REPORT TITLE:
Business Entities


DESCRIPTION:
Allows corporations, partnerships, limited liability partnerships
and limited liability companies to convert to any other form of
business entity provided for under Hawaii law. (HB1079 HD3)

 
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                                                        1079
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 3
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE CONVERSION OF BUSINESS ENTITIES. 



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 415, Hawaii Revised Statutes, is amended
 
 2 by adding four new sections to be appropriately designated and to
 
 3 read as follows:
 
 4      "415-A  Conversion into and from corporations.  (a)  A
 
 5 domestic corporation may adopt a plan of conversion and convert
 
 6 to a foreign corporation or any other entity if:
 
 7      (1)  The board of directors and shareholders of the domestic
 
 8           corporation approve a plan of conversion in the manner
 
 9           prescribed by section 415-73 and the conversion is
 
10           treated as a merger to which the converting entity is a
 
11           party and not the surviving entity;
 
12      (2)  The conversion is permitted by, and complies with the
 
13           laws of the state or country in which the converted
 
14           entity is to be incorporated, formed, or organized; and
 
15           the incorporation, formation, or organization of the
 
16           converted entity complies with such laws;
 
17      (3)  At the time the conversion becomes effective, each
 
18           shareholder of the domestic corporation, unless
 
19           otherwise agreed to by that shareholder, owns an equity
 
20           interest or other ownership interest in, and is a
 

 
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 1           shareholder, partner, member, owner, or other security
 
 2           holder of, the converted entity;
 
 3      (4)  The shareholders of the domestic corporation, as a
 
 4           result of the conversion, shall not become personally
 
 5           liable, without the shareholders' consent, for the
 
 6           liabilities or obligations of the converted entity; and
 
 7      (5)  The converted entity is incorporated, formed, or
 
 8           organized as part of or pursuant to the plan of
 
 9           conversion.
 
10      (b)  Any foreign corporation or other entity may adopt a
 
11 plan of conversion and convert to a domestic corporation if the
 
12 conversion is permitted by and complies with the laws of the
 
13 state or country in which the foreign corporation or other entity
 
14 is incorporated, formed, or organized.
 
15      (c)  A plan of conversion shall set forth:
 
16      (1)  The name of the converting entity and the converted
 
17           entity;
 
18      (2)  A statement that the converting entity is continuing
 
19           its existence in the organizational form of the
 
20           converted entity;
 
21      (3)  A statement describing the organizational form of the
 
22           converted entity and the state or country under the
 
23           laws of which the converted entity is to be
 
24           incorporated, formed, or organized;
 

 
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 1      (4)  The manner and basis of converting the shares or other
 
 2           forms of ownership of the converting entity into shares
 
 3           or other forms of ownership of the converted entity, or
 
 4           any combination thereof;
 
 5      (5)  If the converted entity is a domestic corporation, the
 
 6           articles of incorporation of the domestic corporation
 
 7           shall be attached; and
 
 8      (6)  If the converted entity is not a domestic corporation,
 
 9           proof that the converted entity is registered in this
 
10           State shall be attached.
 
11      (d)  A plan of conversion may set forth any other provisions
 
12 relating to the conversion that are not prohibited by law,
 
13 including without limitation the initial bylaws and officers of
 
14 the converted entity.
 
15      (e)  After a conversion of a domestic or foreign corporation
 
16 is approved, and at any time before the conversion becomes
 
17 effective, the plan of conversion may be abandoned by the
 
18 converting entity without shareholder action and in accordance
 
19 with the procedures set forth in the plan of conversion or, if
 
20 these procedures are not provided in the plan, in the manner
 
21 determined by the board of directors.  If articles of conversion
 
22 have been filed with the director but the conversion has not
 
23 become effective, the conversion may be abandoned if a statement,
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1 executed on behalf of the converting entity by an officer or
 
 2 other duly authorized representative and stating that the plan of
 
 3 conversion has been abandoned in accordance with applicable law,
 
 4 is filed with the director prior to the effective date of the
 
 5 conversion.  If the director finds that the statement satisfies
 
 6 the requirements provided by law, the director, after all fees
 
 7 have been paid shall:
 
 8      (1)  Stamp the word "Filed" on the statement and the date of
 
 9           the filing;
 
10      (2)  File the document in the director's office; and
 
11      (3)  Issue a certificate of abandonment to the converting
 
12           entity or its authorized representatives.
 
13      (f)  Once the statement provided in subsection (e) is filed
 
14 with the director, the conversion shall be deemed abandoned and
 
15 shall not be effective.
 
16      415-B  Articles of conversion.  (a)  If a plan of
 
17 conversion has been approved in accordance with section 415-A and
 
18 has not been abandoned, articles of conversion shall be executed
 
19 by an officer or other duly authorized representative of the
 
20 converting entity and shall set forth:
 
21      (1)  A statement certifying the following:
 
22           (A)  The name, state or country of incorporation,
 
23                formation, or organization of the converting
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1                entity, and organizational form of the converting
 
 2                entity;
 
 3           (B)  That a plan of conversion has been approved in
 
 4                accordance with section 415-A;
 
 5           (C)  That an executed plan of conversion is on file at
 
 6                the principal place of business of the converting
 
 7                entity and stating the address thereof; and
 
 8           (D)  That a copy of the plan of conversion shall be
 
 9                furnished by the converting entity prior to the
 
10                conversion or by the converted entity after the
 
11                conversion on written request and without cost, to
 
12                any shareholder, partner, member, or owner of the
 
13                converting entity or the converted entity;
 
14      (2)  If the converting entity is a domestic corporation, the
 
15           number of shares outstanding and, if the shares of any
 
16           class or series are entitled to vote as a class, the
 
17           designation and number of outstanding shares of each
 
18           such class or series;
 
19      (3)  If the converting entity is a domestic corporation, the
 
20           number of shares outstanding that voted for and against
 
21           the plan, and, if the shares of any class or series are
 
22           entitled to vote as a class, the number of shares of
 
23           each such class or series that voted for and against
 
24           the plan; and
 

 
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 1      (4)  If the converting entity is a foreign corporation or
 
 2           other entity, a statement that the approval of the plan
 
 3           of conversion was duly authorized and complied with the
 
 4           laws under which it was incorporated, formed, or
 
 5           organized.
 
 6      (b)  The articles of conversion shall be delivered to the
 
 7 director.  If the converted entity is a domestic corporation, the
 
 8 articles of incorporation shall also be delivered to the director
 
 9 with the articles of conversion.
 
10      (c)  If the director finds that the articles of conversion
 
11 satisfy the requirements provided by law, and that all required
 
12 documents are filed, the director, after all fees have been paid,
 
13 shall:
 
14      (1)  Stamp the word "Filed" on the articles of conversion
 
15           and the date of the filing;
 
16      (2)  File the document in the director's office; and
 
17      (3)  Issue a certificate of conversion to the converted
 
18           entity or its authorized representatives.
 
19      415-C  Effective date of the conversion.  Upon the issuance
 
20 of the certificate of conversion by the director, the conversion
 
21 shall be effective.
 
22      415-D  Effect of conversion.  When a conversion becomes
 
23 effective:
 

 
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 1      (1)  The converting entity shall continue to exist without
 
 2           interruption, but in the organizational form of the
 
 3           converted entity;
 
 4      (2)  All rights, title, and interest in all real estate and
 
 5           other property owned by the converting entity shall
 
 6           automatically be owned by the converted entity without
 
 7           reversion or impairment, subject to any existing liens
 
 8           or other encumbrances thereon;
 
 9      (3)  All liabilities and obligations of the converting
 
10           entity shall automatically be liabilities and
 
11           obligations of the converted entity without impairment
 
12           or diminution due to the conversion;
 
13      (4)  The rights of creditors of the converting entity shall
 
14           continue against the converted entity and shall not be
 
15           impaired or extinguished by the conversion;
 
16      (5)  Any action or proceeding pending by or against the
 
17           converting entity may be continued by or against the
 
18           converted entity without any need for substitution of
 
19           parties;
 
20      (6)  The shares and other forms of ownership in the
 
21           converting entity that are to be converted into shares,
 
22           or other forms of ownership, in the converted entity as
 
23           provided in the plan of conversion shall be converted,
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1           and if the converting entity is a domestic corporation,
 
 2           the shareholders of the domestic corporation shall be
 
 3           entitled only to the rights provided in the plan of
 
 4           conversion or to the rights to dissent under section
 
 5           415-80;
 
 6      (7)  A shareholder, partner, member, or other owner of the
 
 7           converted entity shall be liable for the debts and
 
 8           obligations of the converting entity that existed
 
 9           before the conversion takes effect only to the extent
 
10           that such shareholder, partner, member, or other owner:
 
11           (A)  Agreed in writing to be liable for such debts or
 
12                obligations;
 
13           (B)  Was liable under applicable law prior to the
 
14                effective date of the conversion, for such debts
 
15                or obligations; or
 
16           (C)  Becomes liable under applicable law for existing
 
17                debts and obligations of the converted entity by
 
18                becoming a shareholder, partner, member, or other
 
19                owner of the converted entity;
 
20      (8)  If the converted entity is a foreign corporation or
 
21           other entity, the converted entity shall:
 
22           (A)  Appoint a resident of this State, as its agent for
 
23                service of process in a proceeding to enforce any
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1                obligation or the rights of dissenting
 
 2                shareholders of the converting domestic
 
 3                corporation; and
 
 4           (B)  Promptly pay the dissenting shareholders of the
 
 5                converting domestic corporation the amount, if
 
 6                any, to which they are entitled under section
 
 7                415-81;
 
 8           and
 
 9      (9)  If the converting entity is a domestic corporation, the
 
10           provisions of sections 415-80 and 415-81 shall apply as
 
11           if the converted entity were the survivor of a merger
 
12           with the converting entity."
 
13      SECTION 2.  Chapter 415A, Hawaii Revised Statutes, is
 
14 amended by adding four new sections to be appropriately
 
15 designated and to read as follows:
 
16      "415A-A  Conversion into and from professional
 
17 corporations.  (a)  A professional corporation may adopt a plan
 
18 of conversion and convert to any other entity if:
 
19      (1)  The board of directors and shareholders of the
 
20           professional corporation approve a plan of conversion
 
21           in the manner prescribed by section 415-73 and the
 
22           conversion is treated as a merger to which the
 
23           converting entity is a party and not the surviving
 
24           entity;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (2)  The conversion is permitted by and complies with the
 
 2           laws of the state or country in which the converted
 
 3           entity is to be incorporated, formed, or organized; and
 
 4           the incorporation, formation, or organization of the
 
 5           converted entity complies with such laws;
 
 6      (3)  At the time the conversion becomes effective, each
 
 7           shareholder of the converting entity, unless otherwise
 
 8           agreed to by that shareholder, owns an equity interest
 
 9           or other ownership interest in, and is a shareholder,
 
10           partner, member, owner, or other security holder of,
 
11           the converted entity;
 
12      (4)  The shareholders of the professional corporation, as a
 
13           result of the conversion, shall not become personally
 
14           liable without the shareholders' consent, for the
 
15           liabilities or obligations of the converted entity; and
 
16      (5)  The converted entity is incorporated, formed, or
 
17           organized as part of or pursuant to the plan of
 
18           conversion.
 
19      (b)  Any other entity may adopt a plan of conversion and
 
20 convert to a professional corporation if the conversion is
 
21 permitted by and complies with the laws under which the other
 
22 entity is incorporated, formed, or organized.
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (c)  A plan of conversion shall set forth:
 
 2      (1)  The name of the converting entity and the converted
 
 3           entity;
 
 4      (2)  A statement that the converting entity is continuing
 
 5           its existence in the organizational form of the
 
 6           converted entity;
 
 7      (3)  A statement describing the organizational form of the
 
 8           converted entity and the state or country under the
 
 9           laws of which the converted entity is to be
 
10           incorporated, formed, or organized;
 
11      (4)  The manner and basis of converting the shares or other
 
12           forms of ownership of the converting entity into shares
 
13           or other forms of ownership of the converted entity, or
 
14           any combination thereof;
 
15      (5)  If the converted entity is a professional corporation,
 
16           the articles of incorporation of the professional
 
17           corporation shall be attached; and
 
18      (6)  If the converted entity is not a professional
 
19           corporation, proof that the converted entity is
 
20           registered in this State shall be attached.
 
21      (d)  A plan of conversion may set forth any other provisions
 
22 relating to the conversion that are not prohibited by law,
 
23 including without limitation the initial bylaws and officers of
 
24 the converted entity.
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (e)  After a conversion of a professional corporation is
 
 2 approved, and at any time before the conversion becomes
 
 3 effective, the plan of conversion may be abandoned by the
 
 4 professional corporation without shareholder action and in
 
 5 accordance with the procedures set forth in the plan of
 
 6 conversion or, if these procedures are not provided in the plan,
 
 7 in the manner determined by the board of directors.  If articles
 
 8 of conversion have been filed with the director but the
 
 9 conversion has not become effective, the conversion may be
 
10 abandoned if a statement, executed on behalf of the converting
 
11 entity by an officer or other duly authorized representative and
 
12 stating that the plan of conversion has been abandoned in
 
13 accordance with applicable law, is filed with the director prior
 
14 to the effective date of the conversion.  If the director finds
 
15 that the statement satisfies the requirements provided by law,
 
16 the director, after all fees have been paid shall:
 
17      (1)  Stamp the word "Filed" on the statement and the date of
 
18           the filing;
 
19      (2)  File the document in the director's office; and
 
20      (3)  Issue a certificate of abandonment to the converting
 
21           entity or its authorized representatives.
 
22      (f)  Once the statement provided in subsection (e) is filed
 
23 with the director, the conversion shall be deemed abandoned and
 
24 shall not be effective.
 

 
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 1      415A-B  Articles of conversion.  (a)  If a plan of
 
 2 conversion has been approved in accordance with section 415A-A
 
 3 and has not been abandoned, articles of conversion shall be
 
 4 executed by an officer or other duly authorized representative of
 
 5 the converting entity and shall set forth:
 
 6      (1)  A statement certifying the following:
 
 7           (A)  The name, state or country of incorporation,
 
 8                formation, or organization of the converting
 
 9                entity, and organizational form of the converting
 
10                entity;
 
11           (B)  That a plan of conversion has been approved in
 
12                accordance with section 415A-A;
 
13           (C)  That an executed plan of conversion is on file at
 
14                the principal place of business of the converting
 
15                entity and stating the address thereof; and
 
16           (D)  That a copy of the plan of conversion shall be
 
17                furnished by the converting entity prior to the
 
18                conversion or by the converted entity after the
 
19                conversion on written request and without cost, to
 
20                any shareholder of the converting entity or the
 
21                converted entity;
 
22      (2)  If the converting entity is a professional corporation,
 
23           the number of shares outstanding and, if the shares of
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1           any class or series are entitled to vote as a class,
 
 2           the designation and number of outstanding shares of
 
 3           each such class or series;
 
 4      (3)  If the converting entity is a professional corporation,
 
 5           the number of shares outstanding that voted for and
 
 6           against the plan and, if the shares of any class or
 
 7           series are entitled to vote as a class, the number of
 
 8           shares of each such class or series that voted for and
 
 9           against the plan; and
 
10      (4)  If the converting entity is another entity, a statement
 
11           that the approval of the plan of conversion was duly
 
12           authorized and complied with the laws under which it
 
13           was incorporated, formed, or organized.
 
14      (b)  The articles of conversion shall be delivered to the
 
15 director.  If the converted entity is a professional corporation,
 
16 the articles of incorporation shall also be delivered to the
 
17 director with the articles of conversion.
 
18      (c)  If the director finds that the articles of conversion
 
19 satisfy the requirements provided by law, and that all required
 
20 documents are filed, the director, after all fees have been paid
 
21 shall:
 
22      (1)  Stamp the word "Filed" on the articles of conversion
 
23           and the date of the filing;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (2)  File the document in the director's office; and
 
 2      (3)  Issue a certificate of conversion to the converted
 
 3           entity or its authorized representatives.
 
 4      415A-C  Effective date of the conversion.  Upon the
 
 5 issuance of the certificate of conversion by the director, the
 
 6 conversion shall be effective.
 
 7      415A-D  Effect of conversion.  When a conversion becomes
 
 8 effective:
 
 9      (1)  The converting entity shall continue to exist without
 
10           interruption but in the organizational form of the
 
11           converted entity;
 
12      (2)  All rights, title, and interest in all real estate and
 
13           other property owned by the converting entity shall
 
14           automatically be owned by the converted entity without
 
15           reversion or impairment, subject to any existing liens
 
16           or other encumbrances thereon;
 
17      (3)  All liabilities and obligations of the converting
 
18           entity shall automatically be liabilities and
 
19           obligations of the converted entity without impairment
 
20           or diminution due to the conversion;
 
21      (4)  The rights of creditors of the converting entity shall
 
22           continue against the converted entity and shall not be
 
23           impaired or extinguished by the conversion;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (5)  Any action or proceeding pending by or against the
 
 2           converting entity may be continued by or against the
 
 3           converted entity without any need for substitution of
 
 4           parties;
 
 5      (6)  The shares and other forms of ownership in the
 
 6           converting entity that are to be converted into shares
 
 7           or other forms of ownership in the converted entity as
 
 8           provided in the plan of conversion shall be converted,
 
 9           and if the converting entity is a professional
 
10           corporation, the former shareholders of the
 
11           professional corporation shall be entitled only to the
 
12           rights provided in the plan of conversion or to the
 
13           rights to dissent under section 415-80;
 
14      (7)  A shareholder, partner, member, or other owner of the
 
15           converted entity shall be liable for the debts and
 
16           obligations of the converting entity that existed
 
17           before the conversion takes effect only to the extent
 
18           that such shareholder, partner, member, or other owner:
 
19           (A)  Agreed in writing to be liable for such debts or
 
20                obligations;
 
21           (B)  Was liable under applicable law prior to the
 
22                effective date of the conversion for such debts or
 
23                obligations; or
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1           (C)  Becomes liable under applicable law for existing
 
 2                debts and obligations of the converted entity by
 
 3                becoming a shareholder, partner, member, or other
 
 4                owner of the converted entity;
 
 5      (8)  If the converted entity is a foreign corporation or
 
 6           other entity, the converted entity shall:
 
 7           (A)  Appoint a resident of this State as its agent for
 
 8                service of process in a proceeding to enforce any
 
 9                obligation or the rights of dissenting
 
10                shareholders of the converting domestic
 
11                corporation; and
 
12           (B)  Promptly pay the dissenting shareholders of the
 
13                converting domestic corporation the amount, if
 
14                any, to which they are entitled under section
 
15                415-81;
 
16           and
 
17      (9)  If the converting entity is a professional corporation,
 
18           the provisions of section 415-80 and 415-81 shall apply
 
19           as if the converted entity were the survivor of a
 
20           merger with the converting entity."
 
21      SECTION 3.  Chapter 415B, Hawaii Revised Statutes, is
 
22 amended by adding four new sections to part IV to be
 
23 appropriately designated and to read as follows:
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      415B-A  Conversions into and from corporations.  (a)  A
 
 2 domestic corporation may adopt a plan of conversion and convert
 
 3 to a foreign corporation or any other entity if:
 
 4      (1)  The board of directors and members of the domestic
 
 5           corporation approve a plan of conversion in the manner
 
 6           prescribed by section 415B-83 and if the conversion is
 
 7           treated as a merger to which the converting entity is a
 
 8           party and not the surviving entity;
 
 9      (2)  The conversion is permitted by and complies with the
 
10           laws of the state or country in which the converted
 
11           entity is to be incorporated, formed, or organized; and
 
12           the incorporation, formation, or organization of the
 
13           converted entity complies with such laws;
 
14      (3)  At the time the conversion becomes effective, each
 
15           member of the converting entity, unless otherwise
 
16           agreed to by the member, or directors, owns an equity
 
17           interest or other ownership interest in, and is a
 
18           shareholder, partner, member, owner, or other security
 
19           holder of, the converted entity;
 
20      (4)  The members of the domestic corporation, as a result of
 
21           the conversion, shall not become personally liable
 
22           without the members' consent, for the liabilities or
 
23           obligations of the converted entity; and
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (5)  The converted entity is incorporated, formed, or
 
 2           organized as part of or pursuant to the plan of
 
 3           conversion.
 
 4      (b)  Any foreign corporation or other entity may adopt a
 
 5 plan of conversion and convert to a domestic corporation if the
 
 6 conversion is permitted by and complies with the laws of the
 
 7 state or country in which the foreign corporation or other entity
 
 8 is incorporated, formed, or organized.
 
 9      (c)  A plan of conversion shall set forth:
 
10      (1)  The name of the converting entity and the converted
 
11           entity;
 
12      (2)  A statement that the converting entity is continuing
 
13           its existence in the organizational form of the
 
14           converted entity;
 
15      (3)  A statement describing the organizational form of the
 
16           converted entity and the state or country under the
 
17           laws of which the converted entity is to be
 
18           incorporated, formed, or organized;
 
19      (4)  The manner and basis of converting the shares or other
 
20           forms of ownership, of the converting entity into
 
21           shares or other forms of ownership, of the converted
 
22           entity, or any combination thereof;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (5)  If the converted entity is a domestic corporation, the
 
 2           articles of incorporation of the domestic corporation
 
 3           shall be attached; and
 
 4      (6)  If the converted entity is not a domestic corporation,
 
 5           proof that the converted entity is registered in this
 
 6           State shall be attached.
 
 7      (d)  A plan of conversion may set forth any other provisions
 
 8 relating to the conversion that are not prohibited by law,
 
 9 including without limitation the initial bylaws and officers of
 
10 the converted entity.
 
11      (e)  After a conversion of a domestic corporation is
 
12 approved, and at any time before the conversion becomes
 
13 effective, the plan of conversion may be abandoned by the
 
14 domestic corporation in accordance with the procedures set forth
 
15 in the plan of conversion or, if these procedures are not
 
16 provided in the plan, in the manner determined by the board of
 
17 directors.  If articles of conversion have been filed with the
 
18 director but the conversion has not become effective, the
 
19 conversion may be abandoned if a statement, executed on behalf of
 
20 the converting entity by an officer or other duly authorized
 
21 representative and stating that the plan of conversion has been
 
22 abandoned in accordance with applicable law, is filed with the
 
23 director prior to the effective date of the conversion.  If the
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1 director finds that the statement satisfies the requirements
 
 2 provided by law, the director, after all fees have been paid
 
 3 shall:
 
 4      (1)  Stamp the word "Filed" on the statement and the date of
 
 5           the filing;
 
 6      (2)  File the document in the director's office; and
 
 7      (3)  Issue a certificate of abandonment to the converting
 
 8           entity or its authorized representatives.
 
 9      (f)  Once the statement provided in subsection (e) is filed
 
10 with the director, the conversion shall be deemed abandoned and
 
11 shall not be effective.
 
12      415B-B  Articles of conversion.  (a)  If a plan of
 
13 conversion has been approved in accordance with section 415B-83
 
14 and has not been abandoned, articles of conversion shall be
 
15 executed by an officer or other duly authorized representative of
 
16 the converting entity and shall set forth:
 
17      (1)  A statement certifying the following:
 
18           (A)  The name, state or country of incorporation,
 
19                formation, or organization of the converting
 
20                entity, and organizational form of the converting
 
21                entity;
 
22           (B)  That a plan of conversion has been approved;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1           (C)  That an executed plan of conversion is on file at
 
 2                the principal place of business of the converting
 
 3                entity and stating the address thereof; and
 
 4           (D)  That a copy of the plan of conversion shall be
 
 5                furnished by the converting entity prior to the
 
 6                conversion or by the converted entity after the
 
 7                conversion on written request and without cost, to
 
 8                any member or director, as the case may be, of the
 
 9                converting entity or the converted entity;
 
10           and
 
11      (2)  If the converting entity is a domestic or foreign
 
12           corporation or other entity, a statement that the
 
13           approval of the plan of conversion was duly authorized
 
14           and complied with the laws under which it was
 
15           incorporated, formed, or organized.
 
16      (b)  The articles of conversion shall be delivered to the
 
17 director.  If the converted entity is a domestic corporation the
 
18 articles of incorporation shall also be delivered to the director
 
19 with the articles of conversion.
 
20      (c)  If the director finds that the articles of conversion
 
21 satisfy the requirements provided by law, and that all required
 
22 documents are filed, the director, after all fees have been paid
 
23 shall:
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (1)  Stamp the word "Filed" on the articles of conversion
 
 2           and the date of the filing;
 
 3      (2)  File the document in the director's office; and
 
 4      (3)  Issue a certificate of conversion to the converted
 
 5           entity or its authorized representatives.
 
 6      415B-C  Effective date of the conversion.  Upon the
 
 7 issuance of the certificate of conversion by the director, the
 
 8 conversion shall be effective.
 
 9      415B-D  Effect of conversion.  When a conversion becomes
 
10 effective:
 
11      (1)  The converting entity shall continue to exist without
 
12           interruption, but in the organizational form of the
 
13           converted entity;
 
14      (2)  All rights, title, and interest in all real estate and
 
15           other property owned by the converting entity shall
 
16           automatically be owned by the converted entity without
 
17           reversion or impairment, subject to any existing liens
 
18           or other encumbrances thereon;
 
19      (3)  All liabilities and obligations of the converting
 
20           entity shall automatically be liabilities and
 
21           obligations of the converted entity without impairment
 
22           or diminution due to the conversion;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (4)  The rights of creditors of the converting entity shall
 
 2           continue against the converted entity and shall not be
 
 3           impaired or extinguished by the conversion;
 
 4      (5)  Any action or proceeding pending by or against the
 
 5           converting entity may be continued by or against the
 
 6           converted entity without any need for substitution of
 
 7           parties;
 
 8      (6)  The shares and other forms of ownership in the
 
 9           converting entity that are to be converted into shares,
 
10           or other forms of ownership in the converted entity, as
 
11           provided in the plan of conversion, shall be converted;
 
12           and
 
13      (7)  A shareholder, partner, member, or other owner of the
 
14           converted entity shall be liable for the debts and
 
15           obligations of the converting entity that existed
 
16           before the conversion takes effect only to the extent
 
17           that such shareholder, partner, member, or other owner:
 
18           (A)  Agreed in writing to be liable for such debts or
 
19                obligations;
 
20           (B)  Was liable under applicable law prior to the
 
21                effective date of the conversion for such debts or
 
22                obligations; or
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1           (C)  Becomes liable under applicable law for existing
 
 2                debts and obligations of the converted entity by
 
 3                becoming a shareholder, partner, member, or other
 
 4                owner of the converted entity."
 
 5      SECTION 4.  Chapter 425, Hawaii Revised Statutes, is amended
 
 6 by adding four new sections to part VI to be appropriately
 
 7 designated and to read as follows:
 
 8      "425-A  Conversion into and from partnerships or limited
 
 9 liability partnerships.  (a)  A domestic partnership or limited
 
10 liability partnership may adopt a plan of conversion and convert
 
11 to a foreign partnership, limited liability partnership, or any
 
12 other entity if:
 
13      (1)  The domestic partnership or limited liability
 
14           partnership acts on and its partners approve a plan of
 
15           conversion in the manner prescribed by sections 425-191
 
16           and 428-904 to 428-906 and the conversion is treated as
 
17           a merger to which the converting entity is a party and
 
18           not the surviving entity;
 
19      (2)  The conversion is permitted by and complies with the
 
20           laws of the state or country in which the converted
 
21           entity is to be incorporated, formed, or organized; and
 
22           the incorporation, formation, or organization of the
 
23           converted entity complies with such laws;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (3)  At the time the conversion becomes effective, each
 
 2           partner of the converting entity, unless otherwise
 
 3           agreed to by that partner, owns an equity interest or
 
 4           other ownership interest in, and is a shareholder,
 
 5           partner, member, owner, or other security holder of,
 
 6           the converted entity; and
 
 7      (4)  The converted entity shall be incorporated, formed, or
 
 8           organized as part of or pursuant to the plan of
 
 9           conversion.
 
10      (b)  Any foreign partnership, limited liability partnership,
 
11 or other entity may adopt a plan of conversion and convert to a
 
12 domestic partnership or limited liability partnership if the
 
13 conversion is permitted by and complies with the laws of the
 
14 state or country in which the foreign partnership, limited
 
15 liability partnership, or other entity is incorporated, formed or
 
16 organized.
 
17      (c)  A plan of conversion shall set forth:
 
18      (1)  The name of the converting entity and the converted
 
19           entity;
 
20      (2)  A statement that the converting entity is continuing
 
21           its existence in the organizational form of the
 
22           converted entity;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (3)  A statement describing the organizational form of the
 
 2           converted entity and the state or country under the
 
 3           laws of which the converted entity is to be
 
 4           incorporated, formed, or organized;
 
 5      (4)  The manner and basis of converting the partnership
 
 6           interests, or other forms of ownership of the
 
 7           converting entity into partnership interests, or other
 
 8           forms of ownership of the converted entity, or any
 
 9           combination thereof;
 
10      (5)  If the converted entity is a domestic partnership or
 
11           limited liability partnership, the registration
 
12           statement of the domestic partnership or limited
 
13           liability partnership shall be attached; and
 
14      (6)  If the converted entity is not a domestic partnership,
 
15           or limited liability partnership, proof that the
 
16           converted entity is registered in this State shall be
 
17           attached.
 
18      (d)  A plan of conversion may set forth any other provisions
 
19 relating to the conversion that are not prohibited by law,
 
20 including without limitation the initial partnership or limited
 
21 liability partnership agreement of the converted entity if the
 
22 converted entity is a partnership or limited liability
 
23 partnership.
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      425-B  Articles of conversion.  (a)  If a plan of
 
 2 conversion has been approved in accordance with the section 425-A
 
 3 and has not been abandoned, articles of conversion shall be
 
 4 executed by a partner, officer, or other duly authorized
 
 5 representative of the converting entity and shall set forth:
 
 6      (1)  A statement certifying the following:
 
 7           (A)  The name, state or country of incorporation,
 
 8                formation, or organization of the converting
 
 9                entity and the organizational form of the
 
10                converting entity;
 
11           (B)  That a plan of conversion has been approved in
 
12                accordance with section 425-A;
 
13           (C)  That an executed plan of conversion is on file at
 
14                the principal place of business of the converting
 
15                entity and stating the address thereof; and
 
16           (D)  That a copy of the plan of conversion shall be
 
17                furnished by the converting entity prior to the
 
18                conversion or the converted entity after the
 
19                conversion on written request and without cost, to
 
20                any partner, shareholder, owner or member of the
 
21                converting entity or the converted entity;
 
22           and
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (2)  A statement that the approval of the plan of conversion
 
 2           was duly authorized by all action required by the laws
 
 3           under which the converting entity was incorporated,
 
 4           formed, or organized.
 
 5      (b)  The articles of conversion shall be delivered to the
 
 6 director.
 
 7      (c)  If the converted entity is a domestic partnership, the
 
 8 registration statement of the domestic partnership or limited
 
 9 liability partnership shall also be delivered to the director
 
10 with the articles of conversion.
 
11      425-C  Effective date of the conversion.  Upon the issuance
 
12 of a certificate of conversion by the director, the conversion
 
13 shall be effective.
 
14      425-D  Effect of conversion.  When a conversion becomes
 
15 effective:
 
16      (1)  The converting entity shall continue to exist without
 
17           interruption, but in the organizational form of the
 
18           converted entity;
 
19      (2)  All rights, title, and interest in all real estate and
 
20           other property owned by the converting entity shall
 
21           automatically be owned by the converted entity without
 
22           reversion or impairment, subject to any existing liens
 
23           or other encumbrances thereon;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (3)  All liabilities and obligations of the converting
 
 2           entity shall automatically be liabilities and
 
 3           obligations of the converted entity without impairment
 
 4           or diminution due to the conversion;
 
 5      (4)  The rights of creditors of the converting party shall
 
 6           continue against the converted entity and shall not be
 
 7           impaired or extinguished by the conversion;
 
 8      (5)  Any action or proceeding pending by or against the
 
 9           converting entity may be continued by or against the
 
10           converted entity, without any need for substitution of
 
11           parties;
 
12      (6)  The partnership interests, and other forms of ownership
 
13           in the converting entity that are to be converted into
 
14           partnership interests, or other forms of ownership, in
 
15           the converted entity as provided in the plan of
 
16           conversion shall be converted;
 
17      (7)  A shareholder, partner, member, or other owner of the
 
18           converted entity, shall be liable for the debts and
 
19           obligations of the converting entity that existed
 
20           before the conversion takes effect only to the extent
 
21           that such shareholder, partner, member, or other owner:
 
22           (A)  Agreed in writing to be liable for such debts or
 
23                obligations;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1           (B)  Was liable under applicable law prior to the
 
 2                effective date of the conversion for such debts or
 
 3                obligations; or
 
 4           (C)  Becomes liable under applicable law for existing
 
 5                debts and obligations of the converted entity by
 
 6                becoming a shareholder, partner, member, or other
 
 7                owner of the converted entity;
 
 8      (8)  If the converted entity is a foreign partnership,
 
 9           limited liability partnership or other entity, the
 
10           converted entity shall appoint a resident of the State
 
11           as its agent, for service of process in a proceeding to
 
12           enforce any obligation or rights of dissenting partners
 
13           of the converting domestic partnership or limited
 
14           liability partnership; and
 
15      (9)  If the converting partnership is a domestic
 
16           partnership, or limited liability partnership, the
 
17           provisions of section 425-191 shall apply as if the
 
18           converted entity were the survivor of a merger with the
 
19           converting entity."
 
20      SECTION 5.  Chapter 425D, Hawaii Revised Statutes, is
 
21 amended by adding four new sections to article 11 to be
 
22 appropriately designated and to read as follows:
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      "425D-A  Conversion into or from limited partnerships.  (a)
 
 2 A domestic limited partnership may adopt a plan of conversion and
 
 3 convert to a foreign limited partnership or any other entity if:
 
 4      (1)  The domestic limited partnership acts on and its
 
 5           partners approve a plan of conversion in the manner
 
 6           prescribed by sections 425-191, 428-904 to 428-906, as
 
 7           if the conversion is treated as a merger to which the
 
 8           converting entity is a party and not the surviving
 
 9           entity;
 
10      (2)  The conversion is permitted by and complies with the
 
11           laws of the state or country in which the converted
 
12           entity is to be incorporated, formed, or organized; and
 
13           the incorporation, formation, or organization of the
 
14           converted entity complies with such laws;
 
15      (3)  At the time the conversion becomes effective, each
 
16           partner of the converting entity, unless otherwise
 
17           agreed to by that partner, owns an equity interest or
 
18           other ownership  interest in, and is a shareholder,
 
19           partner, member, owner, or other security holder of,
 
20           the converted entity; and
 
21      (4)  The converted entity shall be incorporated, formed, or
 
22           organized as part of or pursuant to the plan of
 
23           conversion.
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (b)  Any foreign limited partnership or other entity may
 
 2 adopt a plan of conversion and convert to a domestic limited
 
 3 partnership if the conversion is permitted by and complies with
 
 4 the laws of the state or country in which the foreign limited
 
 5 partnership or other entity is incorporated, formed or organized.
 
 6      (c)  A plan of conversion shall set forth:
 
 7      (1)  The name of the converting entity and the converted
 
 8           entity;
 
 9      (2)  A statement that the converting entity is continuing
 
10           its existence in the organizational form of the
 
11           converted entity;
 
12      (3)  A statement describing the organizational form of the
 
13           converted entity and the state or country under the
 
14           laws of which the converted entity is to be
 
15           incorporated, formed, or organized;
 
16      (4)  The manner and basis of converting the partnership
 
17           interests, or other forms of ownership of the
 
18           converting entity into partnership interests, or other
 
19           forms of ownership of the converted entity, or any
 
20           combination thereof;
 
21      (5)  If the converted entity is a domestic limited
 
22           partnership, the certificate of limited partnership
 
23           shall be attached; and
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (6)  If the converted entity is not a domestic limited
 
 2           partnership, proof that the converted entity is
 
 3           registered in this State shall be attached.
 
 4      (d)  A plan of conversion may set forth any other provisions
 
 5 relating to the conversion that are not prohibited by law,
 
 6 including without limitation the initial partnership agreement of
 
 7 the converted entity.
 
 8      425D-B  Articles of conversion.  (a)  If a plan of
 
 9 conversion has been approved in accordance with the section
 
10 425D-A and has not been abandoned, articles of conversion shall
 
11 be executed by a partner, officer, or other duly authorized
 
12 representative of the converting entity and shall set forth:
 
13      (1)  A statement certifying the following:
 
14           (A)  The name, state or country of incorporation,
 
15                formation, or organization of the converting
 
16                entity, and the organizational form of the
 
17                converting entity;
 
18           (B)  That a plan of conversion has been approved in
 
19                accordance with section 425D-A;
 
20           (C)  That an executed plan of conversion is on file at
 
21                the principal place of business of the converting
 
22                entity and stating the address thereof;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1           (D)  That a copy of the plan of conversion shall be
 
 2                furnished by the converting entity prior to the
 
 3                conversion or the converted entity after the
 
 4                conversion, on written request and without cost,
 
 5                to any limited partner of the converting entity or
 
 6                the converted entity;
 
 7           and
 
 8      (2)  A statement that the approval of the plan of conversion
 
 9           was duly authorized by all action required by the laws
 
10           under which the converting entity was incorporated,
 
11           formed, or organized;
 
12      (b)  The articles of conversion shall be delivered to the
 
13 director.
 
14      (c)  If the converted entity is a domestic limited
 
15 partnership, the certificate of limited partnership shall also be
 
16 delivered to the director with the articles of conversion.
 
17      425D-C  Effective date of the conversion.  Upon the
 
18 issuance of a certificate of conversion by the director, the
 
19 conversion shall be effective.
 
20      425D-D  Effect of conversion.  When a conversion becomes
 
21 effective:
 
22      (1)  The converting entity shall continue to exist without
 
23           interruption, but in the organizational form of the
 
24           converted entity;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (2)  All rights, title, and interest in all real estate and
 
 2           other property owned by the converting entity shall
 
 3           automatically be owned by the converted entity without
 
 4           reversion or impairment, subject to any existing liens
 
 5           or other encumbrances thereon;
 
 6      (3)  All liabilities and obligations of the converting
 
 7           entity shall automatically be liabilities and
 
 8           obligations of the converted entity without impairment
 
 9           or diminution due to the conversion;
 
10      (4)  The rights of creditors of the converting party shall
 
11           continue against the converted party and shall not be
 
12           impaired or extinguished by the conversion;
 
13      (5)  Any action or proceeding pending by or against the
 
14           converting entity may be continued by or against the
 
15           converted entity without any need for substitution of
 
16           parties;
 
17      (6)  The partnership interests and other forms of ownership
 
18           in the converting entity that are to be converted into
 
19           partnership interests, or other forms of ownership, in
 
20           the converted entity as provided in the plan of
 
21           conversion shall be converted;
 
22      (7)  A shareholder, partner, member, or other owner of the
 
23           converted entity shall be liable for the debts and
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1           obligations of the converting entity that existed
 
 2           before the conversion takes effect only to the extent
 
 3           that such shareholder, partner, member, or other owner:
 
 4           (A)  Agreed in writing to be liable for such debts or
 
 5                obligations;
 
 6           (B)  Was liable under applicable law prior to the
 
 7                effective date of the conversion for such debts or
 
 8                obligations; or
 
 9           (C)  Becomes liable under applicable law for existing
 
10                debts and obligations of the converted entity by
 
11                becoming a shareholder, partner, member, or other
 
12                owner of the converted entity;
 
13      (8)  If the converted entity is a foreign limited
 
14           partnership or other entity, the converted entity shall
 
15           appoint a resident of this State as its agent for
 
16           service of process in a proceeding to enforce any
 
17           obligation or rights of dissenting limited partners of
 
18           the converting domestic limited partnership; and
 
19      (9)  If the converting partnership is a domestic limited
 
20           partnership, the provisions of section 425D-1109 shall
 
21           apply as if the converted entity were the survivor of a
 
22           merger with the converting entity."
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      SECTION 6.  Chapter 428, Hawaii Revised Statutes, is amended
 
 2 by adding two new sections to part IX to be appropriately
 
 3 designated and to read as follows:
 
 4      "428-A  Conversion into and from limited liability
 
 5 companies.  (a)  A domestic limited liability company may adopt a
 
 6 plan of conversion and convert to a foreign limited liability
 
 7 company or any other entity if:
 
 8      (1)  The domestic limited liability company acts on and its
 
 9           members approve a plan of conversion in the manner
 
10           prescribed by sections 428-904 to 428-906 and the
 
11           conversion is treated as a merger to which the
 
12           converting entity is a party and not the surviving
 
13           entity;
 
14      (2)  The conversion is permitted by, and complies with, the
 
15           laws of the state or country in which the converted
 
16           entity is to be incorporated, formed, or organized; and
 
17           the incorporation, formation, or organization of the
 
18           converted entity complies with such laws;
 
19      (3)  At the time the conversion becomes effective, each
 
20           member of the converting entity, unless otherwise
 
21           agreed to by that member, owns an equity interest or
 
22           other ownership interest in, and is a shareholder,
 
23           partner, member, owner, or other security holder of,
 
24           the converted entity;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (4)  The members of the domestic limited liability company
 
 2           shall not, as a result of the conversion, become
 
 3           personally liable without the members' consent, for the
 
 4           liabilities or obligations of the converted entity; and
 
 5      (5)  The converted entity is incorporated, formed, or
 
 6           organized as part of or pursuant to the plan of
 
 7           conversion.
 
 8      (b)  Any foreign limited liability company or other entity
 
 9 may adopt a plan of conversion and convert to a domestic limited
 
10 liability company if the conversion is permitted by and complies
 
11 with the laws of the state or country in which the foreign
 
12 corporation is incorporated, formed or organized.
 
13      (c)  A plan of conversion shall set forth:
 
14      (1)  The name of the converting entity and the converted
 
15           entity;
 
16      (2)  A statement that the converting entity is continuing
 
17           its existence in the organizational form of the
 
18           converted entity;
 
19      (3)  A statement describing the organizational form of the
 
20           converted entity and the state or country under the
 
21           laws of which the converted entity is to be
 
22           incorporated, formed, or organized;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (4)  The manner and basis of converting the shares or other
 
 2           forms of ownership of the converting entity into shares
 
 3           or other forms of ownership of the converted entity, or
 
 4           any combination thereof;
 
 5      (5)  If the converted entity is a domestic limited liability
 
 6           company the articles of organization of the domestic
 
 7           limited liability company shall be attached; and
 
 8      (6)  If the converted entity is not a domestic limited
 
 9           liability company, proof that the converted entity is
 
10           registered in this State shall be attached.
 
11      (d)  A plan of conversion may set forth any other provisions
 
12 relating to the conversion that are not prohibited by law,
 
13 including without limitation the initial bylaws and officers of
 
14 the converted entity.
 
15      (e)  After a conversion of a limited liability company is
 
16 approved, and at any time before the conversion becomes
 
17 effective, the plan of conversion may be abandoned by the
 
18 converting entity without member action and in accordance with
 
19 the procedures set forth in the plan of conversion or, if these
 
20 procedures are not provided in the plan of conversion, in the
 
21 manner determined by the members.  If articles of conversion have
 
22 been filed with the director but the conversion has not become
 
23 effective, the conversion may be abandoned if a statement,
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1 executed on behalf of the converting entity by an officer or
 
 2 other duly authorized representative and stating that the plan of
 
 3 conversion has been abandoned in accordance with applicable law,
 
 4 is filed with the director prior to the effective date of the
 
 5 conversion.  If the director finds that the statement satisfies
 
 6 the requirements provided by law, the director, after all fees
 
 7 have been paid shall:
 
 8      (1)  Stamp the word "Filed" on the statement and the date of
 
 9           the filing;
 
10      (2)  File the document in the director's office; and
 
11      (3)  Issue a certificate of abandonment to the converting
 
12           entity or its authorized representatives.
 
13      (f)  Once the statement provided in subsection (e) is filed
 
14 with the director, the conversion shall be deemed abandoned and
 
15 shall not be effective.
 
16      428-B  Articles of conversion.  (a)  If a plan of
 
17 conversion has been approved in accordance with section 428-A and
 
18 has not been abandoned, articles of conversion shall be executed
 
19 by an officer or other duly authorized representative of the
 
20 converting entity by and shall set forth:
 
21      (1)  A statement certifying the following:
 
22           (A)  The name, state or country of incorporation,
 
23                formation, or organization of the converting
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1                entity, and organizational form of the converting
 
 2                entity;
 
 3           (B)  That a plan of conversion has been approved;
 
 4           (C)  That an executed plan of conversion is on file at
 
 5                the principal place of business of the converting
 
 6                entity and stating the address thereof; and
 
 7           (D)  That a copy of the plan of conversion shall be
 
 8                furnished by the converting entity prior to the
 
 9                conversion or by the converted entity after the
 
10                conversion on written request and without cost, to
 
11                any member, shareholder, partner or owner of the
 
12                converting entity or the converted entity;
 
13      (2)  If the converting entity is a domestic limited
 
14           liability company, the total number of authorized
 
15           votes, and the number voted for and against the plan;
 
16           and
 
17      (3)  If the converting entity is a foreign limited liability
 
18           company or other entity, a statement that the approval
 
19           of the plan of conversion was duly authorized and
 
20           complied with the laws under which it was incorporated,
 
21           formed, or organized.
 
22      (b)  The articles of conversion shall be delivered to the
 
23 director.  If the converted entity is a domestic limited
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1 liability company the articles of organization of the domestic
 
 2 limited liability company, shall also be delivered to the
 
 3 director with the articles of conversion.
 
 4      (c)  If the director finds that the articles of conversion
 
 5 satisfy the requirements provided by law, and that all required
 
 6 documents are filed, the director shall, after all fees have been
 
 7 paid:
 
 8      (1)  Stamp the word "Filed" on the articles of conversion
 
 9           and the date of the filing;
 
10      (2)  File the document in the director's office; and
 
11      (3)  Issue a certificate of conversion to the converted
 
12           entity or its authorized representatives."
 
13      SECTION 7.  Section 415-2, Hawaii Revised Statutes, is
 
14 amended by adding a new definition to be appropriately inserted
 
15 and to read as follows:
 
16      ""Other entity" includes a domestic or foreign non-profit
 
17 corporation, limited liability company, general partnership,
 
18 limited partnership, limited liability partnership, or a domestic
 
19 professional corporation."
 
20      SECTION 8.  Section 415A-2, Hawaii Revised Statutes, is
 
21 amended by adding a new definition to be appropriately inserted
 
22 and to read as follows:
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      ""Other entity" includes a domestic or foreign corporation,
 
 2 whether organized for profit or not, a domestic or foreign
 
 3 limited liability company, general partnership, limited
 
 4 partnership, or limited liability partnership."
 
 5      SECTION 9.  Section 415B-2, Hawaii Revised Statutes, is
 
 6 amended by adding a new definition to be appropriately inserted
 
 7 and to read as follows:
 
 8      ""Other entity" includes a domestic or foreign corporation,
 
 9 whether organized for profit or not, a domestic or foreign
 
10 limited liability company, general partnership, limited
 
11 partnership, limited liability partnership, or a domestic
 
12 professional corporation."
 
13      SECTION 10.  Section 425-152, Hawaii Revised Statutes, is
 
14 amended by adding a new definition to be appropriately inserted
 
15 and to read as follows:
 
16      ""Other entity" includes a domestic or foreign corporation,
 
17 whether organized for profit or not, a domestic or foreign
 
18 limited partnership, limited liability company, or domestic
 
19 professional corporation."
 
20      SECTION 11.  Section 425D-101, Hawaii Revised Statutes, is
 
21 amended by adding a new definition to be appropriately inserted
 
22 and to read as follows:
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      ""Other entity" includes a domestic or foreign corporation,
 
 2 whether organized for profit or not, a domestic or foreign
 
 3 partnership, limited liability partnership, or limited liability
 
 4 company, or a professional corporation."
 
 5      SECTION 12.  Section 428-901, Hawaii Revised Statutes, is
 
 6 amended by adding a new definition to be appropriately inserted
 
 7 and to read as follows:
 
 8      ""Other entity" includes a foreign or domestic corporation,
 
 9 whether organized for profit or not, a domestic or foreign
 
10 partnership, limited partnership, or limited liability
 
11 partnership, or a domestic professional corporation."
 
12      SECTION 13.  Section 415-128, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "415-128  Fees for filing documents and issuing
 
15 certificates.  (a)  The following fees shall be paid to the
 
16 director upon the filing of corporate documents:
 
17      (1)  Articles of incorporation, $100;
 
18      (2)  Articles of amendment, $50;
 
19      (3)  Restated articles of incorporation, $50;
 
20      (4)  Articles of conversion, merger, or consolidation, $200;
 
21      (5)  Articles of merger (subsidiary corporation), $100;
 
22      (6)  Articles of dissolution, $50;
 
23      (7)  Annual report of domestic and foreign corporations
 
24           organized for profit, $25;
 

 
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                                     H.B. NO.           H.D. 3
                                                        
                                                        

 
 1      (8)  Any other statement, report, certificate,
 
 2           application, or other corporate document, except an
 
 3           annual
 
 4           report, of a domestic or foreign corporation, $50;
 
 5      (9)  Application for a certificate of authority, $100;
 
 6     (10)  Application for a certificate of withdrawal, $50;
 
 7     (11)  Reservation of corporate name, $20;
 
 8     (12)  Transfer of reservation of corporate name, $20;
 
 9     (13)  Good standing certificate, $25;
 
10     (14)  Special handling fee for review of corporation
 
11           documents, excluding articles of conversion, merger, or
 
12           consolidation, $50;
 
13     (15)  Special handling fee for review of articles of
 
14           conversion, merger, or consolidation,  $150;
 
15     (16)  Special handling fee for certificates issued by the
 
16           department, $20 per certificate; and
 
17     (17)  Special handling fee for certification of documents, $1
 
18           per page.
 
19      (b)  All special handling fees shall be credited to the
 
20 special fund established for use by the department in expediting
 
21 the processing of documents.  At least two temporary business
 
22 registration assistant I positions shall be paid out of the
 
23 special fund.
 

 
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 1      (c)  The director shall adjust the fees assessed under this
 
 2 section, as necessary from time to time, through rules adopted
 
 3 under chapter 91 to ensure that the proceeds, together with all
 
 4 other receipts of the special fund under this section do not
 
 5 surpass the annual operating costs of the program.  All
 
 6 unexpended and unencumbered moneys remaining on balance with the
 
 7 fund at the close of each fiscal year which are deemed, by the
 
 8 director of finance, to be in excess of the moneys necessary to
 
 9 carry out the processing of corporate documents over the next
 
10 following fiscal year shall lapse to the credit of the state
 
11 general fund."
 
12      SECTION 14.  Chapter 415B, Hawaii Revised Statutes, is
 
13 amended by amending the title of part IV to read as follows:
 
14                             "PART IV.
 
15          MERGERS [AND], CONSOLIDATIONS, AND CONVERSIONS"
 
16      SECTION 15.  Section 415B-155, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "415B-155  Fees for filing documents and issuing
 
19 certificates.  (a)  The following fees shall be paid to the
 
20 director upon the filing of corporate documents:
 
21      (1)  Articles of incorporation, $50;
 
22      (2)  Articles  of amendment, $20;
 
23      (3)  Restated articles of incorporation, $20;
 

 
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 1      (4)  Articles of merger or consolidation, $100;
 
 2      (5)  Articles of conversion, $200;
 
 3      (6)  Articles of dissolution, $20;
 
 4     [(6)] (7)  Annual report of nonprofit domestic and foreign
 
 5           corporations, $5;
 
 6     [(7)] (8)  Any other statement, report, certificate,
 
 7           application, or other corporate document, except an
 
 8           annual report, of a nonprofit domestic or foreign
 
 9           corporation, $20;
 
10     [(8)] (9)  Application for a certificate of authority, $50;
 
11     [(9)] (10)  Application for a certificate of withdrawal, $20;
 
12    [(10)] (11)  Reservation of corporate name, $20;
 
13    [(11)] (12)  Transfer of reservation of corporate name, $20;
 
14    [(12)] (13)  Good standing certificate, $20;
 
15    [(13)] (14)  Special handling fee for review of corporation
 
16           documents, excluding articles of merger or
 
17           consolidation, $50;
 
18    [(14)] (15)  Special handling fee for review of articles of
 
19           conversion, merger, or consolidation, $150;
 
20    [(15)] (16)  Special handling fee for certificates issued by
 
21           the department, $20 per certificate; and
 
22    [(16)] (17)  Special handling fee for certification of
 
23           documents, $1 per page.
 

 
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 1      (b)  All special handling fees shall be credited to a
 
 2 special fund which may be established for use by the department
 
 3 in expediting the processing of documents.  At least two
 
 4 temporary business registration assistant I positions shall be
 
 5 paid out of the special fund."
 
 6      SECTION 16.  Section 425-12, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "425-12  Fee for filing documents and issuing certificates.
 
 9 (a)  The following fees shall be paid to the director upon the
 
10 filing of general partnership documents:
 
11      (1)  Partnership registration statement, $25;
 
12      (2)  Partnership change of name statement, $25;
 
13      (3)  Partnership dissolution statement, $25;
 
14      (4)  Foreign general partnership registration statement,
 
15           $25;
 
16      (5)  Statement of change, $25;
 
17      (6)  Application of certificate of withdrawal, $10;
 
18      (7)  Statement of correction, $25;
 
19      (8)  Reservation of name, $20;
 
20      (9)  Transfer of reservation of name, $20;
 
21     (10)  Annual statement for domestic or foreign general
 
22           partnership, $10;
 
23     (11)  Good standing certificate, $25;
 

 
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 1     (12)  Articles of conversion, $200:
 
 2    [(12)] (13)  Any other statement, certificate, or other
 
 3           document for a domestic or foreign general partnership,
 
 4           $25;
 
 5    [(13)] (14)  Special handling fee for review of any general
 
 6           partnership document, $20;
 
 7    [(14)] (15)  Special handling fee for certificates issued by
 
 8           the director, $20 per certificate; [and]
 
 9    [(15)] (16)  Special handling fee for certification of
 
10           documents, $1 per page[.]; and
 
11     (17)  Special handling fee for review of articles of
 
12           conversion, $150.
 
13      (b)  All special handling fees shall be credited to the
 
14 special fund authorized by section 415-128."
 
15      SECTION 17.  Section 425-169, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "[[]425-169[]]  Fee for recording.(a)  The director shall
 
18 collect the following fees for documents filed under this part:
 
19      (1)  For each change of partnership name or statement of
 
20           dissolution filed, a fee of $5 per partner, subject to
 
21           a maximum fee of $5,000;
 
22      (2)  For each annual statement filed, a fee of $50;
 

 
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 1      (3)  For each limited liability partnership registered, a
 
 2           fee of $100 for each partner, subject to a maximum fee
 
 3           of $10,000;
 
 4      (4)  For each foreign limited liability partnership
 
 5           registered, a fee of $1,000 if the partnership has
 
 6           fewer than ten partners; $5,000 if the partnership has
 
 7           ten or more but fewer than fifty partners; and $10,000
 
 8           if the partnership has fifty or more partners;
 
 9      (5)  For each reservation or transfer of limited liability
 
10           partnership name, a fee of $100;
 
11      (6)  For each certificate of correction or certificate of
 
12           amendment, a fee of $100;
 
13      (7)  For each certificate of good standing, a fee of $100;
 
14      (8)  For review of articles of conversion, a fee of $200;
 
15     [(8)] (9)  For any other certificate, statement, or document,
 
16           a fee of $100; and
 
17     [(9)] (10)  For each certification of domestic or foreign
 
18           partnership, a fee of $100.
 
19      (b)  The following special handling fees shall be assessed
 
20 by the director for expeditious review of the following
 
21 documents:
 
22      (1)  For limited liability partnerships:  certificate of
 
23           limited liability partnership, $100; certificate of
 

 
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 1           correction, $100; change of name statement, $100;
 
 2           partnership dissolution statement, $100; annual
 
 3           statement, $100; certification of limited liability
 
 4           partnership, $1 a page; certificate of good standing,
 
 5           $100; articles of conversion, $150;
 
 6      (2)  For foreign limited liability partnerships:
 
 7           registration statement, $100; certificate of
 
 8           correction, $100; withdrawal application, $100; annual
 
 9           statement, $100; certification of foreign partnership,
 
10           $1 a page; certificate of good standing, $100; filing
 
11           articles of conversion, $150; and
 
12      (3)  For any other certificate or document authorized by
 
13           this part, $100.
 
14      (c)  All special handling fees shall be credited to the
 
15 special fund authorized by section 415-128.  All other fees
 
16 collected under this section shall be [managed] engaged in
 
17 accordance with section 26-9(l)."
 
18      SECTION 18.  Section 425-191, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "[[]425-191[]]  Merger [or conversion] of domestic general
 
21 and limited liability partnerships.  One of more domestic general
 
22 and limited liability partnerships may be [converted into or]
 
23 merged with a domestic limited liability company pursuant to
 

 
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 1 [section 428-902 or] sections 428-904 to 428-906, as the case may
 
 2 be."
 
 3      SECTION 19.  Section 425D-1107, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "425D-1107  Fees for filing documents and issuing
 
 6 certificates.  (a)  The following fees shall be paid to the
 
 7 director upon the filing of limited partnership documents:
 
 8      (1)  Certificate of limited partnership, $50;
 
 9      (2)  Any certificate of amendment, restatement, or
 
10           correction, $20;
 
11      (3)  Certificate of cancellation, $20;
 
12      (4)  Annual statement for domestic or foreign limited
 
13           partnership, $10;
 
14      (5)  Any other certificate or document of domestic or
 
15           foreign limited partnership, $20;
 
16      (6)  Application for registration as a foreign limited
 
17           partnership, $100;
 
18      (7)  Any certificate of amendment or agent change for
 
19           foreign limited partnership, $20;
 
20      (8)  Application for certificate of withdrawal of foreign
 
21           limited partnership, $20;
 
22      (9)  Reservation of name, $20;
 
23     (10)  Transfer of reservation of name, $20;
 

 
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 1     (11)  Good standing certificate, $20;
 
 2     (12)  Filing articles of conversion, $200;
 
 3     (13)  Special handling fee for review of articles of
 
 4           conversion, $150;
 
 5    [(12)] (14)  Special handling fee for review of any limited
 
 6           partnership document, $50;
 
 7    [(13)] (15)  Special handling of fee for certificates issued
 
 8           by the director, $20 per certificate; and
 
 9    [(14)] (16)  Special handling fee for certification of
 
10           documents, $1 per page.
 
11      (b)  All special handling fees shall be credited to the
 
12 special fund authorized by section 415-128."
 
13      SECTION 20.  Section 425D-1109, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "[[]425D-1109[]]  Merger [or conversion] of domestic
 
16 limited partnerships.  One or more domestic limited partnerships
 
17 may be [converted into or] merged with a domestic limited
 
18 liability company pursuant to [section 428-902 or] sections 428-
 
19 904 to 428-906, as the case may be."
 
20      SECTION 21.  Section 428-903, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "[[]428-903[]]  Effect of conversion [;entity unchanged].
 

 
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 1      [(a)  A general partnership or limited partnership that has
 
 2 been converted to a limited liability company pursuant to section
 
 3 428-902 shall be considered the same legal entity that existed
 
 4 prior to the conversion, the only change shall be the form in
 
 5 which the legal entity now exists.
 
 6      (b)  When the conversion takes effect:
 
 7      (1)  All property owned by the converting general
 
 8           partnerships or-limited partnerships is vested in the
 
 9           limited liability company;
 
10      (2)  All debts, liabilities, and other obligations of the
 
11           converting general partnership or limited partnership
 
12           continue as obligations of the limited liability
 
13           company;
 
14      (3)  Any action or proceeding pending by or against the
 
15           converting general partnership or limited partnership
 
16           may be continue as if the conversion had not occurred
 
17           and the limited liability company may be substituted as
 
18           a party to the actions or proceeding;
 
19      (4)  Except as prohibited by other law, all the rights,
 
20           privileges, immunities, powers, and purposes of the
 
21           converting general partnership or limited partnership
 
22           are vested in the limited liability company; and
 

 
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 1      (5)  Except as otherwise provided in the agreement of the
 
 2           conversion under section 428-902(c), all of the
 
 3           partners of the converting general partnership or
 
 4           limited partnership shall continue as members of the
 
 5           limited liability company.]
 
 6      (a)  When a conversion becomes effective:
 
 7      (1)  The converting entity shall continue to exist without
 
 8           interruption, but in the organizational form of the
 
 9           converted entity;
 
10      (2)  All rights, title, and interest in all real estate and
 
11           other property owned by the converting entity shall
 
12           automatically be owned by the converted entity without
 
13           reversion or impairment, subject to any existing liens
 
14           or other encumbrances thereon;
 
15      (3)  All liabilities and obligations of the converting
 
16           entity shall automatically be liabilities and
 
17           obligations of the converted entity without impairment
 
18           or diminution due to the conversion;
 
19      (4)  The rights of creditors of the converting entity shall
 
20           continue against the converted entity and shall not be
 
21           impaired or extinguished by the conversion;
 
22      (5)  Any action or proceeding pending by or against the
 
23           converting entity may be continued by or against the
 

 
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 1           converted entity without any need for substitution of
 
 2           parties;
 
 3      (6)  The shares and other forms of ownership in the
 
 4           converting entity that are to be converted into shares,
 
 5           or other forms of ownership, or other securities in the
 
 6           converted entity as provided in the plan of conversion
 
 7           shall be converted, and if the converting entity is a
 
 8           domestic limited liability company, the members of the
 
 9           domestic limited liability company shall be entitled
 
10           only to the rights provided in the plan of conversion
 
11           or to the rights to dissent under section 415-80;
 
12      (7)  A shareholder, partner, member, or other owner of the
 
13           converted entity shall be liable for the debts and
 
14           obligations of the converting entity that existed
 
15           before the conversion takes effect only to the extent
 
16           that such shareholder, partner, member, or other owner:
 
17           (A)  Agreed in writing to be liable for such debts or
 
18                obligations;
 
19           (B)  Was liable under applicable law prior to the
 
20                effective date of the conversion, for such debts
 
21                or obligations; or
 
22           (C)  Becomes liable under applicable law for existing
 
23                debts and obligations of the converted entity by
 

 
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 1                becoming a shareholder, partner, member, or other
 
 2                owner of the converted entity;
 
 3      (8)  If the converted entity is a foreign limited liability
 
 4           company or other entity, such converted entity shall
 
 5           appoint a resident of this State as its agent for
 
 6           service of process in a proceeding to enforce any
 
 7           obligation or the rights of dissenting members of the
 
 8           converting domestic limited liability company; and
 
 9      (9)  If the converting entity is a domestic limited
 
10           liability company, the provisions of section 428-907
 
11           shall apply as if the converted entity were the
 
12           survivor of a merger with the converting entity.
 
13      (b)  Upon the issuance of the certificate of conversion by
 
14 the director, the conversion shall be effective."
 
15      SECTION 22.  Section 428-908, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "[[]428-908[]]  Notice of conversion or merger of
 
18 partnership or limited partnership.  A partnership or limited
 
19 partnership which intends to be converted to a limited liability
 
20 company pursuant to [sections 428-902 and] section 428-903 or
 
21 [which] that intends to be party to a merger into a limited
 
22 liability company pursuant to sections 428-905 to 428-907, shall:
 

 
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 1      (1)  Publish, once in each of three successive weeks (three
 
 2           publications) in a newspaper of general circulation
 
 3           published in the State, notice thereof to the
 
 4           public[,]; and
 
 5      (2)  Make reasonable efforts to give notice thereof in a
 
 6           reasonable manner to persons with whom the partnership
 
 7           or limited partnership expects to have a continuing
 
 8           business relationship as of the time of the conversion
 
 9           or merger.  A partnership or limited partnership which
 
10           determines in a reasonable manner the persons to whom
 
11           such notice is given shall be in compliance with this
 
12           section even if notice is not received by all persons
 
13           with whom the partnership or limited partnership
 
14           conducted business prior to the conversion or merger or
 
15           by all persons with whom the limited liability company
 
16           conducts business after the conversion."
 
17      SECTION 23.  Section 428-1301, Hawaii Revised Statues, is
 
18 amended to read as follows:
 
19      "428-1301  Fees.  (a)  The following fees shall be paid to
 
20 the director upon the filing and issuance of records under this
 
21 chapter:
 
22      (1)  Articles of organization, $100;
 
23      (2)  Articles of amendment, $50;
 

 
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 1      (3)  Restated articles of organization, $50;
 
 2      (4)  Articles of merger[,] or conversion, $200;
 
 3      (5)  Statement of dissociation, $50;
 
 4      (6)  Articles of termination, $50;
 
 5      (7)  Application for reinstatement for administratively
 
 6           terminated limited liability company, $50;
 
 7      (8)  Annual report, $25;
 
 8      (9)  Statement of change of designated office or agent for
 
 9           service of process, or both, for limited liability
 
10           company or foreign limited liability company, $50;
 
11     (10)  Statement of resignation of agent for service of
 
12           process, $50;
 
13     (11)  Any other statement or document of a domestic or
 
14           foreign limited liability company, $50;
 
15     (12)  Application for certificate of authority for foreign
 
16           limited liability company, $100;
 
17     (13)  Application for cancellation of authority of foreign
 
18           limited liability company, $50;
 
19     (14)  Reservation of name, $25;
 
20     (15)  Good standing certificate, $25;
 
21     (16)  Any other record not otherwise covered in this part,
 
22           $50;
 

 
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 1     (17)  Certified copy of any record relating to a limited
 
 2           liability company or foreign limited liability company,
 
 3           25 cents per page, and $10 for the certificate and
 
 4           affixing the seal thereto;
 
 5     (18)  Special handling fee for review of any record other
 
 6           than articles of merger[,] or conversion, $80;
 
 7     (19)  Special handling fee for review of articles of
 
 8           merger[,] or conversion, $200;
 
 9     (20)  Special handling fee for certificates issued by the
 
10           director not otherwise covered by this part, $10 per
 
11           certificate;
 
12     (21)  Special handling fee for certification of record, $1
 
13           per page; and
 
14     (22)  Any service of notice, demand, or process upon the
 
15           director as agent for service of process of a limited
 
16           liability company or foreign limited liability company,
 
17           $50, which amount may be recovered as taxable costs by
 
18           the party to the suit or action causing such service to
 
19           be made if such party prevails in the suit or action.
 
20      (b)  All special handling fees shall be credited to the
 
21 special fund authorized by section 415-128."
 
22      SECTION 24.  Section 428-902, Hawaii Revised Statutes, is
 
23 repealed.
 

 
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 1      ["[428-902]  Conversion of partnerships or limited
 
 2 partnerships to limited liability company.(a) A domestic
 
 3 partnership or domestic limited partnership may be converted into
 
 4 a domestic limited liability company pursuant to this section.
 
 5      (b)  The terms and conditions of a conversion of a
 
 6 partnership or limited partnership to a limited liability company
 
 7 shall be approved by all of the partners or by the number or
 
 8 percentage of the partners required for conversion in the
 
 9 partnership agreement.
 
10      (c)  An agreement of conversion approved under subsection
 
11 (b) shall set forth the terms and conditions of the conversion of
 
12 the interests of the general partners in the case of a general
 
13 partnership and the interests of the general partners and limited
 
14 partners in the case of limited partnership, being converted into
 
15 interests in the limited liability company and any cash or other
 
16 consideration to be paid or delivered as a result of the
 
17 conversion or any combination thereof.
 
18      (d)  Upon compliance with subsection (b) and section 428-
 
19 908, the general partnership or limited partnership shall file
 
20 articles or organization in the office of the director which
 
21 satisfy the requirements of section 428-203 and contain:
 
22      (1)  A statement that the general partnership or limited
 
23           partnership was converted to a limited liability
 
24           company;
 

 
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 1      (2)  The name of the former partnership or limited
 
 2           partnership;
 
 3      (3)  A statement detailing the approvals by the general
 
 4           partners in the case of a general partnership
 
 5           conversion, and the general partners and limited
 
 6           partners in the case of a limited partnership
 
 7           conversion, noting the respective votes taken required
 
 8           to approve the conversion under subsection (b);
 
 9      (4)  A statement of cancellation of the partnership
 
10           registration statement in the case of a general
 
11           partnership conversion, or statement of cancellation of
 
12           the certificate of limited partnership in the case of a
 
13           limited partnership conversion, specifying an effective
 
14           date as provided in subsection (f) if the effective
 
15           date is not to be the date of filing; and
 
16      (5)  A statement of compliance with section 428-908.
 
17      (e)  In the case of a general or limited partnership, the
 
18 filing of the articles of organization under subsection (d)
 
19 cancels the partnership registration statement or the certificate
 
20 of limited partnership.
 
21      (f)  A conversion becomes effective upon the filing of the
 
22 articles of organization or upon the time and date subsequent to
 
23 the filing as set forth in the articles but not more than thirty
 
24 days after being filed.
 

 
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 1      (g)  A general partner who becomes a member of a limited
 
 2 liability company as a result of a conversion remains liable as a
 
 3 general partner for any obligation incurred by the general
 
 4 partnership or limited partnership before the conversion has
 
 5 taken effect.  A general partner's liability for all obligations
 
 6 of the limited liability company incurred after the conversion
 
 7 becomes effective shall be that of a member of the limited
 
 8 liability company.
 
 9      (h)  A limited partner who becomes a member as a result of a
 
10 conversion remains liable only to the extent the limited partner
 
11 was liable for an obligation incurred by the limited partnership
 
12 before the conversion takes effect."]
 
13      SECTION 25.  In codifying the new sections added by sections
 
14 1, 2, 3, 4, 5, and 6 of this Act, the revisor of statutes shall
 
15 substitute appropriate section numbers for the letters used in
 
16 the new sections designated in this Act.
 
17      SECTION 26.  Statutory material to be repealed is bracketed.
 
18 New statutory material is underscored.
 
19      SECTION 27.  This Act shall take effect on July 1, 2000.
 

 
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