13 of this Chapter; and
(7)	If the surviving business entity is not a domestic corporation, the surviving business entity is deemed to agree that it will promptly pay to the dissenting shareholders of any merging domestic corporation the amount, if any, to which they are entitled under Article 13 of this Chapter and otherwise to comply with the requirements of Article 13 as if it were a surviving domestic corporation in the merger.
The merger shall not affect the liability or absence of liability of any holder of an interest in a merging business entity for any acts, omissions, or obligations of any merging business entity made or incurred prior to the effectiveness of the merger.  The cessation of separate existence of a merging business entity in the merger shall not constitute a dissolution or termination of the merging business entity.
If the surviving business entity is not a domestic limited liability company, a domestic corporation, a domestic nonprofit corporation, or a domestic limited partnership, when the merger takes effect the surviving business entity is deemed:
(1)	To agree that it may be served with process in this State in any proceeding for enforcement of (i) any obligation of any merging domestic limited liability company, domestic corporation, domestic nonprofit corporation, domestic limited partnership, or other partnership as defined in G.S. 59-36 that is formed under the laws of this State, (ii) the rights of dissenting shareholders of any merging domestic corporation under Article 13 of this Chapter, and (iii) any obligation of the surviving business entity arising from the merger; and
(2)	If the surviving business entity does not have a registered agent in this State, to have appointed the Secretary of State as its registered agent for service of process in any such proceeding until such time as the surviving business entity appoints a registered agent in this State.  Service on the Secretary of State of any such process shall be made by delivering to and leaving with the Secretary of State or with any clerk authorized by the Secretary of State to accept service of process, duplicate copies of such process.  Upon receipt of service of process on behalf of a surviving business entity, the Secretary of State shall immediately mail a copy of the process by registered or certified mail, return receipt requested, to the surviving business entity at its address shown in the articles of merger or, if an application for a certificate of withdrawal by reason of merger has been filed, at the address for service of process contained in that application.
(f)	This section does not apply to a merger that does not include a merging unincorporated entity."
Section 1.9.  G.S. 55-15-21 reads as rewritten:
"§ 55-15-21.  Withdrawal of foreign corporation by reason of a merger, consolidation, or conversion.
(a)	Whenever a foreign corporation authorized to transact business in this State ceases its separate existence as a result of a statutory merger or consolidation permitted by the laws of the state or country under which it was incorporated, or converts into another entity as permitted by those laws, the surviving or resulting entity shall apply for a certificate of withdrawal for the foreign corporation by delivering to the Secretary of State for filing a copy of the articles of merger, consolidation, or conversion or a certificate reciting the facts of the merger, consolidation, or conversion, duly authenticated by the Secretary of State or other official having custody of corporate records in the state or country under the laws of which such foreign corporation was incorporated.  If the surviving or resulting entity is not authorized to transact business in this State the articles or certificate must be accompanied by an application which must set forth:
(1)	The name of the foreign corporation authorized to transact business in this State, the type of entity and name of the surviving or resulting entity, and a statement that the surviving or resulting entity is not authorized to transact business in this State;
(2)	A statement that the surviving or resulting entity consents that service of process based upon any cause of action arising in this State, or arising out of business transacted in this State, during the time the foreign corporation was authorized to transact business in this State may thereafter be made by service thereof on the Secretary of State;
(3)	A mailing address to which the Secretary of State may mail a copy of any process served on him under subdivision (a)(2); and
(4)	A commitment to notify the Secretary of State in the future of any change in its mailing address.
(b)	If the Secretary of State finds that the articles or certificate and the application for withdrawal, if required, conform to law the Secretary of State shall:
(1)	Endorse on the articles or certificate and the application for withdrawal, if required, the word 'filed' and the hour, day, month and year of the filing thereof;
(2)	File the articles or certificate and the application, if required;
(3)	Issue a certificate of withdrawal; and
(4)	Send to the surviving or resulting entity or its representative the certificate of withdrawal, together with the exact or conformed copy of the application, if required, affixed thereto."
PART II.  NONPROFIT CORPORATIONS.
Section 2.1.  G.S. 55A-1-20(f) reads as rewritten:
"(f)	A document submitted by a domestic or foreign corporation or business corporation shall be executed:
(1)	By the presiding officer of the board of directors by its president, or by another of its officers;
(2)	If directors have not been selected or the corporation has not been formed, by an incorporator; or
(3)	If the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.
A document submitted by an unincorporated entity must be executed by a person authorized to execute documents (i)	pursuant to G.S. 57C-1-20(f) if the unincorporated entity is a domestic or foreign limited liability company, (ii) pursuant to G.S. 59-204 if the unincorporated entity is a domestic or foreign limited partnership, or (iii) pursuant to G.S. 59-73.7(a)(4) if the unincorporated entity is any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State."
Section 2.2.  G.S. 55A-1-40 is amended by adding the following new subdivision to read:
"(25a)	'Unincorporated entity' means a domestic or foreign limited liability company as defined in G.S. 57C-1-03, a domestic or foreign limited partnership as defined in G.S. 59-102, or any other partnership as defined in G.S. 59-36, whether or not formed under the laws of this State, including a registered limited liability partnership as defined in G.S. 59-32 and any other limited liability partnership formed under a law other than the laws of this State."
Section 2.3.  G.S. 55A-4-05 reads as rewritten:
"§ 55A-4-05.  Real property records.
(a)	Whenever the name of any domestic or foreign corporation holding title to real property in this State is changed upon amendment to the articles of incorporation or whenever title to its real property in this State is vested by operation of law in another entity upon merger, consolidation, or conversion of the corporation, a certificate reciting the name change, merger, consolidation, or conversion shall be recorded by the corporation or its successor in the office of the register of deeds of the county where the property lies, or if the property is located in more than one county, then in each county where any portion of the property lies.
(b)	The Secretary of State shall adopt uniform certificates to be furnished for recording in accordance with this section.  In the case of a foreign corporation, a similar certificate by any competent authority of the jurisdiction of incorporation may be recorded in accordance with this section.
(c)	The certificate required by this section shall be recorded by the register of deeds in the same manner as deeds, and for the same fees, but no formalities as to acknowledgement, probate, or approval by any other officer shall be required.  The former name of the corporation holding title to the real property before the name change, merger, consolidation, or conversion shall appear in the 'Grantor' index, and the new name of the corporation or the name of the other entity holding title to the real property by virtue of the merger, consolidation, or conversion shall appear in the 'Grantee' index."
Section 2.4.  G.S. 55A-11-02 reads as rewritten:
"§ 55A-11-02.  Limitations on mergers by charitable or religious corporations.
(a)	Without the prior approval of the superior court in a proceeding in which the Attorney General has been given written notice, a charitable or religious corporation may merge only with:
(1)	A charitable or religious corporation;
(2)	A foreign corporation that would qualify under this Chapter as a charitable or religious corporation;
(3)	A wholly owned foreign or domestic corporation (business or nonprofit) which is not a charitable or religious corporation, or an unincorporated entity, provided the charitable or religious corporation is the survivor in the merger and continues to be a charitable or religious corporation after the merger; or
(4)	A business or nonprofit corporation (foreign or domestic) other than a charitable or religious corporation, or an unincorporated entity, provided that: (i) on or prior to the effective date of the merger, assets with a value equal to the greater of the fair market value of the net tangible and intangible assets (including goodwill) of the charitable or religious corporation or the fair market value of the charitable or religious corporation if it were to be operated as a business concern are transferred or conveyed to one or more persons who would have received its assets under G.S. 55A-14-03(a)(1) and (2) had it dissolved; (ii) it shall return, transfer or convey any assets held by it upon condition requiring return, transfer or conveyance, which condition occurs by reason of the merger, in accordance with such condition; and (iii) the merger is approved by a majority of directors of the charitable or religious corporation who are not and will not become members, as 'member' is defined in G.S. 55A-1-40(16) or G.S. 57C-1-03, partners, limited partners, or shareholders in or directors, managers, officers, employees, agents, or consultants of the survivor in the merger.
(b)	At least 20 days before consummation of any merger of a charitable or religious corporation pursuant to subdivision (a)(4) of this section, notice, including a copy of the proposed plan of merger, shall be delivered to the Attorney General.
(c)	Without the prior written consent of the Attorney General, or approval of the superior court in a proceeding in which the Attorney General has been given notice, no member of a charitable or religious corporation may receive or retain any property as a result of a merger other than an interest as a member, as 'member' is defined in G.S. 55A-1-40(16), in the survivor of the merger. The Attorney General may consent to the transaction, or the court shall approve the transaction, if it is fair and not contrary to the public interest."
Section 2.5.  G.S. 55A-11-05(a)(4) reads as rewritten:
"(4)	A proceeding pending by or against any corporation party to the merger may be continued as if the merger did not occur or the surviving corporation may be substituted in the proceeding for the corporation whose existence ceased; and".
Section 2.6.  G.S. 55A-11-07 reads as rewritten:
"§ 55A-11-07.  Bequests, devises, and gifts.
Any bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance, that is made to a constituent corporation and that takes effect or remains payable after the merger, inures to the survivor in the merger unless the will or other instrument otherwise specifically provides."
Section 2.7.  Article 11 of Chapter 55A of the General Statutes is amended by adding a new section to read:
"§ 55A-11-09.  Merger with unincorporated entity.
(a)	As used in this section, 'business entity' means a domestic corporation as defined in G.S. 55-1-40 (including a professional corporation as defined in G.S. 55B-2), a foreign corporation as defined in G.S. 55-1-40 (including a foreign professional corporation as defined in G.S. 55B-16), a domestic or foreign nonprofit corporation as defined in G.S. 55A-1-40, a domestic or foreign limited liability company as defined in G.S. 57C-1-03, a domestic or foreign limited partnership as defined in G.S. 59-102, and any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State (including  a registered limited liability partnership as defined in G.S. 59-32 and any limited liability partnership formed under a law other than the laws of this State).
(b)	One or more domestic nonprofit corporations may merge with one or more unincorporated entities and, if desired, one or more foreign nonprofit corporations, domestic business corporations, or foreign business corporations if:
(1)	The merger is permitted by the laws of the state or country governing the organization and internal affairs of each of the other merging business entities;
(2)	Each merging domestic nonprofit corporation and each other merging business entity comply with the requirements of this section and, to the extent applicable, the laws referred to in subdivision (1) of this subsection; and
(3)	The merger complies with G.S. 55A-11-02, if applicable.
(c)	Each merging domestic nonprofit corporation and each other merging business entity shall approve a written plan of merger containing:
(1)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(2)	The name of the merging business entity that shall survive the merger;
(3)	The terms and conditions of the merger;
(4)	The manner and basis for converting the interests in each merging business entity into interests, obligations, or securities of the surviving business entity or into cash or other property in whole or in part; and
(5)	If the surviving business entity is a domestic nonprofit corporation, any amendments to its articles of incorporation that are to be made in connection with the merger.
The plan of merger may contain other provisions relating to the merger.
In the case of a domestic nonprofit corporation, approval of the plan of merger requires that the plan of merger be adopted as provided in G.S. 55A-11-03.  In the case of each other merging business entity, the plan of merger must be approved in accordance with the laws of the state or country governing the organization and internal affairs of such merging business entity.
After a plan of merger has been approved by a domestic nonprofit corporation but before the articles of merger become effective, the plan of merger (i)	may be amended as provided in the plan of merger, or (ii) may be abandoned (subject to any contractual rights) as provided in the plan of merger or, if there is no such provision, as determined by the board of directors.
(d)	After a plan of merger has been approved by each merging domestic nonprofit corporation and each other merging business entity as provided in subsection (c) of this section, the surviving business entity shall deliver articles of merger to the Secretary of State for filing.  The articles of merger shall set forth:
(1)	The plan of merger;
(2)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(3)	The name and address of the surviving business entity;
(4)	A statement that the plan of merger has been approved by each merging business entity in the manner required by law; and
(5)	The effective date and time of merger if it is not to be effective at the time of filing of the articles of merger.
If the plan of merger is amended or abandoned before the articles of merger become effective, the surviving business entity promptly shall deliver to the Secretary of State for filing an amendment to the articles of merger reflecting the amendment or abandonment of the plan of merger.
Certificates of merger shall also be registered as provided in G.S. 47-18.1.
(e)	A merger takes effect when the articles of merger become effective.  When a merger takes effect:
(1)	Each other merging business entity merges into the surviving business entity and the separate existence of each merging business entity except the surviving business entity ceases;
(2)	The title to all real estate and other property owned by each merging business entity is vested in the surviving business entity without reversion or impairment;
(3)	The surviving business entity has all liabilities of each merging business entity;
(4)	A proceeding pending by or against any merging business entity may be continued as if the merger did not occur, or the surviving business entity may be substituted in the proceeding for a merging business entity whose separate existence ceases in the merger;
(5)	If a domestic nonprofit corporation is the surviving business entity, its articles of incorporation shall be amended to the extent provided in the plan of merger;
(6)	The interests in each merging business entity that are to be converted into interests, obligations, or securities of the surviving business entity or into the right to receive cash or other property are thereupon so converted, and the former holders of the interests are entitled only to the rights provided to them in the articles of merger or, in the case of former holders of shares in a domestic business corporation, any rights they may have under Article 13 of Chapter 55 of the General Statutes; and
(7)	If the surviving business entity is not a domestic business corporation, the surviving business entity is deemed to agree that it will promptly pay to the dissenting shareholders of any merging domestic business corporation the amount, if any, to which they are entitled under Article 13 of Chapter 55 of the General Statutes and otherwise to comply with the requirements of Article 13 as if it were a surviving domestic business corporation in the merger.
The merger shall not affect the liability or absence of liability of any holder of an interest in a merging business entity for any acts, omissions, or obligations of any merging business entity made or incurred prior to the effectiveness of the merger.  The cessation of separate existence of a merging business entity in the merger shall not constitute a dissolution or termination of the merging business entity.
If the surviving business entity is not a domestic limited liability company, a domestic business corporation, a domestic nonprofit corporation, or a domestic limited partnership, when the merger takes effect the surviving business entity is deemed:
(1)	To agree that it may be served with process in this State in any proceeding for enforcement of (i) any obligation of any merging domestic limited liability company, domestic business corporation, domestic nonprofit corporation, domestic limited partnership, or other partnership as defined in G.S. 59-36 that is formed under the laws of this State, (ii) the rights of dissenting shareholders of any merging domestic business corporation under Article 13 of Chapter 55 of the General Statutes, and (iii) any obligation of the surviving business entity arising from the merger; and
(2)	If the surviving business entity does not have a registered agent in this State, to have appointed the Secretary of State as its registered agent for service of process in any such proceeding until such time as the surviving business entity appoints a registered agent in this State.  Service on the Secretary of State of any such process shall be made by delivering to and leaving with the Secretary of State or with any clerk authorized by the Secretary of State to accept service of process, duplicate copies of such process.  Upon receipt of service of process on behalf of a surviving business entity, the Secretary of State shall immediately mail a copy of the process by registered or certified mail, return receipt requested, to the surviving business entity at its address shown in the articles of merger or, if an application for a certificate of withdrawal by reason of merger has been filed, at the address for service of process contained in that application.
(f)	This section does not apply to a merger that does not include a merging unincorporated entity."
Section 2.8.  G.S. 55A-15-21 reads as rewritten:
"§ 55A-15-21.  Withdrawal of foreign corporation by reason of a merger, consolidation, or conversion.
(a)	Whenever a foreign corporation authorized to conduct affairs in this State ceases its separate existence as a result of a statutory merger or consolidation permitted by the laws of the state or country under which it was incorporated, or converts into another entity as permitted by those laws, the surviving or resulting entity shall apply for a certificate of withdrawal for the foreign corporation by delivering to the Secretary of State for filing a copy of the articles of merger, consolidation, or conversion or a certificate reciting the facts of the merger, consolidation, or conversion duly authenticated by the secretary of state or other official having custody of corporate records in the state or country under the laws of which the foreign corporation was incorporated.  If the surviving or resulting entity is not authorized to conduct affairs in this State, the articles or certificate shall be accompanied by an application which must set forth:
(1)	The name of the foreign corporation authorized to conduct affairs in this State, the type of entity and the name of the surviving or resulting entity, and a statement that the surviving or resulting entity is not authorized to conduct affairs in this State;
(2)	A statement that the surviving or resulting entity consents that service of process based upon any cause of action arising in this State, or arising out of affairs conducted in this State, during the time the foreign corporation was authorized to conduct affairs in this State may thereafter be made by service thereof on the Secretary of State;
(3)	A mailing address to which the Secretary of State may mail a copy of any process served on him under subdivision (a)(2) of this section; and
(4)	A commitment to notify the Secretary of State in the future of any change in its mailing address.
(b)	If the Secretary of State finds that the articles or certificate and the application for withdrawal, if required, conform to law the Secretary of State shall:
(1)	Endorse on the articles or certificate and the application for withdrawal, if required, the word 'filed', and the hour, day, month, and year of filing thereof;
(2)	File the articles or certificate and the application, if required;
(3)	Issue a certificate of withdrawal; and
(4)	Send to the surviving or resulting entity or its representative the certificate of withdrawal, together with the exact or conformed copy of the application, if required, affixed thereto."
PART III.  LIMITED LIABILITY COMPANIES.
Section 3.1.  G.S. 57C-1-20(f) reads as rewritten:
"(f)	A document submitted by a domestic or foreign limited liability company must be executed:
(1)	By a manager of the limited liability company;
(2)	If managers have not been selected, or if the limited liability company does not have a manager other than a member, by any member;
(3)	If the limited liability company has not been formed, by an organizer; or
(4)	If the limited liability company is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.
A document submitted by a business entity other than a domestic or foreign limited liability company must be executed by a person authorized to execute documents (i)	pursuant to G.S. 55-1-20(f) if the business entity is a corporation or foreign corporation, (ii) pursuant to G.S. 55A-1-20(f) if the business entity is a domestic or foreign nonprofit corporation, (iii) pursuant to G.S. 59-204 if the business entity is a domestic or foreign limited partnership, or (iv) pursuant to G.S. 59-73.7(a)(4) if the business entity is any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State."
Section 3.2.  G.S. 57C-1-03 is amended by adding a new subdivision to read:
"(3a)	Business entity. – A corporation (including a professional corporation as defined in G.S. 55B-2), a foreign corporation (including a foreign professional corporation as defined in G.S. 55B-16), a domestic or foreign nonprofit corporation as defined in G.S. 55A-1-40, a domestic or foreign limited liability company, a domestic or foreign limited partnership as defined in G.S. 59-102, or any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State (including a registered limited liability partnership as defined in G.S. 59-32 and any other limited liability partnership formed under a law other than the laws of this State."
Section 3.3.  G.S. 57C-1-03(15) reads as rewritten:
"(15)	Membership interest or interest. –In the context of a member of a limited liability company, the terms mean all of a member's rights in the limited liability company, including without limitation the member's share of the profits and losses of the limited liability company, the right to receive distributions of the limited liability company assets, any right to vote, and any right to participate in management."
Section 3.4.  G.S. 57C-2-20(a) reads as rewritten:
"(a)	One or more persons may organize a limited liability company by delivering executed articles of organization to the Secretary of State for filing.  A limited liability company may also be formed through the conversion of another business entity pursuant to Part 1 of Article 9A of this Chapter."
Section 3.5.  G.S. 57C-2-34 reads as rewritten:
"§ 57C-2-34.  Real property records.
(a)	Whenever the name of any domestic or foreign limited liability company holding title to real property in this State is changed upon amendment to its articles of organization or whenever title to its real property in this State is vested by operation of law in another entity upon merger, consolidation, or conversion of the limited liability company, a certificate reciting the name change, merger, consolidation, or conversion shall be recorded in the office of the register of deeds of the county where the property lies, or if the property is located in more than one county, then in each county where any portion of the property lies.
(b)	The Secretary of State shall adopt uniform certificates to be furnished for registration in accordance with this section.  In the case of a foreign limited liability company, a similar certificate by any competent authority of the jurisdiction of organization may be registered in accordance with this section.
(c)	The certificate required by this section shall be recorded by the register of deeds in the same manner as deeds, and for the same fees, but no formalities as to acknowledgement, probate, or approval by any other officer shall be required.  The former name of the limited liability company holding title to the real property before the name change, merger, consolidation, or conversion shall appear in the 'Grantor' index, and the new name of the limited liability company or the name of the other entity holding title to the real property by virtue of the merger, consolidation, or conversion, as applicable, shall appear in the 'Grantee' index."
Section 3.6.  G.S. 57C-7-12 reads as rewritten:
"§ 57C-7-12.  Withdrawal of limited liability company by reason of a merger, consolidation, or conversion.
(a)	Whenever a foreign limited liability company authorized to transact business in this State ceases its separate existence as a result of a statutory merger, consolidation, or conversion permitted by the laws of the state or country under which it was organized, or converts into another type of entity as permitted by those laws, the surviving or resulting entity shall apply for a certificate of withdrawal for the foreign limited liability company by delivering to the Secretary of State for filing a copy of the articles of merger, consolidation, or conversion or a certificate reciting the facts of the merger, consolidation, or conversion, duly authenticated by the Secretary of State or other official having custody of limited liability company records in the state or country under the laws of which the foreign limited liability company was organized.  If the surviving or resulting entity is not authorized to transact business in this State, the articles or certificate must be accompanied by an application which must set forth:
(1)	The name of the foreign limited liability company authorized to transact business in this State, the type of entity and name of the surviving or resulting entity, and a statement that the surviving or resulting entity is not authorized to transact business in this State;
(2)	A statement that the surviving or resulting entity consents that service of process based upon any cause of action arising in this State, or arising out of business transacted in this State, during the time the foreign limited liability company was authorized to transact business in this State, may thereafter be made by service thereof on the Secretary of State;
(3)	A mailing address to which the Secretary of State may mail a copy of any process served on him under subdivision (a)(2) of this section; and
(4)	A commitment to notify the Secretary of State in the future of any change in its mailing address.
(b)	If the Secretary of State finds that the articles or certificate and the application for withdrawal, if required, conform to law, the Secretary of State shall:
(1)	Endorse on the articles or certificate and the application for withdrawal, if required, the word 'filed' and the hour, day, month, and year of filing thereof;
(2)	File the articles or certificate and the application, if required;
(3)	Issue a certificate of withdrawal; and
(4)	Send to the surviving or resulting entity or its representative the certificate of withdrawal, together with the exact or conformed copy of the application, if required, affixed thereto."
Section 3.7.  Article 9 of Chapter 57C of the General Statutes is repealed.  Chapter 57C of the General Statutes is amended by adding a new Article to read:
"ARTICLE 9A.
"Conversion and Merger.

"Part 1.  Conversions.
"§ 57C-9A-01.  Conversion.
(a)	A domestic limited liability company may convert to a domestic limited partnership pursuant to Part 10A of Article 5 of Chapter 59 of the General Statutes.
(b)	A foreign limited liability company, a domestic or foreign limited partnership as defined in G.S. 59-102, or any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State (including a registered limited liability partnership as defined in G.S. 59-32 and any other limited liability partnership formed under a law other than the laws of this State) may convert to a domestic limited liability company if:
(1)	The converting business entity complies with the requirements of this Part; and
(2)	If the converting business entity is a foreign limited liability company, a foreign limited partnership, or other partnership as defined in G.S. 59-36 whose organization and internal affairs are governed by a law other than the laws of this State, the conversion is permitted by the laws of the state or country governing the organization and internal affairs of the converting business entity and the converting business entity complies with those laws.
"§ 57C-9A-02.  Plan of conversion.
(a)	The holders of the interests in the converting business entity shall approve a written plan of conversion containing:
(1)	The name of the resulting domestic limited liability company into which the converting business entity shall convert;
(2)	The terms and conditions of the conversion; and
(3)	The manner and basis for converting the interests in the converting business entity into interests, obligations, or securities of the resulting domestic limited liability company or into cash or other property in whole or in part.
The plan of conversion may also contain other provisions relating to the conversion.
(b)	In the case of a domestic limited partnership or other partnership as defined in G.S. 59-36 whose organization and internal affairs are governed by the laws of this State, the plan of conversion must be approved in the manner provided for the approval of such a conversion in a written partnership agreement that is binding on all the partners or, if there is no such provision, by the unanimous consent of all the partners.  In the case of a foreign limited liability company, a foreign limited partnership, or other partnership as defined in G.S. 59-36 whose organization and internal affairs are governed by a law other than the laws of this State, the plan of conversion must be approved in accordance with the laws of the state or country governing the organization and internal affairs of the converting business entity.
(c)	After a plan of conversion has been approved as provided in subsection (b) of this section, but before articles of organization for the resulting domestic limited liability company become effective, the plan of conversion may be amended or abandoned to the extent provided in the plan of conversion.
"§ 57C-9A-03.  Filing of articles of organization by converting business entity.
(a)	After a plan of conversion has been approved by the converting business entity as provided in G.S. 57C-9A-02, the converting business entity shall deliver articles of organization to the Secretary of State for filing.  In addition to the matters required or permitted by G.S. 57C-2-21, the articles of organization shall state:
(1)	That the domestic limited liability company is being formed pursuant to a conversion of another business entity;
(2)	The name of the converting business entity, its type of business entity, and the state or country whose laws govern its organization and internal affairs; and
(3)	That a plan of conversion has been approved by the converting business entity as required by law.
If the plan of conversion is abandoned before the articles of organization become effective, the converting business entity promptly shall deliver to the Secretary of State for filing an amendment to the articles of organization reflecting the abandonment of the plan of conversion.
(b)	The conversion takes effect when the articles of organization become effective.
(c)	The converting business entity shall furnish a copy of the plan of conversion, on request and without cost, to any member or partner (whether general or limited) of the converting business entity.
(d)	Certificates of conversion shall also be registered as provided in G.S. 47-18.1.
"§ 57C-9A-04.  Effects of conversion.
When the conversion takes effect:
(1)	The converting business entity ceases its prior form of organization and continues in existence as the resulting domestic limited liability company;
(2)	The title to all real estate and other property owned by the converting business entity continues vested in the resulting domestic limited liability company without reversion or impairment;
(3)	All liabilities of the converting business entity continue as liabilities of the resulting domestic limited liability company;
(4)	A proceeding pending by or against the converting business entity may be continued as if the conversion did not occur; and
(5)	The interests in the converting business entity that are to be converted into interests, obligations, or securities of the resulting domestic limited liability company or into the right to receive cash or other property are thereupon so converted, and the former holders of interests in the converting business entity are entitled only to the rights provided in the plan of conversion.
The conversion shall not affect the liability or absence of liability of any holder of an interest in the converting business entity for any acts, omissions, or obligations of the converting business entity made or incurred prior to the effectiveness of the conversion.  The cessation of the existence of the converting business entity in its prior form of organization in the conversion shall not constitute a dissolution or termination of the converting business entity.
"Part 2.  Merger.
"§ 57C-9A-05.  Merger.
A domestic limited liability company may merge with one or more other domestic limited liability companies or other business entities if:
(1)	The merger is permitted by the laws of the state or country governing the organization and internal affairs of each other merging business entity; and
(2)	Each merging domestic limited liability company and each other merging business entity comply with the requirements of this Part and, to the extent applicable, the laws referred to in subdivision (1) of this section.
"§ 57C-9A-06.  Plan of merger.
(a)	Each merging domestic limited liability company and each other merging business entity shall approve a written plan of merger containing:
(1)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(2)	The name of the merging business entity that shall survive the merger;
(3)	The terms and conditions of the merger;
(4)	The manner and basis for converting the interests in each merging business entity into interests, obligations, or securities of the surviving business entity or into cash or other property in whole or in part; and
(5)	If the surviving business entity is a domestic limited liability company, any amendments to its articles of organization that are to be made in connection with the merger.
The plan of merger may contain other provisions relating to the merger.
(b)	In the case of a merging domestic limited liability company, the plan of merger must be approved in the manner provided in its articles of organization or a written operating agreement for approval of a merger with the type of business entity contemplated in the plan of merger, or, if there is no provision, by the unanimous consent of its members.  In the case of each other merging business entity, the plan of merger must be approved in accordance with the laws of the state or country governing the organization and internal affairs of the merging business entity.
(c)	After a plan of merger has been approved by a domestic limited liability company but before the articles of merger become effective, the plan of merger (i) may be amended as provided in the plan of merger, or (ii) may be abandoned (subject to any contractual rights) as provided in the plan of merger, articles of organization, or written operating agreement or, if not so provided, as determined by the managers of the domestic limited liability company in accordance with G.S. 57C-3-20(b).
"§ 57C-9A-07.  Articles of merger.
(a)	After a plan of merger has been approved by each merging domestic limited liability company and each other merging business entity as provided in G.S. 57C-9A-06, the surviving business entity shall deliver articles of merger to the Secretary of State for filing.  The articles of merger shall set forth:
(1)	The plan of merger;
(2)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(3)	The name and address of the surviving business entity;
(4)	A statement that the plan of merger has been approved by each merging business entity in the manner required by law; and
(5)	The effective date and time of the merger if it is not to be effective at the time of filing of the articles of merger.
If the plan of merger is amended or abandoned before the articles of merger become effective, the surviving business entity promptly shall deliver to the Secretary of State for filing an amendment to the articles of merger reflecting the amendment or abandonment of the plan of merger.
(b)	A merger takes effect when the articles of merger become effective.
(c)	Certificates of merger shall also be registered as provided in G.S. 47-18.1.
"§ 57C-9A-08.  Effects of merger.
(a)	When the merger takes effect:
(1)	Each other merging business entity merges into the surviving business entity, and the separate existence of each merging business entity, except the surviving business entity ceases;
(2)	The title to all real estate and other property owned by each merging business entity is vested in the surviving business entity without reversion or impairment;
(3)	The surviving business entity has all liabilities of each merging business entity;
(4)	A proceeding pending by or against any merging business entity may be continued as if the merger did not occur, or the surviving business entity may be substituted in the proceeding for a merging business entity whose separate existence ceases in the merger;
(5)	If a domestic limited liability company is the surviving business entity, its articles of organization shall be amended to the extent provided in the plan of merger;
(6)	The interests in each merging business entity that are to be converted into interests, obligations, or securities of the surviving business entity or into the right to receive cash or other property are thereupon so converted, and the former holders of the interests are entitled only to the rights provided to them in the articles of merger or, in the case of former holders of shares in a domestic corporation, any rights they may have under Article 13 of Chapter 55 of the General Statutes; and
(7)	If the surviving business entity is not a domestic corporation, the surviving business entity is deemed to agree that it will promptly pay to the dissenting shareholders of any merging domestic corporation the amount, if any, to which they are entitled under Article 13 of Chapter 55 of the General Statutes and otherwise to comply with the requirements of Article 13 as if it were a surviving domestic corporation in the merger.
The merger shall not affect the liability or absence of liability of any holder of an interest in a merging business entity for any acts, omissions, or obligations of any merging business entity made or incurred prior to the effectiveness of the merger.  The cessation of separate existence of a merging business entity in the merger shall not constitute a dissolution or termination of that merging business entity.
If the surviving business entity is not a domestic limited liability company, a domestic corporation, a domestic nonprofit corporation, or a domestic limited partnership when the merger takes effect, the surviving business entity is deemed:
(1)	To agree that it may be served with process in this State in any proceeding for enforcement of (i) any obligation of any merging domestic limited liability company, domestic corporation, domestic nonprofit corporation, domestic limited partnership, or other partnership as defined in G.S. 59-36 that is formed under the laws of this State, (ii) the rights of dissenting shareholders of any merging domestic corporation under Article 13 of Chapter 55 of the General Statutes, and (iii) any obligation of the surviving business entity arising from the merger; and
(2)	If the surviving business entity does not have a registered agent in this State, to have appointed the Secretary of State as its registered agent for service of process in any such proceeding until such time as the surviving business entity appoints a registered agent in this State.  Service on the Secretary of State of any such process shall be made by delivering to and leaving with the Secretary of State or with any clerk authorized by the Secretary of State to accept service of process, duplicate copies of such process.  Upon receipt of service of process on behalf of a surviving business entity, the Secretary of State shall immediately mail a copy of the process by registered or certified mail, return receipt requested, to the surviving business entity at its address shown in the articles of merger or, if an application for a certificate of withdrawal by reason of merger has been filed, at the address for service of process contained in that application."
PART IV.  PARTNERSHIPS.
Section 4.1.   Article 2 of Chapter 59 of the General Statutes is amended by adding a new Part to read:
"Part 7.  Conversion and Merger.
"§ 59-73.1.  Definitions.
As used in this Part:
(1)	'Domestic partnership' means a partnership as defined in G.S. 59-36 that is formed under the laws of this State, including a registered limited liability partnership as defined in G.S. 59-32, but excluding a domestic limited partnership as defined in G.S. 59-102.
(2)	'Business entity' means a domestic corporation as defined in G.S. 55-1-40 (including a professional corporation as defined in G.S. 55B-2), a foreign corporation as defined in G.S. 55-1-40 (including a foreign professional corporation as defined in G.S. 55B-16), a domestic or foreign nonprofit corporation as defined in G.S. 55A-1-40, a domestic or foreign limited liability company as defined in G.S. 57C-1-03, a domestic or foreign limited partnership as defined in G.S. 59-102, a domestic partnership, or any other partnership as defined in G.S. 59-36 formed under a law other than the laws of this State (including a limited liability partnership).
(3)	'Partnership' means a partnership as defined in G.S. 59-36 whether or not formed under the laws of this State including a registered limited liability partnership and any other limited liability partnership formed under a law other than the laws of this State but excluding a domestic limited partnership as defined in G.S. 59-102 and a foreign limited partnership as defined in G.S. 59-102.
"§ 59-73.2.  Conversion of domestic partnership.
A domestic partnership may convert to a domestic limited liability company pursuant to Part 1 of Article 9A of Chapter 57C of the General Statutes, or to a domestic limited partnership pursuant to Part 10A of Article 5 of Chapter 59 of the General Statutes.
"§ 59-73.3.  Merger.
A domestic partnership may merge with one or more other domestic partnerships or other business entities if:
(1)	The merger is permitted by laws of the state or country governing the organization and internal affairs of each other merging business entity; and
(2)	Each merging domestic partnership and each other merging business entity comply with the requirements of this Part and, to the extent applicable, the laws referred to in subdivision (1) of this section.
"§ 59-73.4.  Plan of merger.
(a)	Each merging domestic partnership and each other merging business entity shall approve a written plan of merger containing:
(1)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(2)	The name of the merging business entity that shall survive the merger;
(3)	The terms and conditions of the merger; and
(4)	The manner and basis for converting the interests in each merging business entity into interests, obligations, or securities of the surviving business entity or into cash or other property in whole or in part.
The plan of merger may contain other provisions relating to the merger.
(b)	In the case of a merging domestic partnership, the plan of merger must be approved in the manner provided in a written partnership agreement that is binding on all the partners for approval of a merger with the type of business entity contemplated in the plan of merger or, if there is no provision, by the unanimous consent of its partners.  In the case of each other merging business entity, the plan of merger must be approved in accordance with the laws of the state or country governing the organization and internal affairs of such merging business entity.
(c)	After a plan of merger has been approved by the domestic partnership but before the articles of merger become effective, the plan of merger (i) may be amended as provided in the plan of merger, or (ii) may be abandoned (subject to any contractual rights) as provided in the plan of merger or a written partnership agreement that is binding on all the partners or, if not so provided, as determined by the unanimous consent of the partners.
"§ 59-73.5.  Articles of merger.
(a)	After a plan of merger has been approved by each merging domestic partnership and each other merging business entity as provided in G.S. 59-73.4, the surviving business entity shall deliver articles of merger to the Secretary of State for filing.  The articles of merger shall set forth:
(1)	The plan of merger;
(2)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(3)	The name and address of the surviving business entity;
(4)	A statement that the plan of merger has been approved by each merging business entity in the manner required by law; and
(5)	The effective date and time of the merger if it is not to be effective at the time of filing of the articles of merger.
If the plan of merger is amended or abandoned before the articles of merger become effective, the surviving business entity promptly shall deliver to the Secretary of State for filing an amendment to the articles of merger reflecting the amendment or abandonment of the plan of merger.
(b)	A merger takes effect when the articles of merger become effective.
(c)	Certificates of merger shall also be registered as provided in G.S. 47-18.1.
"§ 59-73.6.  Effects of merger.
(a)	When a merger takes effect:
(1)	Each other merging business entity merges into the surviving business entity, and the separate existence of each merging business entity except the surviving business entity ceases;
(2)	The title to all real estate and other property owned by each merging business entity is vested in the surviving business entity without reversion or impairment;
(3)	The surviving business entity has all liabilities of each merging business entity;
(4)	A proceeding pending by or against any merging business entity may be continued as if the merger did not occur, or the surviving business entity may be substituted in the proceeding for a merging business entity whose separate existence ceases in the merger;
(5)	The interests in each merging business entity that are to be converted into interests, obligations, or securities of the surviving business entity or into the right to receive cash or other property are thereupon so converted, and the former holders of the interests in each merging business entity are entitled only to the rights provided to them in the articles of merger or, in the case of former holders of shares in a domestic corporation (as defined in G.S. 55-1-40), any rights they may have under Article 13 of Chapter 55 of the General Statutes; and
(6)	If the surviving business entity is not a domestic corporation, the surviving business entity is deemed to agree that it will promptly pay to the dissenting shareholders of any merging domestic corporation the amount, if any, to which they are entitled under Article 13 of Chapter 55 of the General Statutes and otherwise to comply with the requirements of Article 13 as if it were a surviving domestic corporation in the merger.
The merger shall not affect the liability or absence of liability of any holder of an interest in a merging business entity for any acts, omissions, or obligations of any merging business entity made or incurred prior to the effectiveness of the merger.  The cessation of separate existence of a merging business entity shall not constitute a dissolution or termination of the merging business entity.
If the surviving business entity is not a domestic limited liability company, a domestic corporation, a domestic nonprofit corporation, or a domestic limited partnership when the merger takes effect, the surviving business entity is deemed:
(1)	To agree that it may be served with process in this State in any proceeding for enforcement of (i) any obligation of any merging domestic limited liability company, domestic corporation, domestic nonprofit corporation, domestic limited partnership, or other partnership as defined in G.S. 59-36 that is formed under the laws of this State, (ii) the rights of dissenting shareholders of any merging domestic corporation under Article 13 of Chapter 55 of the General Statutes, and (iii) any obligation of the surviving business entity arising from the merger; and
(2)	If the surviving business entity does not have a registered agent in this State, to have appointed the Secretary of State as its registered agent for service of process in any such proceeding until such time as the surviving business entity appoints a registered agent in this State.  Service on the Secretary of State of any such process shall be made by delivering to and leaving with the Secretary of State or with any clerk authorized by the Secretary of State to accept service of process, duplicate copies of such process.  Upon receipt of service of process on behalf of a surviving business entity, the Secretary of State shall immediately mail a copy of the process by registered or certified mail, return receipt requested, to the surviving business entity at its address shown in the articles of merger or, if an application for a certificate of withdrawal by reason of merger has been filed, at the address for service of process contained in that application.
"§ 59-73.7.  Filing of documents.
(a)	To be entitled to filing by the Secretary of State, a document submitted pursuant to this Part must meet all of the following requirements:
(1)	The document must contain the information required by this Part.  It may contain other information as well.
(2)	The document must be typewritten or printed.
(3)	The document must be in the English language.
(4)	A document submitted by a partnership must be executed by a general partner of the partnership.  A document submitted by a business entity other than a partnership must be executed by a person authorized to execute documents (i) pursuant to G.S. 55-1-20(f) if the business entity is a domestic or foreign corporation, (ii) pursuant to G.S. 55A-1-20(f) if the business entity is a domestic or foreign nonprofit corporation, (iii) pursuant to G.S. 57C-1-20(f) if the business entity is a domestic or foreign limited liability company, or (iv) pursuant to G.S. 59-204 if the business entity is a domestic or foreign limited partnership.
(5)	The person executing the document must sign it and state beneath or opposite the person's signature, the person's name and the capacity in which the person signs.  Any signature on the document may be a facsimile.  The document may, but need not, contain an acknowledgment, verification, or proof.
(6)	The document must be delivered to the Office of the Secretary of State for filing and must be accompanied by one exact or conformed copy and by the required filing fee.
(b)	A partnership may correct a document filed by the Secretary of State pursuant to this Part if the document (i) contains a statement that is incorrect and was incorrect when the document was filed or (ii) was defectively executed, attested, sealed, verified, or acknowledged.
A document is corrected by:
(1)	Preparing articles of correction that (i) describe the document (including its filing date) or have attached to them a copy of the document, (ii) specify the incorrect statement and the reason it is incorrect or the manner in which the execution was defective, and (iii) correct the incorrect statement or defective execution; and
(2)	Delivering the articles of correction to the Secretary of State for filing, accompanied by one exact or conformed copy and the required filing fee.
Articles of correction are effective on the effective date of the document that is corrected except as to persons relying on the uncorrected document and adversely affected by the correction.  As to those persons, articles of correction are effective when filed.
(c)	The Secretary of State shall collect the following fees when the documents described in this subsection are submitted by a partnership to the Secretary of State for filing:
Document	 Fee
Articles of Merger	$50.00
Articles of Correction	$10.00
The Secretary of State shall collect a fee of ten dollars ($10.00) each time process is served on the Secretary of State under this Part.  The party to the proceeding causing service of process is entitled to recover this fee as costs if the party prevails in the proceeding.
The Secretary of State shall collect the following fees for copying, comparing, and certifying a copy of a document filed by a partnership pursuant to this Part:
(1)	One dollar ($1.00) a page for copying or comparing a copy to the original; and
(2)	Five dollars ($5.00) for the certificate.
(d)	The Secretary of State shall guarantee the expedited filing of a document upon receipt of the document in proper form and the payment of the required filing fee.  The Secretary of State may collect the following additional fees for the expedited filing of a document received in good form:
(1)	Two hundred dollars ($200.00) for the filing by the end of the same business day of a document received by 12:00 noon Eastern Standard Time; and
(2)	One hundred dollars ($100.00) for the filing of a document within 24 hours after receipt, excluding weekends and holidays.
The Secretary of State shall not collect the fees allowed in this subsection unless the person submitting the document for filing requests an expedited filing and is informed by the Secretary of State of the fees prior to the filing of the document.
(e)	Upon request, the Secretary of State shall provide for the review of a document prior to its submission for filing to determine whether it satisfies the requirements of this Part.  Submission of a document for review shall be accompanied by the proper fee and shall be in accordance with procedures adopted by rule by the Secretary of State.  The advisory review shall be completed within 24 hours after submission, excluding weekends and holidays, unless the person submitting the document is otherwise notified in accordance with procedures adopted by rule by the Secretary of State fixing priority between submissions under this subsection and filings under subsection (d) of this section.  Upon completion of the advisory review, the Secretary of State shall notify the person submitting the document of any deficiencies in the document that would prevent its filing.
(f)	Except as provided in this subsection and in subsection (b) of this section, a document accepted for filing is effective:
(1)	At the time of filing on the date it is filed, as evidenced by the Secretary of State's date and time endorsement on the original document; or
(2)	At the time specified in the document as its effective time on the date it is filed.
A document may specify a delayed effective time and date, and if it does so the document becomes effective at the time and date specified.  If a delayed effective date but no time is specified, the document is effective at 11:59:59 p.m. on that date.  A delayed effective date for a document may not be later than the 90th day after the date it is filed.
The fact that a document has become effective under this subsection does not determine its validity or invalidity or the correctness or incorrectness of the information contained in the document.
(g)	If a document delivered to the Office of the Secretary of State for filing satisfies the requirements of this Part, the Secretary of State shall file it.  Documents filed with the Secretary of State pursuant to this Part may be maintained by the Secretary either in their original form or in photographic, microfilm, optical disk media, or other reproduced form.  The Secretary may make reproductions of documents filed under this Part, or under any predecessor act, by photographic, microfilm, optical disk media, or other means of reproduction, and may destroy the originals of those documents reproduced.
The Secretary of State files a document by stamping or otherwise endorsing 'Filed', together with the Secretary of State's name and official title and the date and time of filing, on both the original and the document copy.  After filing a document, the Secretary of State shall deliver the document copy to the partnership or its representative.
If the Secretary of State refuses to file a document, the Secretary of State shall return it to the partnership or its representative within five days after the document was received, together with a brief, written explanation of the reason for refusal.  The Secretary of State may correct apparent errors and omissions on a document submitted for filing if authorized to make the corrections by the person submitting the document for filing.  Prior to making the correction, the Secretary shall confirm the authorization to make the corrections according to procedures adopted by rule.
The Secretary of State's duty is to review and file documents that satisfy the requirements of this Part.  The Secretary of State's filing or refusing to file a document does not:
(1)	Affect the validity or invalidity of the document in whole or part;
(2)	Relate to the correctness or incorrectness of information contained in the document; or
(3)	Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.
(h)	If the Secretary of State refuses to file a document delivered to the Secretary of State's office for filing, the person tendering the document for filing may, within 30 days after the refusal, appeal the refusal to the Superior Court of Wake County.  The appeal is commenced by filing a petition with the court and with the Secretary of State requesting the court to compel the Secretary of State to file the document.  The petition shall have attached to it the document to be filed and the Secretary of State's explanation for the refusal to file.  The appeal to the Superior Court is not governed by Chapter 150B of the General Statutes, the Administrative Procedure Act, and the court shall determine, based upon what is appropriate under the circumstances, any further notice and opportunity to be heard.
Upon consideration of the petition and any response made by the Secretary of State, the court may, prior to entering final judgment, order the Secretary of State to file the document or take other action the court considers appropriate.
The court's final decision may be appealed as in other civil proceedings.
(i)	A certificate attached to a copy of a document filed by the Secretary of State, bearing the Secretary of State's signature (which may be in facsimile) and the seal of office and certifying that the copy is a true copy of the document, is conclusive evidence that the original document is on file with the Secretary of State.  A photographic, microfilm, optical disk media, or other reproduced copy of a document filed pursuant to this Part or any predecessor act, when certified by the Secretary, shall be considered an original for all purposes and is admissible in evidence in like manner as an original.
(j)	A person commits an offense if the person signs a document the person knows is false in any material respect with intent that the document be delivered to the Secretary of State for filing.  An offense under this subsection is a Class 1 misdemeanor.
(k)	Whenever title to real property in this State held by a partnership is vested by operation of law in another entity upon merger, consolidation, or conversion of the partnership, a certificate reciting the merger, consolidation, or conversion shall be recorded in the office of the register of deeds of the county where the property is located, or if the property is located in more than one county, then in each county where any portion of the property is located.
The Secretary of State shall adopt uniform certificates to be furnished for registration in accordance with this subsection.  In the case of a partnership formed under a law other than the laws of this State, a similar certificate by any competent authority of the jurisdiction of organization may be registered in accordance with this subsection.
The certificate required by this subsection shall be recorded by the register of deeds in the same manner as deeds, and for the same fees, but no formalities as to acknowledgment, probate, or approval by any other officer shall be required.  The former name of the partnership holding title to the real property before the merger, consolidation, or conversion shall appear in the 'Grantor' index and the name of the other entity holding title to the real property by virtue of the merger, consolidation, or conversion shall appear in the 'Grantee' index."
Section 4.2.  G.S. 59-102 is amended by adding a new subdivision to read:
"(1a)	'Business entity' means a domestic corporation as defined in G.S. 55-1-40 (including, without limitation, a professional corporation as defined in G.S. 55B-2), a foreign corporation as defined in G.S. 55-1-40 (including, without limitation, a foreign professional corporation as defined in G.S. 55B-16), a domestic or foreign nonprofit corporation as defined in G.S. 55A-1-40, a domestic limited liability company as defined in G.S. 57C-1-03, a foreign limited liability company as defined in G.S. 57C-1-03, a domestic limited partnership, a foreign limited partnership, or any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State (including a registered limited liability partnership as defined in G.S. 59-32 and any other limited liability partnership formed under a law other than the laws of this State)."
Section 4.3.  G.S. 59-201 is amended by adding a new subsection to read:
"( d)	A limited partnership may also be formed through the conversion of another business entity in accordance with Part 10A of this Article."
Section 4.4.  G.S. 59-204 reads as rewritten:
"§ 59-204. Execution of documents.
(a)	Each certificate required by this Article to be filed in the office of the Secretary of State shall be executed in the following manner:
(1)	An original certificate of limited partnership must be signed by all general partners;
(2)	A certificate of amendment must be signed by at least one general partner and by each other partner designated in the certificate as a new general partner; and
(3)	A certificate of cancellation must be signed by all general partners.
Any other document submitted by a domestic or foreign limited partnership for filing pursuant to this or any other Chapter must be signed by at least one general partner.  Any document submitted by a business entity other than a domestic or foreign limited partnership must be executed by a person authorized to execute documents (i)	pursuant to G.S. 55-1-20(f) if the business entity is a domestic or foreign corporation, (ii) pursuant to G.S. 55A-1-20(f) if the business entity is a domestic or foreign nonprofit corporation, (iii) pursuant to G.S. 57C-1-20(f) if the business entity is a domestic or foreign limited liability company, or (iv) pursuant to G.S. 59-73.7(a)(4) if the business entity is a partnership as defined in G.S. 59-36, whether or not formed under the laws of this State, other than a domestic or foreign limited partnership.
(b)	Any person may sign a certificate by an attorney-in-fact.
(b1)	Any signature on any document authorized to be filed with the Secretary of State under any provision of this Article may be a facsimile.
(c)	The execution of a certificate or amendment by a general partner constitutes an affirmation under the penalties of perjury that the facts stated therein are true."
Section 4.5.  G.S. 59-206(a)(3a) reads as rewritten:
"(3a)	Whenever the name of any domestic or foreign limited partnership holding title to real property in this State is changed upon amendment to the certificate of limited partnership, or whenever title to its real property is vested by operation of law in another entity upon merger, consolidation, or conversion of the domestic or foreign limited partnership, a certificate reciting the name change, merger, consolidation, or conversion shall be recorded in the office of the register of deeds of the county where the property lies, or if the property is located in more than one county, then in each county where any portion of the property lies."
Section 4.6.  G.S. 59-206(a)(5) reads as rewritten:
"(5)	The certificate required by this section shall be recorded by the register of deeds in the same manner as deeds, and for the same fees, but no formalities as to acknowledgement, probate, or approval by any other officer shall be required. The former name of the domestic or foreign limited partnership holding title to the real property before the name change, merger, consolidation, or conversion shall appear in the 'Grantor' index, and the new name of the domestic or foreign limited partnership or the name of the other entity holding title to the real property by virtue of the merger, consolidation, or conversion, as applicable, shall appear in the 'Grantee' index."
Section 4.7.  Article 5 of Chapter 59 of the General Statutes is amended by adding a new section to read:
"§ 59-909.  Withdrawal of foreign limited partnership by reason of a merger, consolidation, or conversion.
(a)	Whenever a foreign limited partnership authorized to transact business in this State ceases its separate existence as a result of a statutory merger or consolidation permitted by the laws of the state or country under which it was organized, or converts into another type of entity as permitted by those laws, the surviving or resulting entity shall apply for a certificate of withdrawal for the foreign limited partnership by delivering to the Secretary of State for filing a copy of the articles of merger, consolidation, or conversion or a certificate reciting the facts of the merger, consolidation, or conversion, duly authenticated by the Secretary of State or other official having custody of limited partnership records in the state or country under the laws of which the foreign limited partnership was organized.  If the surviving or resulting entity is not authorized to transact business in this State, the articles or certificate must be accompanied by an application which must set forth:
(1)	The name of the foreign limited partnership authorized to transact business in this State, the type of entity and name of the surviving or resulting entity, and a statement that the surviving or resulting entity is not authorized to transact business in this State;
(2)	A statement that the surviving or resulting entity consents that service of process based on any cause of action arising in this State, or arising out of business transacted in this State, during the time the foreign limited partnership was authorized to transact business in this State, may thereafter be made by service thereof on the Secretary of State;
(3)	A mailing address to which the Secretary of State may mail a copy of any process served upon the Secretary under subdivision (a)(2) of this section; and
(4)	A commitment to notify the Secretary of State in the future of any change in its mailing address.
(b)	If the Secretary of State finds that the articles or certificate and the application for withdrawal, if required, conform to law, the Secretary of State shall:
(1)	Endorse on the articles or certificate and the application for withdrawal, if required, the word 'filed' and the hour, day, month, and year of filing thereof;
(2)	File the articles or certificate and the application, if required;
(3)	Issue a certificate of withdrawal; and
(4)	Send to the surviving or resulting entity or its representative the certificate of withdrawal, together with the exact or conformed copy of the application, if required, affixed thereto."
Section 4.8.  Article 5 of Chapter 59 of the General Statutes is amended by adding a new Part to read:
"Part 10A.  Conversion and Merger.
"§ 59-1007.  Conversions.
(a)	A domestic limited partnership may convert to a domestic limited liability company pursuant to Part 1 of Article 9A of Chapter 57C of the General Statutes.
(b)	A domestic limited liability company as defined in G.S. 57C-1-03, a foreign limited liability company as defined in G.S. 57C-1-03, a foreign limited partnership, or any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State, including a registered limited liability partnership as defined in G.S. 59-32, and any other limited liability partnership formed under a law other than the laws of this State, but excluding a domestic limited partnership, may convert to a domestic limited partnership if:
(1)	Such converting business entity complies with the requirements of G.S. 59-1008 and G.S. 59-1009; and
(2)	If the converting business entity is a foreign limited liability company, a foreign limited partnership, or other partnership as defined in G.S. 59-36 whose organization and internal affairs are governed by a law other than the laws of this State, the conversion is permitted by laws of the state or country governing the organization and internal affairs of the converting business entity, and the converting business entity complies with the laws.
"§ 59-1008.  Plan of conversion.
(a)	The holders of the interests in the converting business entity shall approve a written plan of conversion containing:
(1)	The name of the resulting domestic limited partnership into which the converting business entity shall convert;
(2)	The terms and conditions of the conversion; and
(3)	The manner and basis for converting the interests in the converting business entity into interests, obligations, or securities of the resulting domestic limited partnership or into cash or other property in whole or in part.
The plan of conversion may contain other provisions relating to the conversion.
(b)	In the case of a domestic limited liability company, the plan of conversion must be approved in the manner provided for approval of such a conversion in its articles of organization or a written operating agreement or, if there is no such provision, by the unanimous consent of its members.  In the case of a partnership as defined in G.S. 59-36 whose organization and internal affairs are governed by the laws of this State, the plan of conversion must be approved in the manner provided for the approval of such a conversion in a written partnership agreement that is binding on all the partners or, if there is no such provision, by the unanimous consent of all the partners.  In the case of a foreign limited liability company, a foreign limited partnership, or other partnership as defined in G.S. 59-36 whose organization and internal affairs are governed by a law other than the laws of this State, the plan of conversion must be approved in accordance with the laws of the state or country governing the organization and internal affairs of the converting business entity.
(c)	After a plan of conversion has been approved as provided in subsection (b) of this section, but before a certificate of limited partnership for the resulting domestic limited liability company becomes effective, the plan of conversion may be amended or abandoned to the extent provided in the plan of conversion.
"§ 59-1009.  Filing of certificate of limited partnership by converting business entity.
(a)	After a plan of conversion has been approved by the converting business entity as provided in G.S. 59-1008, the converting business entity shall deliver a certificate of limited partnership to the Secretary of State for filing.  In addition to the matters required or permitted by G.S. 59-201, the certificate of limited partnership shall state:
(1)	That the domestic limited partnership is being formed pursuant to a conversion of another business entity;
(2)	The name of the converting business entity, its type of business entity, and the state or country whose laws govern its organization and internal affairs; and
(3)	That a plan of conversion has been approved by the converting business entity in the manner required by law.
If the plan of conversion is abandoned before the certificate of limited partnership becomes effective, the converting business entity promptly shall deliver to the Secretary of State for filing an amendment to the certificate of limited partnership reflecting the abandonment of the plan of conversion.
(b)	The conversion takes effect when the certificate of limited partnership becomes effective.
(c)	The converting business entity shall furnish a copy of the plan of conversion, on request and without cost, to any member or partner (whether general or limited) of the converting business entity.
(d)	Certificates of conversion shall also be registered as provided in G.S. 47-18.1.
"§ 59-1010.  Effects of conversion.
(a)	When the conversion takes effect:
(1)	The converting business entity ceases its prior form of organization and continues in existence as the resulting domestic limited partnership;
(2)	The title to all real estate and other property owned by the converting business entity continues vested in the resulting domestic limited partnership without reversion or impairment;
(3)	All liabilities of the converting business entity continue as liabilities of the resulting domestic limited partnership;
(4)	A proceeding pending by or against the converting business entity may be continued as if the conversion did not occur; and
(5)	The interests in the converting business entity that are to be converted into interests, obligations, or securities of the resulting domestic partnership or into the right to receive cash or other property are thereupon so converted, and the former holders of interests in the converting business entity are entitled only to the rights provided in the plan of conversion.
The conversion shall not affect the liability or absence of liability of any holder of an interest in the converting business entity for any acts, omissions, or obligations of the converting business entity made or incurred prior to the effectiveness of the conversion.  The cessation of the existence of the converting business entity in its prior form of organization in the conversion shall not constitute a dissolution or termination of the converting business entity.
"§ 59-1011.  Merger.
A domestic limited partnership may merge with one or more other domestic limited partnerships or other business entities if:
(1)	The merger is permitted by the laws of the state or country governing the organization and internal affairs of each other merging business entity; and
(2)	Each merging domestic limited partnership and each other merging business entity comply with the requirements of G.S. 59-1012 and G.S. 59-1013, and, to the extent applicable, the laws referred to in subdivision (1) of this section.
"§ 59-1012.  Plan of merger.
(a)	Each merging domestic limited partnership and each other merging business entity shall approve a written plan of merger containing:
(1)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(2)	The name of the merging business entity that shall survive the merger;
(3)	The terms and conditions of the merger;
(4)	The manner and basis for converting the interests in each merging business entity into interests, obligations, or securities of the surviving business entity or into cash or other property in whole or in part; and
(5)	If the surviving business entity is a domestic limited partnership, any amendments to its certificate of limited partnership that are to be made in connection with the merger.
The plan of merger may contain other provisions relating to the merger.
(b)	In the case of a merging domestic limited partnership, the plan of merger must be approved in the manner provided in a written partnership agreement that is binding on all the partners for approval of a merger with the type of business entity contemplated in the plan of merger or, if there is no provision, by the unanimous consent of its partners.  In the case of each other merging business entity, the plan of merger must be approved in accordance with the laws of the state or country governing the organization and internal affairs of the merging business entity.
(c)	After a plan of merger has been approved by a domestic limited partnership, but before the articles of merger become effective, the plan of merger (i) may be amended as provided in the plan of merger, or (ii) may be abandoned (subject to any contractual rights) as provided in the plan of merger or a written partnership agreement that is binding on all the partners or, if there is no such provision, as determined by the unanimous consent of the partners.
"§ 59-l013.  Articles of merger.
(a)	After a plan of merger has been approved by each merging domestic limited partnership and each other merging business entity as provided in G.S. 59-1012, the surviving business entity shall deliver articles of merger to the Secretary of State for filing.  The articles of merger shall set forth:
(1)	The plan of merger;
(2)	For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs;
(3)	The name and address of the surviving business entity;
(4)	A statement that the plan of merger has been approved by each merging business entity in the manner required by law; and
(5)	The effective date and time of the merger if it is not to be effective at the time of filing of the articles of merger.
If the plan of merger is amended or abandoned before the articles of merger become effective, the surviving business entity promptly shall deliver to the Secretary of State for filing an amendment to the articles of merger reflecting the amendment or abandonment of the plan of merger.
(b)	A merger takes effect when the articles of merger become effective.
(c)	Certificates of merger shall also be registered as provided in G.S. 47-18.1.
"§ 59-1014.  Effects of merger.
(a)	When the merger takes effect:
(1)	Each other merging business entity merges into the surviving business entity, and the separate existence of each merging business entity except the surviving business entity ceases;
(2)	The title to all real estate and other property owned by each merging business entity is vested in the surviving business entity without reversion or impairment;
(3)	The surviving business entity has all liabilities of each merging business entity;
(4)	A proceeding pending by or against any merging business entity may be continued as if the merger did not occur, or the surviving business entity may be substituted in the proceeding for a merging business entity whose separate existence ceases in the merger;
(5)	If a domestic limited partnership is the surviving business entity, its certificate of limited partnership shall be amended to the extent provided in the plan of merger;
(6)	The interests in each merging business entity that are to be converted into interests, obligations, or securities of the surviving business entity or into the right to receive cash or other property are thereupon so converted, and the former holders of the interests are entitled only to the rights provided to them in the articles of merger or, in the case of former holders of shares in a domestic corporation as defined in G.S. 55-1-40, any rights they have under Article 13 of Chapter 55 of the General Statutes; and
(7)	If the surviving business entity is not a domestic corporation, the surviving business entity is deemed to agree that it will promptly pay to the dissenting shareholders of any merging domestic corporation the amount, if any, to which they are entitled under Article 13 of Chapter 55 of the General Statutes and otherwise to comply with the requirements of Article 13 as if it were a surviving domestic corporation in the merger.
The merger shall not affect the liability or absence of liability of any holder of an interest in a merging business entity for any acts, omissions, or obligations of any merging business equity made or incurred prior to the effectiveness of the merger.  The cessation of separate existence of a merging business entity in the merger shall not constitute a dissolution or termination of such merging business entity.
(b)	If the surviving business entity is not a domestic limited liability company, a domestic corporation, a domestic nonprofit corporation, or a domestic limited partnership, when the merger takes effect the surviving business entity is deemed:
(1)	To agree that it may be served with process in this State in any proceeding for enforcement of (i) any obligation of any merging domestic limited liability company, domestic corporation, domestic nonprofit corporation, domestic limited partnership or other partnership as defined in G.S. 59-36 that is formed under the laws of this State, (ii) the rights of dissenting shareholders of any merging domestic corporation under Article 13 of Chapter 55 of the General Statutes, and (iii) any obligation of the surviving business entity arising from the merger; and
(2)	If the surviving business entity does not have a registered agent in this State, to have appointed the Secretary of State as its registered agent for service of process in any such proceeding until such time as the surviving business entity appoints a registered agent in this State.  Service on the Secretary of State of any such process shall be made by delivering to and leaving with the Secretary of State or with any clerk authorized by the Secretary of State to accept service of process, duplicate copies of such process.  Upon receipt of service of process on behalf of a surviving business entity, the Secretary of State shall immediately mail a copy of the process by registered or certified mail, return receipt requested, to the surviving business entity at its address shown in the articles of merger or, if an application for a certificate of withdrawal by reason of merger has been filed, at the address for service of process contained in that application."
PART V. CONFORMING CHANGES.
Section 5.1.  G.S. 47-18.1 reads as rewritten:
"§ 47-18.1.  Registration of certificate of corporate merger, consolidation, or conversion.
(a)	If title to real property in this State is vested by operation of law in another entity upon the merger, consolidation, or conversion of an entity, such vesting is effective against lien creditors or purchasers for a valuable consideration from the entity formerly owning the property, only from the time of registration of a certificate thereof as provided in this section, in the county where the land lies, or if the land is located in more than one county, then in each county where any portion of the land lies to be effective as to the land in that county.
(b)	The Secretary of State shall adopt uniform certificates of merger, consolidation, or conversion, to be furnished for registration, and shall adopt such fees as are necessary for the expense of such certification.  If the entity involved is not a domestic entity, a similar certificate by any competent authority in the jurisdiction of incorporation or organization may be registered in accordance with this section.
(c)	A certificate of the Secretary of State prepared in accordance with this section shall be registered by the register of deeds in the same manner as deeds, and for the same fees, but no formalities as to acknowledgment, probate, or approval by any other officer shall be required.  The name of the entity formerly owning the property shall appear in the 'Grantor' index, and the name of the entity owning the property by virtue of the merger, consolidation, or conversion shall appear in the 'Grantee' index."
Section 5.2.  G.S. 105-129.4(e) reads as rewritten:
"(e)	Change in Ownership of Business. – The sale, merger, consolidation, conversion, acquisition, or bankruptcy of a business, or any transaction by which an existing business reformulates itself as another business, does not create new eligibility in a succeeding business with respect to credits for which the predecessor was not eligible under this Article. A successor business may, however, take any installment of or carried-over portion of a credit that its predecessor could have taken if it had a tax liability.  The acquisition of a business is a new investment that creates new eligibility in the acquiring taxpayer under this Article if any of the following conditions are met:
(1)	The business closed before it was acquired.
(2)	The business was required to file a notice of plant closing or mass layoff under the federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2102, before it was acquired.
(3)	The business was acquired by its employees through an employee stock option transaction or another similar mechanism."
Section 5.3.  G.S. 105-129.27(d) reads as rewritten:
"(d)	Change in Ownership of Facility. – The sale, merger, consolidation, conversion, acquisition, or bankruptcy of a recycling facility, or any transaction by which the facility is reformulated as another business, does not create new eligibility in a succeeding owner with respect to a credit for which the predecessor was not eligible under this section.  A successor business may, however, take any carried-over portion of a credit that its predecessor could have taken if it had a tax liability."
Section 5.4.  G.S. 105-130.4(j)(3) reads as rewritten:
"(3)	The average value of property shall be determined by averaging the values at the beginning and end of the income year, but in all cases the Secretary of Revenue may require the averaging of monthly or other periodic values during the income year if reasonably required to reflect properly the average value of the corporation's property.  A corporation that ceases its operations in this State before the end of its income year because of its intention to dissolve or to relinquish its certificate of authority, or because of a merger, conversion, or consolidation, or for any other reason whatsoever shall use the real estate and tangible personal property values as of the first day of the income year and the last day of its operations in this State in determining the average value of property, but the Secretary may require averaging of monthly or other periodic values during the income year if reasonably required to reflect properly the average value of the corporation's property."
Section 5.5.  G.S. 105-130.17(e) reads as rewritten:
"(e)	Any corporation that ceases its operations in this State before the end of its income year because of its intention to dissolve or to withdraw from this State, or because of a merger, conversion, or consolidation or for any other reason whatsoever shall file its return for the then current income year within 75 days after the date it terminates its business in this State."
Section 5.6.  G.S. 105-163.010(2) reads as rewritten:
"(2)	Business. – A corporation, partnership, limited liability company, association, or sole proprietorship operated for profit."
Section 5.7.  G.S. 105-163.013(f) reads as rewritten:
"(f)	Transfer of Registration. – A registration as a qualified business venture or qualified grantee business may not be sold or otherwise transferred, except that if a qualified business venture or qualified grantee business enters into a merger, conversion, consolidation, or other similar transaction with another business and the surviving company would otherwise meet the criteria for being a qualified business venture or qualified grantee business, the surviving company retains the registration without further application to the Secretary of State. In such a case, the qualified business venture or qualified grantee business shall provide the Secretary of State with written notice of the merger, conversion, consolidation, or similar transaction and the name, address, and jurisdiction of incorporation or organization of the surviving company."
Section 5.8.  G.S. 105-163.014(d)(1) reads as rewritten:
"(1)	Within one year after the investment was made, the taxpayer transfers any of the securities received in the investment that qualified for the tax credit to another person or entity, other than in a transfer resulting from one of the following:
a.	The death of the taxpayer.
b.	A final distribution in liquidation to the owners of a taxpayer that is a corporation or other entity.
c.	A merger, conversion, consolidation, or similar transaction requiring approval by the owners of the qualified business venture or qualified grantee business under applicable State law, to the extent the taxpayer does not receive cash or tangible property in the merger, conversion, consolidation, or other similar transaction."
Section 5.9.  G.S. 105-187.6(b)(2) reads as rewritten:
"(2)	To a partnership, limited liability company, or corporation as an incident to the formation of the partnership, limited liability company, or corporation, and no gain or loss arises on the transfer of the motor vehicle under section 351 or section 721 of the Internal Revenue Code as defined in G.S. 105-228.90, or to a partnership, limited liability company, or corporation by merger, conversion, or consolidation in accordance with applicable law."
Section 5.10.  G.S. 105-228.29 reads as rewritten:
"§ 105-228.29. Conveyances excluded.
The provisions of this Article shall not apply to transfers of an interest in real estate by operation of law, by lease for a term of years, by or pursuant to the provisions of a will, by intestacy, by gift, by merger, conversion, or consolidation, or by instruments securing indebtedness, or any other transfer where no consideration in property or money is due or paid by the transferee to transferor."
PART VI.  MUTUAL TO STOCK INSURANCE CONVERSION.
Section 6.  Article 10 of Chapter 58 of the General Statutes is amended by adding a new section to read:
"§ 58-10-10.  Mutual conversion to stock insurer.
(a)	A domestic mutual insurer may convert to a domestic stock insurer under a plan that is approved in advance by the Commissioner.
(b)	The Commissioner shall not approve the plan unless:
(1)	It is fair and equitable to the insurer's policyholders.
(2)	It is adopted by the insurer's board of directors in accordance with the insurer's bylaws and approved by a vote of not less than two-thirds of the insurer's members voting on it in person, by proxy, or by mail at a meeting called for the purpose of voting on the plan, pursuant to reasonable notice and procedure as approved by the Commissioner.  If the company is a life insurer, the right to vote may be limited, as its bylaws provide, to members whose policies are other than term or group policies and have been in effect for more than one year.
(3)	Each policyholder's equity in the insurer is determinable under a fair and reasonable formula approved by the Commissioner.  The equity shall be based upon the insurer's entire statutory surplus after deducting certificates of contribution, guaranty capital certificates, and similar evidences of indebtedness included in an insurer's statutory surplus.
(4)	The policyholders entitled to vote on the plan and participate in the purchase of stock and distribution of assets include all policyholders on the date the plan was adopted by the insurer's board of directors.
(5)	The plan provides that each policyholder specified in subdivision (4) of this subsection receives a preemptive right to acquire a proportionate part of all of the proposed capital stock of the insurer or of all of the stock of a corporation affiliated with the insurer within a designated reasonable period as the part is determinable under the plan of conversion; and to apply toward the purchase of the stock the amount of the policyholder's equity in the insurer under subdivision (3) of this subsection.  The plan must provide for an equitable distribution of fractional interests.
(6)	The plan provides for payment to each policyholder of the policyholder's entire equity in the insurer; with that payment to be applied toward the purchase of stock to which the policyholder is entitled preemptively or to be made in cash, or both.  The cash payment may not exceed fifty percent (50%) of each policyholder's equity.  The stock purchased, together with the cash payment, if any, shall constitute full payment and discharge of the policyholder's equity as an owner of the mutual insurer.
(7)	Shares are to be offered to policyholders at a price not greater than that of shares to be subsequently offered to others.
(8)	The Commissioner finds that the insurer's management has not, through reduction of volume of new business written, through policy cancellations, or through any other means, sought to (i) reduce, limit, or affect the number or identity of the insurer's members entitled to participate in the plan or (ii) secure for the individuals constituting management any unfair advantage through the plan.
(9)	The plan, when completed, provides that the insurer's capital and surplus are not less than the minimum required of a domestic stock insurer transacting the same kinds of insurance, are reasonable in relation to the insurer's outstanding liabilities, and are adequate to meet its financial needs.
(c)	With respect to an insurer with a guaranty capital, the conversion plan shall be approved by a vote of not less than two-thirds of the insurer's guaranty capital shareholders and policyholders as provided for in subdivision (b)(2) of this section.  The plan may provide for the issuance of stock in exchange for outstanding guaranty capital shares at their redemption value subject to the conditions in subsection (b) of this section.
(d)	The Commissioner may schedule a public hearing on the proposed conversion plan.
(e)	The Commissioner may retain, at the mutual insurer's expense, any attorneys, actuaries, economists, accountants, or other experts not otherwise a part of the Commissioner's staff as may be reasonably necessary to assist the Commissioner in reviewing the proposed conversion plan.
(f)	The corporate existence of the mutual company continues in the stock company created under this section.  All assets, rights, franchises, and interests of the former mutual insurer, in and to real or personal property, are deemed to be transferred to and vested in the stock insurer, without any other deed or transfer; and the stock insurer simultaneously assumes all of the obligations and liabilities of the former mutual insurer.
(g)	No director, officer, or employee of the insurer shall receive:
(1)	Any fee, commission, compensation, or other valuable consideration for aiding, promoting, or assisting in the conversion of the mutual insurer to a domestic stock insurer, other than compensation paid to any director, officer, or employee of the insurer in the ordinary course of business; or
(2)	Any distribution of the assets, surplus, or capital of the insurer as part of a conversion.
(h)	The Commissioner may adopt rules to carry out the provisions of this section."
PART VII.  HOMEOWNER ASSOCIATION REFUNDS.
Section 7.  G.S. 55A-13-02(b) reads as rewritten:
"(b)	Subject to the provisions of subsection (d) of this section:
(1)	A corporation may make distributions to any entity that is exempt under section 501(c)(3) of the Internal Revenue Code of 1986 or any successor section, or that is organized exclusively for one or more of the purposes specified in section 501(c)(3) of the Internal Revenue Code of 1986 or any successor section and that upon dissolution shall distribute its assets to a charitable or religious corporation, the United States, a state or an entity that is exempt under section 501(c)(3) of the Internal Revenue Code of 1986 or any successor section.
(2)	Any corporation other than a charitable or religious corporation may make distributions to any domestic or foreign corporation.
(3)	Except as otherwise prohibited by statute, a corporation not operated for profit, the membership of which is limited to the owners or occupants of real property in a condominium, cooperative housing corporation, or other real property development, having as its primary purposes the management, operation, preservation, maintenance, and repair of common areas and improvements upon the real property owned by the members and the corporation or organization, may make distribution to its members of excess or surplus membership dues, fees, or assessments remaining after the payment of or provisions for common expenses and any prepayment of reserves; provided that these distributions are in proportion to the dues, fees, or assessments collected from the members."
PART VIII. EFFECTIVE DATE.
Section 8.  This act becomes effective January 1, 2000, and applies to mergers, consolidations, or conversions effective on or after that date.