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House
File
2776
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Introduced
HOUSE
FILE
2776
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
HF
2536)
(SUCCESSOR
TO
HSB
211)
A
BILL
FOR
An
Act
providing
for
the
conversion
of
partnerships
into
other
1
forms
of
domestic
or
foreign
organizations,
and
providing
2
for
fees.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
Section
486A.901,
Code
2025,
is
amended
by
1
striking
the
section
and
inserting
in
lieu
thereof
the
2
following:
3
486A.901
Definitions.
4
In
this
article:
5
1.
“Converted
organization”
means
the
organization
into
6
which
a
converting
domestic
partnership
converts
pursuant
to
7
this
article,
and
continues
in
existence
after
the
conversion
8
takes
effect.
9
2.
“Converting
organization”
means
a
domestic
partnership
10
that
converts
into
another
organization
pursuant
to
this
11
article
and
does
not
continue
in
existence
after
the
conversion
12
takes
effect.
13
3.
“Domestic”
,
with
respect
to
an
organization,
means
formed
14
and
governed
as
to
its
internal
affairs
by
a
domestic
governing
15
statute.
16
4.
“Domestic
governing
statute”
means
a
statute
of
this
17
state
governing
the
formation
and
internal
affairs
of
a
18
domestic
organization,
including
this
chapter
governing
a
19
partnership;
chapter
488
governing
a
limited
partnership,
20
including
a
limited
liability
limited
partnership;
chapter
489
21
governing
a
limited
liability
company;
chapter
490
governing
a
22
business
corporation;
chapter
504
governing
a
not-for-profit
23
corporation;
or
chapter
633A
governing
a
business
trust.
24
5.
“Foreign”
,
with
respect
to
an
organization,
means
formed
25
and
governed
as
to
its
internal
affairs
by
the
laws
of
another
26
jurisdiction.
27
6.
“Foreign
governing
statute”
means
a
statute
of
another
28
jurisdiction
governing
the
formation
and
internal
affairs
of
29
a
foreign
organization.
30
7.
“General
partner”
means
a
partner
in
a
partnership
and
a
31
general
partner
in
a
limited
partnership.
32
8.
“Governing
statute”
means
a
domestic
governing
statute
or
33
foreign
governing
statute,
including
any
predecessor
statute.
34
9.
“Limited
partner”
means
a
limited
partner
in
a
limited
35
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partnership.
1
10.
“Limited
partnership”
means
a
limited
partnership
formed
2
under
chapter
488.
3
11.
“Organization”
means
a
partnership;
limited
partnership,
4
including
a
limited
liability
limited
partnership;
limited
5
liability
company;
business
corporation;
nonprofit
corporation;
6
or
business
trust
formed
if
the
organization
is
formed
under
a
7
domestic
governing
statute
or
foreign
governing
statute;
or
any
8
other
foreign
organization
formed
under
a
comparable
foreign
9
governing
statute.
10
12.
a.
“Organizational
document”
means
a
public
organic
11
document
and
other
document
or
record
that
determines
an
12
organization’s
internal
governance
and
the
relations
among
the
13
persons
that
own
the
organization,
have
an
interest
in
the
14
organization,
or
are
members
of
the
organization,
as
provided
15
in
its
governing
statute,
and
includes
any
amendment
to
or
16
restatement
of
that
document
or
record.
17
b.
“Organizational
document”
includes
but
is
not
limited
to
18
the
following:
19
(1)
For
a
domestic
general
partnership,
its
partnership
20
agreement
as
provided
in
its
domestic
governing
statute;
or
21
for
a
foreign
general
partnership,
its
partnership
agreement
22
or
a
comparable
document
as
provided
in
its
foreign
governing
23
statute.
24
(2)
For
a
domestic
limited
partnership,
its
certificate
25
of
limited
partnership
as
provided
in
its
domestic
governing
26
statute;
or
for
a
foreign
limited
partnership,
its
certificate
27
of
limited
partnership
or
a
comparable
document
as
provided
in
28
its
foreign
governing
statute.
29
(3)
For
a
domestic
limited
liability
company,
its
30
certificate
of
organization
and
operating
agreement
as
provided
31
in
its
domestic
governing
statute;
or
for
a
foreign
limited
32
liability
company,
its
certificate
of
organization
or
articles
33
of
organization,
and
operating
agreement,
or
comparable
records
34
as
provided
in
its
foreign
governing
statute.
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For
a
domestic
business
corporation,
its
articles
1
of
incorporation,
bylaws,
and
other
agreements
among
its
2
shareholders
authorized
by
its
domestic
governing
statute,
as
3
provided
in
its
domestic
governing
statute;
or
for
a
foreign
4
business
corporation,
its
articles
of
incorporation,
bylaws,
5
other
agreements
among
its
shareholders
authorized
by
its
6
foreign
governing
statute,
or
comparable
documents
as
provided
7
in
its
foreign
governing
statute.
8
(5)
For
a
domestic
nonprofit
corporation,
its
articles
of
9
incorporation,
bylaws,
and
other
agreements
among
its
members
10
authorized
by
its
domestic
governing
statute,
as
provided
in
11
its
domestic
governing
statute;
and
for
a
foreign
nonprofit
12
corporation,
its
articles
of
incorporation,
bylaws,
and
13
other
agreements
among
its
members
authorized
by
its
foreign
14
governing
statute,
or
comparable
records
as
provided
in
its
15
foreign
governing
statute.
16
(6)
For
a
domestic
business
trust,
its
certificate
of
trust,
17
agreement
of
trust,
or
declaration
of
trust;
and
for
a
foreign
18
business
trust,
its
certificate
of
trust,
agreement
of
trust,
19
declaration
of
trust,
or
comparable
records
as
provided
in
its
20
foreign
governing
statute.
21
13.
“Partner”
includes
either
a
partner
in
a
general
22
partnership
or
a
general
or
limited
partner
in
a
limited
23
partnership.
24
14.
a.
“Public
organic
document”
means
a
document
or
record
25
the
filing
of
which
by
the
secretary
of
state
is
required
26
to
form
an
organization
and
includes
any
amendment
to
or
27
restatement
of
that
document
or
record.
28
b.
“Public
organic
document”
includes
but
is
not
limited
to
29
any
of
the
following:
30
(1)
For
a
domestic
limited
partnership,
a
certificate
31
of
limited
partnership
as
provided
in
its
domestic
governing
32
statute;
or
for
a
foreign
limited
partnership,
its
certificate
33
of
limited
partnership
or
a
comparable
document
as
provided
in
34
its
foreign
governing
statute.
35
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(2)
For
a
domestic
limited
partnership,
its
certificate
1
of
limited
partnership
as
provided
in
its
domestic
governing
2
statute;
or
for
a
foreign
limited
partnership,
its
certificate
3
of
limited
partnership
or
a
comparable
document
as
provided
in
4
its
foreign
governing
statute.
5
(3)
For
a
domestic
limited
liability
company,
its
6
certificate
of
organization
as
provided
in
its
domestic
7
governing
statute;
or
for
a
foreign
limited
liability
company,
8
its
certificate
of
organization
or
articles
of
organization
9
or
comparable
records
as
provided
in
its
foreign
governing
10
statute.
11
(4)
For
a
domestic
business
corporation,
its
articles
12
of
incorporation
as
provided
in
its
domestic
governing
13
statute;
or
for
a
foreign
business
corporation,
its
articles
14
of
incorporation
or
comparable
documents
as
provided
in
its
15
foreign
governing
statute.
16
(5)
For
a
domestic
nonprofit
corporation,
its
articles
of
17
incorporation
as
provided
in
its
domestic
governing
statute;
18
and
for
a
foreign
nonprofit
corporation,
its
articles
of
19
incorporation
or
comparable
records
as
provided
in
its
foreign
20
governing
statute.
21
(6)
For
a
domestic
business
trust,
its
certificate
of
trust,
22
agreement
of
trust,
or
declaration
of
trust;
and
for
a
foreign
23
business
trust,
its
certificate
of
trust,
agreement
of
trust,
24
declaration
of
trust,
or
comparable
documents
as
provided
in
25
its
foreign
governing
statute.
26
Sec.
2.
Section
486A.902,
Code
2025,
is
amended
by
striking
27
the
section
and
inserting
in
lieu
thereof
the
following:
28
486A.902
Conversion
of
partnership
to
another
type
of
29
organization.
30
1.
A
domestic
partnership
may
be
converted
to
another
type
31
of
domestic
or
foreign
organization
pursuant
to
this
section
32
if
all
of
the
following
apply:
33
a.
The
other
organization’s
governing
statute
authorizes
the
34
conversion.
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b.
The
conversion
is
not
prohibited
by
the
law
of
the
1
jurisdiction
that
enacted
the
other
organization’s
governing
2
statute.
3
c.
The
other
organization
complies
with
its
governing
4
statute
in
effecting
the
conversion.
5
2.
A
plan
of
conversion
setting
forth
the
terms
and
6
conditions
of
the
conversion
of
a
domestic
partnership
to
7
another
organization
must
be
approved
by
all
of
the
partners
8
or
by
a
number
or
percentage
specified
for
conversion
in
the
9
partnership
agreement.
10
3.
A
plan
of
conversion
must
be
in
a
document
and
must
11
include
all
of
the
following:
12
a.
The
name
of
the
converting
organization.
13
b.
The
name,
type
of
organization,
and
jurisdiction
of
the
14
governing
statute
of
the
converted
organization.
15
c.
The
terms
and
conditions
of
the
conversion,
including
16
the
manner
and
basis
for
converting
interests
in
the
converting
17
organization
into
any
combination
of
money,
interests
in
the
18
converted
organization,
and
other
consideration.
19
d.
The
organizational
documents
of
the
converted
20
organization.
21
e.
In
addition
to
the
requirements
of
paragraphs
“a”
through
22
“d”
,
a
plan
of
conversion
may
contain
any
other
provision
not
23
prohibited
by
law.
24
4.
After
the
plan
of
conversion
is
approved
by
the
partners,
25
the
partnership
shall
deliver
to
the
secretary
of
state
for
26
filing
articles
of
conversion
which
must
include
all
of
the
27
following:
28
a.
A
statement
that
the
partnership
has
been
converted
into
29
another
type
of
organization.
30
b.
The
name,
type
of
organization
of
the
converting
31
organization,
and
the
jurisdiction
of
the
governing
statute
of
32
the
converted
organization.
33
c.
The
name,
type
of
organization
of
the
converted
34
organization,
and
the
jurisdiction
of
the
governing
statute
of
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the
converted
organization.
1
d.
The
date
the
conversion
is
effective
under
the
governing
2
statute
of
the
converted
organization.
3
e.
A
statement
that
the
conversion
was
approved
as
required
4
by
this
chapter.
5
f.
A
statement
that
the
conversion
was
approved
as
required
6
by
the
governing
statute
of
the
converted
organization.
7
5.
The
conversion
takes
effect
when
the
articles
of
8
conversion
and
any
public
organic
document
required
by
the
9
converted
organization’s
governing
statute
are
filed
or
at
any
10
later
date
specified
in
the
filed
articles
of
conversion.
11
6.
After
a
conversion
pursuant
to
this
chapter,
a
general
12
partner
of
a
converting
general
partnership
remains
liable
as
a
13
general
partner
for
an
obligation
incurred
by
the
partnership
14
before
the
conversion
takes
effect.
A
person
not
a
partner
is
15
deemed
to
have
notice
of
a
partnership’s
participation
in
a
16
conversion
ninety
days
after
the
articles
of
conversion
under
17
this
section
become
effective.
18
Sec.
3.
Section
486A.904,
Code
2025,
is
amended
by
striking
19
the
section
and
inserting
in
lieu
thereof
the
following:
20
486A.904
Effect
of
conversion.
21
1.
An
organization
that
has
been
converted
pursuant
to
this
22
article
is
for
all
purposes
the
same
organization
that
existed
23
before
the
conversion.
24
2.
When
a
conversion
takes
effect,
all
of
the
following
25
procedures
apply:
26
a.
All
property
owned
by
the
converting
organization
remains
27
vested
in
the
converted
organization.
28
b.
All
debts,
liabilities,
and
other
obligations
of
29
the
converting
organization
continue
as
obligations
of
the
30
converted
organization.
31
c.
An
action
or
proceeding
pending
by
or
against
the
32
converting
organization
may
be
continued
as
if
the
conversion
33
had
not
occurred.
34
d.
Except
as
prohibited
by
other
law,
all
of
the
rights,
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privileges,
immunities,
powers,
and
purposes
of
the
converting
1
organization
remain
vested
in
the
converted
organization.
2
e.
Except
as
otherwise
provided
in
the
plan
of
conversion,
3
the
terms
and
conditions
of
the
plan
of
conversion
take
effect.
4
f.
Except
as
otherwise
agreed,
the
conversion
does
not
5
dissolve
a
partnership
for
the
purposes
of
article
8.
6
3.
a.
A
converted
foreign
organization
consents
to
the
7
jurisdiction
of
the
courts
of
this
state
to
enforce
any
8
obligation
owed
by
the
converting
organization,
if
before
the
9
conversion
the
converting
organization
was
subject
to
suit
in
10
this
state
on
the
obligation.
11
b.
A
converted
foreign
organization
that
is
not
authorized
12
to
transact
business
in
this
state
shall
appoint
the
secretary
13
of
state
as
its
agent
for
service
of
process
for
purposes
of
14
enforcing
an
obligation
under
this
subsection.
15
Sec.
4.
Section
486A.1202,
subsection
1,
Code
2025,
is
16
amended
by
adding
the
following
new
paragraph:
17
NEW
PARAGRAPH
.
0h.
Articles
of
conversion
.
.
.
.
.
.
.
.
.
.
.
.
$
50
18
Sec.
5.
Section
488.1101,
subsection
9,
paragraph
c,
Code
19
2025,
is
amended
to
read
as
follows:
20
c.
For
a
domestic
or
foreign
limited
liability
company,
its
21
articles
certificate
of
organization
and
operating
agreement,
22
or
comparable
records
as
provided
in
its
governing
statute.
23
EXPLANATION
24
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
25
the
explanation’s
substance
by
the
members
of
the
general
assembly.
26
BACKGROUND
——
GENERAL.
This
bill
amends
the
“Uniform
27
Partnership
Act”
(Code
chapter
486A)
prepared
and
recommended
28
by
the
national
conference
of
commissioners
of
uniform
state
29
laws,
and
providing
for
partnership
law
in
Iowa.
A
partnership
30
refers
to
a
general
partnership
which
involves
an
association
31
of
individuals
who
assume
co-ownership
of
business
assets.
32
Generally,
the
general
partners
are
responsible
for
collective
33
decisionmaking,
taking
an
equal
share
of
business
profits,
34
and
assuming
full
personal
liability
in
case
of
a
lawsuit
or
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creditor
action.
A
partnership
is
governed
by
a
partnership
1
agreement
which
is
a
type
of
private
contract
entered
into
2
by
the
partners
that
describes
the
internal
affairs
of
3
the
organization,
and
is
not
required
to
be
filed
with
the
4
secretary
of
state.
5
TYPES
OF
ORGANIZATIONS.
A
partnership
is
often
compared
6
with
other
types
of
organizations
that
limit
the
income
earned
7
and
liability
incurred
by
investors
based
on
their
respective
8
contributions.
The
organization
may
delegate
control
over
the
9
organization’s
affairs
to
one
or
more
persons
who
serve
in
a
10
fiduciary
capacity
as
one
or
more
general
partners
of
a
limited
11
partnership
(Code
chapter
488),
managers
of
a
limited
liability
12
company
(Code
chapter
489),
or
board
members
of
a
business
13
corporation
(Code
chapter
490)
or
nonprofit
corporation
14
(Code
chapter
504).
These
types
of
filing
organizations
15
must
be
formed
under
what
the
bill
refers
to
as
a
domestic
16
governing
statute
or
foreign
governing
statute
that
controls
17
the
organization’s
internal
governance
with
certain
tax
18
consequences.
A
foreign
organization
may
also
include
other
19
types
of
organizations
under
a
comparable
foreign
governing
20
statute.
A
public
organic
document
required
to
be
filed
to
21
form
a
domestic
organization
includes
a
certificate
of
limited
22
partnership
for
a
domestic
limited
partnership,
a
certificate
23
of
organization
for
a
domestic
limited
liability
company,
24
articles
of
incorporation
for
a
domestic
business
corporation
25
or
not-for-profit
corporation.
An
organizational
document
26
includes
a
public
organic
document
and
other
documents
not
27
required
to
be
filed,
including
a
partnership
agreement
for
a
28
domestic
partnership,
an
operating
agreement
for
a
domestic
29
limited
liability
company,
bylaws
and
shareholder
agreements
30
for
a
domestic
business
corporation,
and
bylaws
and
other
31
member
agreements
for
a
nonprofit
corporation.
32
BACKGROUND
——
CONVERSION.
The
process
of
conversion
allows
33
a
domestic
organization
to
become
another
type
of
domestic
or
34
foreign
organization.
Under
Code
chapter
486A,
the
conversion
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process
is
limited.
A
domestic
partnership
formed
under
1
Code
chapter
486A
may
only
convert
to
a
limited
partnership
2
governed
under
Code
chapter
488
and
only
pursuant
to
certain
3
requirements.
The
terms
of
the
conversion
must
be
approved
4
by
the
partners.
After
the
conversion,
the
converted
limited
5
partnership
must
file
a
certificate
of
limited
partnership
6
with
the
secretary.
A
general
partner
which
becomes
a
limited
7
partner
of
a
converted
limited
partnership
must
remain
liable
8
as
a
general
partner
for
any
liability
for
an
obligation
9
incurred
by
the
partnership.
10
BILL’S
PROVISIONS
——
PROCESS
OF
CONVERSION.
The
bill
11
provides
for
the
conversion
of
a
domestic
partnership
to
a
12
domestic
limited
partnership
or
any
other
type
of
domestic
13
or
foreign
organization,
so
long
as
the
other
organization’s
14
governing
statute
authorizes
the
conversion,
the
conversion
15
is
not
prohibited
by
the
other
organization’s
governing
16
statute,
and
the
other
organization
complies
with
its
governing
17
statute.
The
terms
of
the
conversion
must
be
set
out
in
18
a
plan
of
conversion
for
approval
by
all
of
the
general
19
partnership’s
partners
or
a
percentage
specified
in
its
20
partnership
agreement.
The
plan
of
conversion
must
include
21
organizational
documents
of
the
converted
organization.
After
22
the
conversion
is
approved,
the
secretary
of
state
must
23
file
articles
of
conversion
with
the
secretary
of
state
that
24
includes
information
regarding
the
converting
partnership
and
25
converted
organization.
The
conversion
takes
effect
when
26
articles
of
conversion
and
any
public
organic
record
for
the
27
converted
organization
are
filed,
or
a
later
date
as
specified
28
in
the
filed
articles.
The
bill
retains
a
provision
that
holds
29
a
general
partner
liable
for
any
obligation
incurred
by
the
30
partnership
before
the
conversion
takes
effect.
31
BILL’S
PROVISIONS
——
EFFECT
OF
CONVERSION.
When
a
32
conversion
takes
effect,
property
owned
by
the
converting
33
organization
becomes
property
of
the
converted
organization.
34
Obligations,
including
debts,
incurred
by
the
converting
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organization
become
obligations
of
the
converted
organization.
1
Any
pending
legal
action
brought
by
or
against
the
converting
2
organization
continues
as
if
the
conversion
had
not
occurred.
3
The
converted
foreign
organization
consents
to
the
jurisdiction
4
of
the
courts
of
this
state
to
enforce
any
obligation
owed
by
5
the
converting
organization.
A
converted
foreign
organization
6
that
is
not
authorized
to
transact
business
in
this
state
must
7
appoint
the
secretary
of
state
as
its
agent
for
service
of
8
process.
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