Partnership Mergers

Corporations Code Title 2, Chapter 4.5, Article 11 deals with partnership conversions and mergers under the Uniform Limited Partnership Act of 2008.

Section 15911.01 defines the following terms: “converted entity,” “converted limited partnership,” “converting limited partnership,” “converting entity,” “constituent corporation,” “constituent limited partnership,” “constituent other business entity,” “disappearing limited partnership,” “disappearing other business entity,” “foreign other business entity,” “other business entity,” “surviving limited partnership,” and “surviving other business entity.”

Section 15911.02 specifies that a limited partnership may be converted into another business entity or a foreign other business entity or a foreign limited partnership pursuant to this article if both of the specified actions apply. The conversion of a limited partnership to an other business entity or a foreign other business entity or a foreign limited partnership may be effected only if both of the specified conditions are satisfied.

Section 15911.03 provides that a limited partnership that desires to convert to an other business entity or a foreign other business entity or a foreign limited partnership must approve a plan of conversion. The plan of conversion has to state five specified items of information.

Section 15911.04 provides that a conversion into an other business entity or a foreign other business entity or a foreign limited partnership must become effective upon the earliest date that all of three actions must occur.

Section 15911.05 specifies that the conversion of a limited partnership into a foreign limited partnership or foreign other business entity is required to comply with specified laws. If the limited partnership is converting into a foreign limited partnership or foreign other business entity, those conversion proceedings are to be in accordance with the laws of the state or place of organization of the foreign limited partnership or foreign other business entity and the conversion shall become effective in accordance with that law.

Section 15911.06 provides that, upon conversion of a limited partnership, one of the four specified conditions applies. Any certificate or statement of conversion must be executed and acknowledged by all general partners and must set forth four specified items of information.

Section 15911.07 states that, whenever a limited partnership or other business entity having any real property in this state converts into a limited partnership or an other business entity pursuant to the laws of this state or of the state or place in which the limited partnership or other business entity was organized, and the laws of the state or place of organization, including this state, of the converting limited partnership or other converting entity provide substantially that the conversion vests in the converted limited partnership or other converted entity.

Section 15911.08 provides that an other business entity or a foreign other business entity or a foreign limited partnership may be converted to a domestic limited partnership pursuant to this article only if the converting entity is authorized by the laws under which it is organized to effect the conversion.

An other business entity or a foreign other business entity or a foreign limited partnership that desires to convert into a domestic limited partnership shall approve a plan of conversion or another instrument as is required to be approved to effect the conversion pursuant to the laws under which that entity is organized.

Section 15911.09 states that an entity that converts into another entity pursuant to this article is, for all purposes, the same entity that existed before the conversion and the conversion is deemed a transfer of property. Upon a conversion taking effect, all four specified conditions apply. A partner of a converting limited partnership is liable for two specified obligations.

A partner of a converted limited partnership remains liable for any and all obligations of the converting entity for which the partner was personally liable before the conversion, but only to the extent that the partner was liable for the obligations of the converting entity prior to the conversion.

Section 15911.10 provides that mergers of limited partnerships are governed by specified sections.

Section 15911.11 says that three specified entities may be merged pursuant to this article.

Section 15911.12 provides that each limited partnership and other business entity that desires to merge must approve an agreement of merger. The agreement of merger must be approved by all general partners of each constituent limited partnership and the principal terms of the merger are to be approved by a majority in interest of each class of limited partners of each constituent limited partnership, unless a greater approval is required by the partnership agreement of the constituent limited partnership.

Section 15911.14 provides that, if the surviving entity is a limited partnership or an other business entity, other than a corporation in a merger in which a domestic corporation is a constituent party, the constituent limited partnerships and constituent other business entities must file a certificate of merger in the office of, and on a form prescribed by, the Secretary of State. The certificate of merger must set forth six specified items of information.

Section 15911.15 provides, unless a future effective date or time is provided in a certificate of merger or the agreement of merger, if an agreement of merger is required to be filed, in which event the merger is effective at that future effective date or time, a merger is effective upon the filing of the certificate of merger or the agreement of merger, as is applicable, in the office of the Secretary of State.

Section 15911.16 states that, upon a merger of limited partnerships or limited partnerships and other business entities pursuant to this chapter, the separate existence of the disappearing limited partnerships and disappearing other business entities ceases and the surviving limited partnership or surviving other business entity succeed, without other transfer, act or deed, to all the rights and property, whether real, personal, or mixed, of each of the disappearing limited partnerships and disappearing other business entities, and is subject to all the debts and liabilities of each in the same manner as if the surviving limited partnership or surviving other business entity had itself incurred them.

Section 15911.17 states that the merger of any number of domestic limited partnerships with any number of foreign limited partnerships or foreign other business entities must be required to comply with the law.

Section 15911.19 states that recording of the certificate of merger creates, in favor of bona fide purchasers or encumbrancers for value, a conclusive presumption that the merger was validly completed.