Chapter 362 Oregon Laws 1999

Session Law

AN ACT

SB 145

Relating to business organizations; creating new provisions; amending ORS 58.045, 58.410, 60.001, 60.007, 60.481, 60.487, 60.494, 60.497, 60.554, 62.015, 62.030, 62.605, 62.615, 62.620, 63.001, 63.007, 63.481, 63.487, 63.494, 63.497, 67.255, 67.260, 67.340, 67.360, 67.365, 67.525, 70.005, 70.065, 732.521 and 732.538; repealing ORS 58.125, 62.610, 62.625, 62.635, 63.501, 67.345, 67.350, 67.355 and 67.370 and sections 8, 9, 10, 11, 13 and 14, chapter 652, Oregon Laws 1999 (Enrolled House Bill 2212); and declaring an emergency.

PROFESSIONAL CORPORATIONS

(ORS Chapter 58)

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 58.045 is amended to read:

58.045. (1) The Oregon Business Corporation Act is applicable to domestic and foreign professional corporations except when inconsistent with this chapter. This chapter takes precedence in the event of any conflict with provisions of the Oregon Business Corporation Act.

(2) Subject to the limitations of ORS 58.196, all provisions of the Oregon Business Corporation Act governing mergers and conversions apply to domestic and foreign professional corporations.

SECTION 2. ORS 58.410 is amended to read:

58.410. (1) The Secretary of State shall collect the following fees for the documents delivered for filing:

___________________________________________________________________

Document Fee

(a) Articles of incorporation $ 40

(b) Application for reserved name $ 10

corporation for reinstatement

following administrative

dissolution $ 30

(d) Application of a foreign

professional corporation

for authority to transact

business in this state $ 440

(e) Annual report of a domestic

professional corporation $ 20

(f) Annual report of a foreign

professional corporation $ 220

(g) Application for certificate

of existence or authorization $ 10

(h) Amendments to articles of

incorporation and authority $ 10

(i) Restated articles of

incorporation $ 10

(j) Mergers and share exchanges $ 10

(k) Dissolutions and withdrawals $ 10

(L) Change of registered agent

or office $ 10

(m) Registered agent resignations $ 10

(n) Corrections of annual report $ 10

(o) Articles of conversion $ 10

___________________________________________________________________

(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under this chapter.

(3) The Secretary of State by rule may establish fees, in addition to those provided for in subsections (1) and (2) of this section, for:

(a) Copying any public record maintained by the Office of Secretary of State and relating to a domestic or foreign professional corporation, and for certifying the copy.

(b) Certifying to facts of record, other than a certificate of existence, pursuant to ORS 58.480.

SECTION 2a. If House Bill 2212 becomes law, section 8, chapter 652, Oregon Laws 1999 (Enrolled House Bill 2212) (amending ORS 58.410), is repealed and ORS 58.410, as amended by section 2 of this 1999 Act, is amended to read:

58.410. [(1) The Secretary of State shall collect the following fees for the documents delivered for filing:]

[_________________________________________________________________]

Document Fee

(a) Articles of incorporation $ 40

(b) Application for reserved name $ 10

(c) Application of a professional

corporation for reinstatement

following administrative

dissolution $ 30

(d) Application of a foreign

professional corporation

for authority to transact

business in this state $ 440

(e) Annual report of a domestic

professional corporation $ 20

(f) Annual report of a foreign

professional corporation $ 220

(g) Application for certificate

of existence or authorization $ 10

(h) Amendments to articles of

incorporation and authority $ 10

(i) Restated articles of

incorporation $ 10

(j) Mergers and share exchanges $ 10

(k) Dissolutions and withdrawals $ 10

(L) Change of registered agent

or office $ 10

(m) Registered agent resignations $ 10

(n) Corrections of annual report $ 10

(o) Articles of conversion $ 10

[_________________________________________________________________]

[(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under this chapter.]

[(3) The Secretary of State by rule may establish fees, in addition to those provided for in subsections (1) and (2) of this section, for:]

[(a) Copying any public record maintained by the Office of Secretary of State and relating to a domestic or foreign professional corporation, and for certifying the copy.]

[(b) Certifying to facts of record, other than a certificate of existence, pursuant to ORS 58.480.] The Secretary of State shall collect the fees described in ORS 56.140 for each document delivered for filing under this chapter and for process served on the secretary under this chapter. The secretary may collect the fees described in ORS 56.140 for copying any public record under this chapter, certifying the copy or certifying to other facts of record under this chapter.

SECTION 2b. The amendments to ORS 58.410 by section 2a of this 1999 Act become operative July 1, 2001.

CORPORATIONS

(ORS Chapter 60)

SECTION 3. ORS 60.001 is amended to read:

60.001. As used in this chapter:

(1) "Anniversary" means that day each year exactly one or more years after:

(a) The date of filing by the Secretary of State of the articles of incorporation in the case of a domestic corporation.

(b) The date of filing by the Secretary of State of an application for authority to transact business in the case of a foreign corporation.

(2) "Articles of incorporation" include amended and restated articles of incorporation, articles of conversion and articles of merger.

(3) "Authorized shares" means the shares of all classes a domestic or foreign corporation is authorized to issue.

(4) "Conspicuous" means so written that a reasonable person against whom the writing is to operate should have noticed it. For example, printing in italics, boldface or contrasting color, typing in capitals or underlined is conspicuous.

(5) "Corporation" or "domestic corporation" means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of this chapter.

(6) "Distribution" means a direct or indirect transfer of money or other property, except of a corporation's own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of a declaration or payment of a dividend, a purchase, redemption or other acquisition of shares, a distribution of indebtedness, or otherwise.

(7) "Employee" includes an officer but not a director. A director may accept duties that make the director also an employee.

(8) "Entity" includes a corporation, foreign corporation, nonprofit corporation, profit and nonprofit unincorporated association, business trust, estate, partnership, trust, two or more persons having a joint or common economic interest, any state, the United States and any foreign government.

(9) "Foreign corporation" means a corporation for profit incorporated under a law other than the law of this state.

(10) "Governmental subdivision" includes an authority, county, district and municipality.

(11) "Includes" denotes a partial definition.

(12) "Individual" means a natural person.

(13) "Means" denotes an exhaustive definition.

(14) "Office," when used to refer to the administrative unit directed by the Secretary of State, means the office of the Secretary of State.

(15) "Person" includes individual and entity.

(16) "Principal office" means the office, in or out of this state, where the principal executive offices of a domestic or foreign corporation are located and designated in the annual report or application for authority to transact business in this state.

(17) "Proceeding" includes civil, criminal, administrative and investigatory action.

(18) "Record date" means the date established under this chapter on which a corporation determines the identity of its shareholders and their shareholdings for purposes of this chapter. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.

(19) "Share" means the units into which the proprietary interest in a corporation are divided.

(20) "Shareholder" means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.

(21) "State," when referring to a part of the United States, includes a state, commonwealth, territory and insular possession of the United States and its agencies and governmental subdivisions.

(22) "Subscriber" means a person who subscribes for shares in a corporation, whether before or after incorporation.

(23) "United States" includes a district, authority, bureau, commission, department and any other agency of the United States.

(24) "Voting group" means all shares of one or more classes or series that under the articles of incorporation or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or this chapter to vote generally on the matter are for that purpose a single voting group.

SECTION 4. ORS 60.007 is amended to read:

60.007. (1) The Secretary of State shall collect the following fees for the documents delivered for filing:

___________________________________________________________________

Document Fee

(a) Articles of incorporation $ 50

(b) Application for reserved name $ 10

(d) Application of a domestic

corporation for reinstatement

following administrative

dissolution $ 15

(e) Application of a foreign

corporation for authority to

transact business in this state $ 440

(f) Annual report of a domestic

corporation $ 30

(g) Annual report of a foreign

corporation $ 220

(h) Application for certificate of

existence or authorization $ 10

(i) Application of a foreign

corporation for reinstatement $ 50

(j) Amendments to articles of

incorporation and authority $ 10

(k) Restated articles of

incorporation $ 10

(L) [Mergers and share exchanges]

Articles of merger or

share exchange $ 10

(m) Dissolutions and withdrawals $ 10

(n) Change of registered agent or

office $ 10

(o) Registered agent resignations $ 10

(p) Correction of annual report $ 10

(q) Articles of conversion $ 10

___________________________________________________________________

(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under this chapter.

(3) The Secretary of State by rule may establish fees, in addition to those provided for in subsections (1) and (2) of this section, for:

(a) Copying any public record maintained by the office and relating to a domestic or foreign corporation and for certifying the copy.

(b) Certifying to other facts of record pursuant to ORS 60.027.

SECTION 4a. If House Bill 2212 becomes law, section 9, chapter 652, Oregon Laws 1999 (Enrolled House Bill 2212) (amending ORS 60.007), is repealed and ORS 60.007, as amended by section 4 of this 1999 Act, is amended to read:

60.007. [(1) The Secretary of State shall collect the following fees for the documents delivered for filing:]

[_________________________________________________________________]

Document Fee

(a) Articles of incorporation $ 50

(b) Application for reserved name $ 10

(c) Application for registered name $ 100

(d) Application of a domestic

corporation for reinstatement

following administrative

dissolution $ 15

(e) Application of a foreign

corporation for authority to

transact business in this state $ 440

(f) Annual report of a domestic

corporation $ 30

(g) Annual report of a foreign

corporation $ 220

(h) Application for certificate of

existence or authorization $ 10

(i) Application of a foreign

corporation for reinstatement $ 50

(j) Amendments to articles of

incorporation and authority $ 10

(k) Restated articles of

incorporation $ 10

(L) Articles of merger or

share exchange $ 10

(m) Dissolutions and withdrawals $ 10

(n) Change of registered agent or

office $ 10

(o) Registered agent resignations $ 10

(p) Correction of annual report $ 10

(q) Articles of conversion $ 10

[_________________________________________________________________]

[(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under this chapter.]

[(3) The Secretary of State by rule may establish fees, in addition to those provided for in subsections (1) and (2) of this section, for:]

[(a) Copying any public record maintained by the office and relating to a domestic or foreign corporation and for certifying the copy.]

[(b) Certifying to other facts of record pursuant to ORS 60.027.] The Secretary of State shall collect the fees described in ORS 56.140 for each document delivered for filing under this chapter and for process served on the secretary under this chapter. The secretary may collect the fees described in ORS 56.140 for copying any public record under this chapter, certifying the copy or certifying to other facts of record under this chapter.

SECTION 4b. The amendments to ORS 60.007 by section 4a of this 1999 Act become operative July 1, 2001.

SECTION 5. Sections 6 to 10 of this 1999 Act are added to and made a part of ORS 60.481 to 60.501.

SECTION 6. Definitions. As used in ORS 60.481 to 60.501:

(1) "Business entity" means any of the following for-profit entities:

(a) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

(b) A corporation organized under this chapter, predecessor law or comparable law of another jurisdiction;

(c) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction;

(d) A limited liability company organized under ORS chapter 63 or comparable law of another jurisdiction;

(e) A partnership organized in Oregon after January 1, 1998, or that is registered as a limited liability partnership, or that has elected to be governed by ORS chapter 67, and a partnership governed by law of another jurisdiction that expressly provides for conversions and mergers; and

(f) A limited partnership organized under ORS chapter 70, predecessor law or comparable law of another jurisdiction.

(2) "Organizational document" means the following for an Oregon business entity or, for a foreign business entity, a document equivalent to the following:

(a) In the case of a corporation, professional corporation or cooperative, articles of incorporation;

(b) In the case of a limited liability company, articles of organization;

(c) In the case of a partnership, a partnership agreement and, for a limited liability partnership, its registration; and

(d) In the case of a limited partnership, a certificate of limited partnership.

(3) "Owner" means a:

(a) Shareholder of a corporation or of a professional corporation;

(b) Member or shareholder of a cooperative;

(c) Member of a limited liability company;

(d) Partner of a partnership; and

(e) General partner or limited partner of a limited partnership.

SECTION 7. Conversion. (1) A business entity other than a corporation may be converted to a corporation, and a corporation may be converted to another business entity, pursuant to this section, by adopting a plan of conversion, if conversion is permitted by the statutes governing the other business entity.

(2) The plan of conversion shall set forth:

(a) The name and type of the business entity prior to conversion;

(b) The name and type of the business entity after conversion;

(c) The terms and conditions of the conversion;

(d) The manner and basis of converting the ownership interests of each owner into ownership interests or obligations of the converted business entity or any other business entity, or into cash or other property in whole or in part; and

(e) Any additional information required in the organizational document of the converted business entity by the statutes governing that type of business entity.

(3) The plan of conversion may set forth other provisions relating to the conversion.

SECTION 8. Action on plan of conversion. (1) A plan of conversion shall be approved as follows:

(a) In the case of a corporation, in the manner provided in ORS 60.487 for mergers; and

(b) In the case of a business entity other than a corporation, as provided by the statutes governing that business entity.

(2) After a conversion is approved, and at any time before articles of conversion are filed, the planned conversion may be abandoned, subject to any contractual rights:

(a) By a corporation, in the manner provided in ORS 60.487 (9); and

(b) By a business entity that planned to convert to a corporation, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner permitted by the statutes governing that business entity.

SECTION 9. Articles of conversion. (1) After conversion is approved by the owners, the business entity shall file articles of conversion, which shall state the name and type of business entity prior to conversion and the name and type of business entity after conversion, and shall include the plan of conversion.

(2) The conversion takes effect at the later of the date and time determined pursuant to ORS 60.011 or the date and time determined pursuant to the statutes governing the business entity that is not a corporation.

SECTION 10. Effect of conversion; entity existence continues. (1) When a conversion to or from a corporation pursuant to section 7 of this 1999 Act takes effect:

(a) The business entity continues its existence despite the conversion;

(b) Title to all real estate and other property owned by the converting business entity is vested in the converted business entity without reversion or impairment;

(c) All obligations of the converting business entity, including, without limitation, contractual, tort, statutory and administrative obligations, are obligations of the converted business entity;

(d) An action or proceeding pending against the converting business entity or its owners may be continued as if the conversion had not occurred, or the converted business entity may be substituted as a party to the action or proceeding;

(e) The ownership interests of each owner that are to be converted into ownership interests or obligations of the converted business entity or any other business entity, or into cash or other property, are converted as provided in the plan of conversion;

(f) Liability of an owner for obligations of the business entity, including, without limitation, contractual, tort, statutory and administrative obligations, shall be determined:

(A) As to liabilities incurred prior to conversion, according to the laws applicable prior to conversion; and

(B) As to liabilities incurred after conversion, according to the laws applicable after conversion, except as provided in paragraph (g) of this subsection;

(g) If prior to conversion an owner of a business entity was a partner of a partnership or general partner of a limited partnership and was personally liable for the business entity's liabilities, and after conversion is an owner normally protected from personal liability, then such owner shall continue to be personally liable for the business entity's liabilities incurred during the 12 months following conversion, if the other party or parties to the transaction reasonably believed that the owner would be personally liable and had not received notice of the conversion; and

(h) The registration of an assumed business name of a business entity pursuant to ORS chapter 648 shall continue as the assumed business name of the converted business entity.

(2) Owners of the business entity that converted are entitled to the rights provided in the plan of conversion and:

(a) In the case of shareholders of a corporation, the right to dissent and obtain payment of the fair value of the shareholder's shares as provided in ORS 60.551 to 60.594; and

(b) In the case of owners of business entities other than corporations, the rights provided in the statutes, common law and private agreements applicable to the business entity prior to conversion, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

SECTION 11. ORS 60.481 is amended to read:

60.481. [(1) One or more corporations may merge into another corporation if the board of directors of each corporation adopts a plan of merger and, if required by ORS 60.487, the shareholders of each corporation approve a plan of merger.]

[(2) The plan of merger must set forth:]

[(a) The name of each corporation planning to merge and the name of the surviving corporation into which each other corporation plans to merge;]

[(b) The terms and conditions of the merger; and]

[(c) The manner and basis of converting the shares of each corporation into shares, obligations, or other securities of the surviving or any other corporation or into cash or other property in whole or part, or of canceling any part of the shares.]

[(3) The plan of merger may set forth:]

[(a) Amendments to the articles of incorporation of the surviving corporation; and]

[(b) Other provisions relating to the merger.]

[(4) One or more corporations may merge with a nonprofit corporation under ORS 65.481 to 65.504.]

(1) One or more corporations may merge with one or more business entities, pursuant to this section, if each business entity that is a party to the merger approves a plan of merger and if the merger is permitted by the statutes governing each business entity. The business entity that survives may be a corporation or another business entity.

(2) The plan of merger shall set forth:

(a) The name and type of each business entity planning to merge;

(b) The name and type of the business entity that will survive;

(c) The terms and conditions of the merger;

(d) The manner and basis of converting the shares or other ownership interests of each owner into shares, ownership interests or obligations of the surviving business entity or any other business entity, or into cash or other property in whole or in part; and

(e) If any party is a business entity other than a corporation, any additional information required for a merger by the statutes governing that business entity.

(3) The plan of merger may set forth:

(a) Amendments to the articles of incorporation of a corporation, if the corporation is the surviving business entity; and

(b) Other provisions relating to the merger.

(4) One or more corporations may merge with a nonprofit corporation under ORS 65.481 to 65.504.

SECTION 12. ORS 60.487 is amended to read:

60.487. (1) After adopting a plan of merger or share exchange, the board of directors of each corporation party to the merger and the board of directors of the corporation whose shares will be acquired in the share exchange, shall submit the plan of merger, except as provided in subsection (7) of this section, or share exchange for approval by its shareholders.

(2) For a plan of merger or share exchange to be approved:

(a) The board of directors shall direct by resolution that the plan of merger or share exchange be submitted to a vote at a meeting of shareholders, which may be either an annual or a special meeting; and

(b) The shareholders entitled to vote must approve the plan.

(3) The board of directors may condition its submission of the proposed merger or share exchange on any basis.

(4) The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with ORS 60.214. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger or share exchange and contain or be accompanied by a copy or summary of the plan.

(5) Unless this chapter, the articles of incorporation or the board of directors, acting pursuant to subsection (3) of this section, requires a greater vote or a vote by voting groups, the plan of merger or share exchange to be authorized shall be approved by each voting group entitled to vote separately on the plan by a majority of all the votes entitled to be cast on the plan by that voting group.

(6) Separate voting by voting groups is required:

(a) On a plan of merger if the plan contains a provision that, if contained in a proposed amendment to articles of incorporation, would require action by one or more separate voting groups on the proposed amendment under ORS 60.441, except that separate voting by a voting group is not required if:

(A) Under the plan of merger, the shares that constitute the voting group are to be converted into shares, obligations, other securities, cash or other property with a value at least equal to the value the shares would receive in a liquidation of the corporation. For purposes of determining the value the shares would receive in a liquidation of the corporation, the value of property available for distribution to all shareholders in the liquidation shall be assumed to be equal to the total value of shares, obligations, other securities, cash or other property into which all shares of the corporation are to be converted under the plan of merger; or

(B) The articles of incorporation provide that the voting group is not entitled to vote separately on a plan of merger; and

(b) On a plan of share exchange by each class or series of shares included in the exchange, with each class or series constituting a separate voting group.

(7) Action by the shareholders of the surviving corporation on a plan of merger is not required if:

(a) The articles of incorporation of the surviving corporation will not differ, except for amendments enumerated in ORS 60.434, from its articles before the merger;

(b) Each shareholder of the surviving corporation whose shares were outstanding immediately before the effective date of the merger will hold the same number of shares, with identical designations, preferences, limitations and relative rights, immediately after;

(c) The number of voting shares outstanding immediately after the merger, plus the number of voting shares issuable as a result of the merger, either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 20 percent the total number of voting shares of the surviving corporation outstanding immediately before the merger; and

(d) The number of participating shares outstanding immediately after the merger, plus the number of participating shares issuable as a result of the merger, either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 20 percent the total number of participating shares outstanding immediately before the merger.

(8) As used in subsection (7) of this section:

(a) "Participating shares" means shares that entitle their holders to participate without limitation in distributions.

(b) "Voting shares" means shares that entitle their holders to vote unconditionally in elections of directors.

(9) After a merger or share exchange is authorized, and at any time before articles of merger or share exchange are filed, the planned merger or share exchange may be abandoned, subject to any contractual rights, without further shareholder action, in accordance with the procedure set forth in the plan of merger or share exchange or, if none is set forth, in the manner determined by the board of directors.

(10) If a party to a plan of merger is a business entity other than a corporation, approval of the plan, and abandonment of the plan after approval, shall be in accordance with the statutes governing that business entity.

SECTION 13. ORS 60.494 is amended to read:

60.494. [(1) After a plan of merger or share exchange is approved by the shareholders or adopted by the board of directors if shareholder approval is not required, the surviving or acquiring corporation shall deliver to the office for filing articles of merger or share exchange setting forth:]

[(a) The plan of merger or share exchange;]

[(b) If shareholder approval was not required, a statement to that effect; and]

[(c) If approval of the shareholders of one or more corporations party to the merger or share exchange was required:]

[(A) The designation, number of outstanding shares and number of votes entitled to be cast by each voting group entitled to vote separately on the plan as to each corporation; and]

[(B) The total number of votes cast for and against the plan by each voting group entitled to vote separately on the plan.]

[(2) Unless a delayed effective date is specified, a merger or share exchange takes effect when the articles of merger or share exchange are filed.]

(1) After a plan of merger or share exchange is approved by the owners of each business entity, or adopted by a board of directors if shareholder approval is not required, the surviving or acquiring business entity shall deliver to the office of the Secretary of State, for filing, articles of merger setting forth:

(a) The plan of merger or share exchange;

(b) For each corporation that is a party to the merger or share exchange:

(A) If shareholder approval was not required, a statement to that effect; or

(B) If shareholder approval was required:

(i) The designation, number of outstanding shares and number of votes entitled to be cast by each voting group entitled to vote separately on the plan as to each corporation; and

(ii) The total number of votes cast for and against the plan by each voting group entitled to vote separately on the plan; and

(c) For each business entity other than a corporation that is a party to the merger, a statement that the plan of merger was duly authorized and approved in accordance with the statutes governing that business entity.

(2) The merger or share exchange takes effect on the later of the date and time determined pursuant to ORS 60.011 or the date and time determined pursuant to the statutes governing any business entity other than a corporation that is a party to the merger.

SECTION 14. ORS 60.497 is amended to read:

60.497. [(1) When a merger takes effect:]

[(a) Every other corporation party to the merger merges into the surviving corporation and the separate existence of every corporation except the surviving corporation ceases;]

[(b) The title to all real estate and other property owned by each corporation party to the merger is vested in the surviving corporation without reversion or impairment;]

[(c) The surviving corporation has all liabilities of each corporation party to the merger;]

[(d) A proceeding pending against any corporation party to the merger may be continued as if the merger did not occur or the surviving corporation may be substituted in the proceeding for the corporation whose existence ceased;]

[(e) The articles of incorporation of the surviving corporation are amended to the extent provided in the plan of merger; and]

[(f) The shares of each corporation party to the merger that are to be converted into shares, obligations or other securities of the surviving or any other corporation or into cash or other property are converted and the former holders of the shares are entitled only to the rights provided in the articles of merger or to their rights under this chapter.]

[(2) When a share exchange takes effect, the shares of each acquired corporation are exchanged as provided in the plan, and the former holders of the shares are entitled only to the exchange rights provided in the articles of share exchange or to their rights under this chapter.]

(1) When a merger involving a corporation takes effect:

(a) Every other business entity that is a party to the merger merges into the surviving business entity, and the separate existence of every other party ceases;

(b) Title to all real estate and other property owned by each of the business entities that were parties to the merger is vested in the surviving business entity without reversion or impairment;

(c) All obligations of each of the business entities that were parties to the merger, including, without limitation, contractual, tort, statutory and administrative obligations, are obligations of the surviving business entity;

(d) An action or proceeding pending against each of the business entities or its owners that were parties to the merger may be continued as if the merger had not occurred, or the surviving business entity may be substituted as a party to the action or proceeding;

(e) If a corporation is the surviving business entity, its articles of incorporation are amended to the extent provided in the plan of merger;

(f) The shares or other ownership interests of each owner that are to be converted into ownership interests or obligations of the converted business entity or any other business entity, or into cash or other property, are converted as provided in the plan of merger;

(g) Liability of an owner for obligations of the business entity, including, without limitation, contractual, tort, statutory and administrative obligations, shall be determined:

(A) As to obligations incurred prior to merger, according to the laws applicable prior to merger; and

(B) As to obligations incurred after merger, according to the laws applicable after merger, except as provided in paragraph (h) of this subsection;

(h) If prior to merger an owner of a business entity was a partner of a partnership or general partner of a limited partnership and was personally liable for the business entity's obligations, and after merger is an owner normally protected from personal liability, then such owner shall continue to be personally liable for the business entity's obligations incurred during the 12 months following merger, if the other party or parties to the transaction reasonably believed that the owner would be personally liable and had not received notice of the merger; and

(i) The registration of an assumed business name of a business entity pursuant to ORS chapter 648 shall continue as the assumed business name of the surviving business entity.

(2) Owners of the business entities that merged are entitled to the rights provided in the plan of merger and:

(a) In the case of shareholders, the rights provided in this chapter; and

(b) In the case of owners of business entities other than corporations, the rights provided in the statutes applicable to that business entity, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

(3) When a share exchange takes effect, the shares of each acquired corporation are exchanged as provided in the plan, and the former holders of the shares are entitled only to the exchange rights provided in the articles of share exchange or to their rights under this chapter.

SECTION 15. ORS 60.554 is amended to read:

60.554. (1) Subject to subsection (2) of this section, a shareholder is entitled to dissent from, and obtain payment of the fair value of the shareholder's shares in the event of, any of the following corporate acts:

(a) Consummation of a plan of merger to which the corporation is a party if shareholder approval is required for the merger by ORS 60.487 or the articles of incorporation and the shareholder is entitled to vote on the merger or if the corporation is a subsidiary that is merged with its parent under ORS 60.491;

(b) Consummation of a plan of share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is entitled to vote on the plan;

(c) Consummation of a sale or exchange of all or substantially all of the property of the corporation other than in the usual and regular course of business, if the shareholder is entitled to vote on the sale or exchange, including a sale in dissolution, but not including a sale pursuant to court order or a sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one year after the date of sale;

(d) An amendment of the articles of incorporation that materially and adversely affects rights in respect of a dissenter's shares because it:

(A) Alters or abolishes a preemptive right of the holder of the shares to acquire shares or other securities; or

(B) Reduces the number of shares owned by the shareholder to a fraction of a share if the fractional share so created is to be acquired for cash under ORS 60.141; [or]

(e) Any corporate action taken pursuant to a shareholder vote to the extent the articles of incorporation, bylaws or a resolution of the board of directors provides that voting or nonvoting shareholders are entitled to dissent and obtain payment for their shares; or

(f) Conversion to a noncorporate business entity pursuant to section 7 of this 1999 Act.

(2) A shareholder entitled to dissent and obtain payment for the shareholder's shares under ORS 60.551 to 60.594 may not challenge the corporate action creating the shareholder's entitlement unless the action is unlawful or fraudulent with respect to the shareholder or the corporation.

(3) Dissenters' rights shall not apply to the holders of shares of any class or series if the shares of the class or series were registered on a national securities exchange or quoted on the National Association of Securities Dealers, Inc. Automated Quotation System as a National Market System issue on the record date for the meeting of shareholders at which the corporate action described in subsection (1) of this section is to be approved or on the date a copy or summary of the plan of merger is mailed to shareholders under ORS 60.491, unless the articles of incorporation otherwise provide.

COOPERATIVES

(ORS Chapter 62)

SECTION 16. ORS 62.015 is amended to read:

62.015. As used in this chapter, unless the context requires otherwise:

(1) "Anniversary" means that day each year exactly one or more years after:

(a) The date of filing by the Secretary of State of the articles of incorporation in the case of a domestic cooperative.

(b) The date of filing by the Secretary of State of an application for authority to transact business in the case of a foreign cooperative.

(2) "Articles" means articles of incorporation, articles of conversion and articles of merger.

(3) "Board" means board of directors.

(4) "Cooperative" means a cooperative corporation which is subject to the provisions of this chapter.

(5) "Corporation" means a corporation which is not a cooperative.

(6) "Foreign cooperative" means a cooperative corporation organized under laws other than the laws of this state.

(7) "Member" means a person who has been qualified and accepted for membership in a cooperative.

(8) "Membership stock" means any class of stock, continuous ownership of which is required for membership in a cooperative.

(9) "Person" includes individuals, corporations, associations, firms, partnerships, joint stock companies, trusts, estates and foreign and domestic cooperative corporations.

(10) "Shareholder" means a holder of shares of capital stock of a cooperative other than membership stock.

SECTION 17. ORS 62.030 is amended to read:

62.030. (1) The Secretary of State shall collect the following fees for the documents delivered for filing:

___________________________________________________________________

Document Fee

(a) Articles of incorporation $ 40

(b) Application for reserved

name $ 10

for reinstatement following

administrative dissolution $ 30

(d) Annual report of a cooperative $ 20

(e) Application for certificate of

existence $ 10

(f) Dissolutions $ 10

(g) Change of registered agent

or office $ 10

(h) Registered agent resignation $ 10

(i) Correction of annual

report/articles $ 10

(j) Amendments $ 10

(k) Restated articles of

incorporation $ 10

(L) Articles of merger $ 10

(m) Articles of conversion $ 10

___________________________________________________________________

(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under this chapter.

(3) The Secretary of State by rule may establish fees, in addition to those provided for in subsections (1) and (2) of this section, for:

(a) Copying any public record maintained by the Office of Secretary of State and relating to a cooperative, and for certifying the copy.

(b) Certifying to facts of record, other than a certificate of existence, pursuant to ORS 62.065.

SECTION 17a. If House Bill 2212 becomes law, section 10, chapter 652, Oregon Laws 1999 (Enrolled House Bill 2212) (amending ORS 62.030), is repealed and ORS 62.030, as amended by section 17 of this 1999 Act, is amended to read:

62.030. [(1) The Secretary of State shall collect the following fees for the documents delivered for filing:]

[_________________________________________________________________]

Document Fee

(a) Articles of incorporation $ 40

(b) Application for reserved

name $ 10

(c) Application of a cooperative

for reinstatement following

administrative dissolution $ 30

(d) Annual report of a cooperative $ 20

(e) Application for certificate of

existence $ 10

(f) Dissolutions $ 10

(g) Change of registered agent

or office $ 10

(h) Registered agent resignation $ 10

(i) Correction of annual

report/articles $ 10

(j) Amendments $ 10

(k) Restated articles of

incorporation $ 10

(L) Articles of merger $ 10

(m) Articles of conversion $ 10

[_________________________________________________________________]

[(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under this chapter.]

[(3) The Secretary of State by rule may establish fees, in addition to those provided for in subsections (1) and (2) of this section, for:]

[(a) Copying any public record maintained by the Office of Secretary of State and relating to a cooperative, and for certifying the copy.]

[(b) Certifying to facts of record, other than a certificate of existence, pursuant to ORS 62.065.] The Secretary of State shall collect the fees described in ORS 56.140 for each document delivered for filing under this chapter and for process served on the secretary under this chapter. The secretary may collect the fees described in ORS 56.140 for copying any public record under this chapter, certifying the copy or certifying to other facts of record under this chapter.

SECTION 17b. The amendments to ORS 62.030 by section 17a of this 1999 Act become operative July 1, 2001.

SECTION 18. ORS 62.605 is amended to read:

62.605. [As used in ORS 62.610 to 62.635, "surviving cooperative" means the cooperative designated in the plan of merger as the surviving cooperative.] As used in this section and ORS 62.610 to 62.635:

(1) "Business entity" means any of the following for-profit entities:

(a) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

(b) A corporation organized under ORS chapter 60, predecessor law or comparable law of another jurisdiction;

(c) A cooperative organized under this chapter, predecessor law or comparable law of another jurisdiction;

(d) A limited liability company organized under ORS chapter 63 or comparable law of another jurisdiction;

(f) A limited partnership organized under ORS chapter 70, predecessor law or comparable law of another jurisdiction.

(2) "Organizational document" means the following for an Oregon business entity or, for a foreign business entity, a document equivalent to the following:

(a) In the case of a corporation, professional corporation or cooperative, articles of incorporation;

(b) In the case of a limited liability company, articles of organization;

(c) In the case of a partnership, a partnership agreement and, for a limited liability partnership, its registration; and

(d) In the case of a limited partnership, a certificate of limited partnership.

(3) "Owner" means a:

(a) Shareholder of a corporation or of a professional corporation;

(b) Member or shareholder of a cooperative;

(c) Member of a limited liability company;

(d) Partner of a partnership; and

(e) General partner or limited partner of a limited partnership.

SECTION 19. Sections 20 to 25 of this 1999 Act are added to and made a part of ORS 62.610 to 62.635.

SECTION 20. Conversion. (1) A business entity other than a cooperative may be converted to a cooperative, and a cooperative may be converted to another business entity, pursuant to this section, by adopting a plan of conversion, if conversion is permitted by the statutes governing the other business entity.

(2) The plan of conversion shall set forth:

(a) The name and type of the business entity prior to conversion;

(b) The name and type of the business entity after conversion;

(c) The terms and conditions of the conversion;

(d) The manner and basis of converting the ownership interests of each owner into ownership interests or obligations of the surviving business entity or any other business entity, or into cash or other property in whole or in part; and

(e) Any additional information required in the organizational document of the converted business entity by the statutes governing that type of business entity.

(3) The plan of conversion may set forth other provisions relating to the conversion.

SECTION 21. Action on plan of conversion. (1) A plan of conversion shall be approved by the business entity as follows:

(a) In the case of a cooperative, in the manner provided in section 25 (1)(a) of this 1999 Act for mergers; and

(b) In the case of a business entity other than a cooperative, as provided by the statutes governing that business entity.

(2) After a conversion is approved, and at any time before articles of conversion are filed, the planned conversion may be abandoned, subject to any contractual rights:

(a) By a cooperative, without further action by the members or shareholders, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner determined by the board of directors.

(b) By another business entity that planned to convert to a cooperative, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner permitted by the statutes governing that business entity.

SECTION 22. Articles of conversion. (1) After conversion is approved by the owners, the business entity shall file articles of conversion, which shall state the name and type of business entity prior to conversion and the name and type of business entity after conversion, and shall include the plan of conversion.

(2) The conversion takes effect at the later of the date and time determined pursuant to ORS 62.035 or the date and time determined pursuant to the statutes governing the business entity that is not a cooperative.

SECTION 23. Effect of conversion; entity existence continues. (1) When a conversion to or from a cooperative pursuant to section 20 of this 1999 Act takes effect:

(a) The business entity continues its existence despite the conversion;

(b) Title to all real estate and other property owned by the converting business entity is vested in the converted business entity without reversion or impairment;

(c) All obligations of the converting business entity including, without limitation, contractual, tort, statutory and administrative obligations are obligations of the converted business entity;

(f) Liability of an owner for obligations of the business entity shall be determined:

(A) As to liabilities incurred by the business entity prior to conversion, according to the status of the owner prior to conversion; and

(B) As to liabilities incurred by the business entity after conversion, according to the status of the owner after conversion, except as provided in paragraph (g) of this subsection;

(h) The registration of an assumed business name of a business entity under ORS chapter 648 shall continue as the assumed business name of the converted business entity.

(2) Owners of the business entity that converted are entitled to the rights provided in the plan of conversion and, in the case of business entities other than cooperatives, to the rights provided in the statutes applicable to the business entity prior to conversion, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

SECTION 24. Merger. (1) One or more cooperatives may merge with one or more business entities, pursuant to this section, if each business entity that is a party to the merger approves a plan of merger and if the merger is permitted by the statutes governing each business entity. The business entity that survives may be a cooperative or another business entity.

(2) The plan of merger shall set forth:

(a) The name and type of each business entity planning to merge;

(b) The name and type of the business entity that will survive;

(c) The terms and conditions of the merger;

(e) If any party is a business entity other than a cooperative, any additional information required for a merger by the statutes governing that type of business entity.

(3) The plan of merger may set forth:

(a) Amendments to the articles of incorporation of a cooperative, if the cooperative is the surviving business entity; and

(b) Other provisions relating to the merger.

SECTION 25. Action on plan of merger. (1) A plan of merger shall be approved by each business entity that is a party to the merger, as follows:

(a) In the case of a cooperative, the board shall by resolution approve the plan and direct that the plan be submitted to a vote at an annual or a special meeting of members. Written notice shall be given to each member in the manner provided in this chapter for meetings of members, and approval of the plan shall be by affirmative vote of a majority of the member votes cast thereon. The articles may permit shareholders to vote on approval of the plan, and may fix the proportion of shareholder votes required for approval. If the articles permit shareholders to vote on such a plan, written notice shall be given to each shareholder entitled to vote thereon in the manner and at the time provided for notice to members.

(b) In the case of a business entity other than a cooperative, as provided by the statutes governing that business entity.

(2) After a merger is authorized, and at any time before articles of merger are filed, the planned merger may be abandoned, subject to any contractual rights:

(a) By the cooperative, without further action by the members or shareholders, in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner determined by the board of directors.

(b) By a party to the merger that is not a cooperative, in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner permitted by the statutes governing that business entity.

SECTION 26. ORS 62.615 is amended to read:

62.615. [Upon adoption of the plan of merger, the articles of merger shall set forth:]

[(1) The plan of merger.]

[(2) The date of adoption of the plan.]

[(3) As to each cooperative, the numbers of member votes cast for and against the plan.]

[(4) As to each cooperative, if shareholders are authorized to vote on the plan, the number of shareholder votes entitled to be voted on the plan, the numbers of such shareholder votes cast for and against the plan and the number of such votes required by the articles for adoption thereof.]

(1) After a plan of merger is approved by each business entity that is a party to the merger, the surviving business entity shall deliver to the office of the Secretary of State, for filing, articles of merger setting forth:

(a) The plan of merger;

(b) The date of approval of the plan;

(c) A statement that the plan of merger was duly authorized and approved by each business entity that is a party to the merger in accordance with section 25 of this 1999 Act;

(d) As to each cooperative, the numbers of member votes cast for and against the plan; and

(e) As to each cooperative, if shareholders are authorized to vote on the plan, the number of shareholder votes entitled to be voted on the plan, the number of such shareholder votes cast for and against the plan and the number of such votes required by the articles for approval thereof.

(2) The merger takes effect on the later of the date and time determined pursuant to ORS 62.035 or the date and time determined pursuant to the statutes governing any party to the merger that is a business entity other than a cooperative.

SECTION 27. ORS 62.620 is amended to read:

62.620. [When the merger has been effected:]

[(1) The several cooperative parties to the plan of merger shall be a single cooperative, which shall be that cooperative designated in the plan of merger as the surviving cooperative.]

[(2) The separate existence of all cooperatives parties to the plan of merger, except the surviving cooperative, shall cease.]

[(3) The surviving cooperative shall thereupon and thereafter possess all the rights, privileges, immunities and franchises, as well of a public as of a private nature, of each of the merging cooperatives; and all property, real, personal and mixed, and all debts due on whatever account, including subscriptions to shares, and all other choses in action, and all and every other interest, of or belonging to or due to each of the cooperatives so merged, shall be deemed to be transferred to and vested in such single cooperative without further act or deed; and the title to any real estate, or any interest therein, vested in any of such cooperatives shall not revert or be in any way impaired by reason of the merger.]

[(4) The surviving cooperative is thenceforth responsible and liable for all the liabilities and obligations of each of the cooperatives so merged and any claim existing or action or proceeding pending by or against any of such cooperatives may be prosecuted as if the merger had not taken place, or the surviving cooperative may be substituted in its place. Neither the rights of creditors nor any liens upon the property of any such cooperative are impaired by the merger.]

[(5) The articles of the surviving cooperative shall be deemed to be amended to the extent, if any, that changes in its articles are stated in the plan of merger.]

(1) When a merger involving a cooperative takes effect:

(a) Every other business entity that is a party to the merger merges into the surviving business entity, and the separate existence of every other party ceases;

(b) Title to all real estate and other property owned by each of the business entities that were parties to the merger is vested in the surviving business entity without reversion or impairment;

(d) An action or proceeding pending against each of the business entities that were parties to the merger may be continued as if the merger had not occurred, or the surviving business entity may be substituted as a party to the action or proceeding;

(e) If a cooperative is the surviving business entity, its articles of incorporation are amended to the extent provided in the plan of merger;

(f) The shares or other ownership interests of each shareholder or other owner that are to be converted into shares or other ownership interests or obligations of the surviving business entity or any other business entity, or into cash or other property, are converted as provided in the plan of merger;

(g) Liability of an owner for obligations of a business entity that is a party to the merger shall be determined:

(A) As to obligations incurred by the business entity prior to merger, according to the status of the owner prior to merger; and

(B) As to obligations incurred by the business entity after merger, according to the status of the owner after merger, except as provided in paragraph (h) of this subsection;

(i) The registration of an assumed business name of a business entity under ORS chapter 648 shall continue as the assumed business name of the surviving business entity.

(2) Owners of the business entities that merged are entitled to the rights provided in the plan of merger and, in the case of owners of business entities other than cooperatives, the rights provided in the statutes applicable to that business entity, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

LIMITED LIABILITY COMPANIES

(ORS Chapter 63)

SECTION 28. ORS 63.001 is amended to read:

63.001. As used in this chapter:

(1) "Anniversary" means that day each year exactly one or more years after:

(a) The date of filing by the Secretary of State of the articles of organization in the case of a domestic limited liability company.

(b) The date of filing by the Secretary of State of an application for authority to transact business in the case of a foreign limited liability company.

(2) "Articles of organization" means the document described in ORS 63.047 for the purpose of forming a limited liability company, including articles of organization as they may be amended or restated, articles of conversion and articles of merger.

(3) "Bankruptcy" means:

(a) Assignment by a member for the benefit of creditors;

(b) Commencement of a voluntary bankruptcy case by a member;

(d) Filing by a member of a petition or answer seeking for the member any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or rule;

(e) Filing by a member of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding of this nature;

(f) Seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator of the member or of all or any substantial part of the member's properties;

(g) Commencement of an involuntary bankruptcy case against a member that has not been dismissed on or before the 120th day after the commencement of the case;

(h) Appointment, without the member's consent, of a trustee, receiver or liquidator either of the member or of all or any substantial part of the member's properties that is not vacated or stayed on or before the 90th day after appointment; or

(i) Appointment described in paragraph (h) of this subsection that is not vacated on or before the 90th day after expiration of the stay under paragraph (h) of this subsection.

(4) "Contribution" means anything of value which a person contributes to the limited liability company as a prerequisite for or in connection with membership including cash, property or services rendered or a promissory note or other binding obligation to contribute cash or property or to perform services.

(5) "Corporation" or "domestic corporation" means a corporation for profit incorporated under ORS chapter 60.

(6) "Distribution" means a direct or indirect transfer of money or other property, except of a limited liability company's own interests, or incurrence of indebtedness by a limited liability company to or for the benefit of its members in respect of any of its member's interests. A distribution may be in the form of a declaration or payment of profits, a purchase, retirement or other acquisition of interests, a distribution of indebtedness, or otherwise.

(7) "Entity" includes a domestic or foreign limited liability company, corporation, foreign corporation, domestic or foreign nonprofit corporation, domestic or foreign cooperative corporation, profit or nonprofit unincorporated association, business trust, estate, domestic or foreign general or limited partnership, trust, two or more persons having a joint or common economic interest, any state, the United States or any foreign government.

(8) "Foreign corporation" means a corporation for profit incorporated under a law other than the law of this state.

(9) "Foreign limited liability company" means an entity that is an unincorporated association that is organized under the laws of a state other than of this state or under the laws of any foreign country and that is organized under a statute pursuant to which an association may be formed that affords to each of its members limited liability with respect to the liabilities of the entity.

(10) "Foreign limited partnership" means a limited partnership formed under the laws of any jurisdiction other than this state and having as partners one or more general partners and one or more limited partners.

(11) "Incompetency" means the entry of a judgment by a court of competent jurisdiction adjudicating the member incompetent to manage the member's person or estate.

(12) "Individual" means a natural person.

(13) "Limited liability company" or "domestic limited liability company" means an entity that is an unincorporated association having one or more members that is organized under this chapter.

(14) "Limited partnership" or "domestic limited partnership" means a partnership formed by two or more persons under ORS chapter 70 and having one or more general partners and one or more limited partners.

(15) "Manager" or "managers" means a person or persons designated by the members of a limited liability company in accordance with ORS 63.135 to manage the limited liability company's business and affairs.

(16) "Member" or "members" means a person or persons with both an ownership interest in a limited liability company and all the rights and obligations of a member specified under this chapter. "Member" does not include an assignee of an ownership interest who has not also acquired the voting and other rights appurtenant to membership.

(17) "Membership interest" or "interest" means a member's collective rights in a limited liability company, including the member's share of profits and losses of the limited liability company, the right to receive distributions of the limited liability company's assets and any right to vote or participate in management.

(18) "Office," when used to refer to the administrative unit directed by the Secretary of State, means the office of the Secretary of State.

(19) "Operating agreement" means any valid agreement, written or oral, of the member or members as to the affairs of a limited liability company and the conduct of its business.

(20) "Organizer" means one of the signers of the initial articles of organization.

(21) "Party" includes an individual who was, is or is threatened to be made a named defendant or respondent in a proceeding.

(22) "Person" means an individual or entity.

(23) "Proceeding" means any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigatory and whether formal or informal.

(24) "State," when referring to a part of the United States, includes a state, commonwealth, territory or insular possession of the United States and its agencies and governmental subdivisions.

(25) "United States" includes a district, authority, bureau, commission, department or any other agency of the United States.

SECTION 29. ORS 63.007 is amended to read:

63.007. (1) The Secretary of State shall collect the following fees for the documents delivered for filing:

___________________________________________________________________

Document Fee

(a) Articles of organization $ 40

(b) Application for reserved

name $ 10

name $ 100

(d) Application of a domestic limited

liability company for reinstatement

following administrative

dissolution $ 30

(e) Application for registration

of a foreign limited liability

company $ 440

(f) Annual report of domestic limited

liability company $ 30

(g) Annual report of a foreign limited

liability company $ 220

(h) Certificate of existence or

authorization $ 10

(i) Application of a foreign limited

liability company for reinstate-

ment following administrative

revocation $ 50

(j) Amendments to articles of

organization $ 10

(k) Restated articles of

organization $ 10

(L) [Mergers] Articles of merger $ 10

(m) Dissolutions and withdrawals $ 10

(n) Change of registered agent

or office $ 10

(o) Registered agent resignations $ 10

(p) Amendment to annual report $ 10

(q) Articles of conversion $ 10

___________________________________________________________________

(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under ORS 63.121 and 63.731.

(3) The Secretary of State by rule may establish fees in addition to those provided for in subsections (1) and (2) of this section for:

(a) Copying any public record maintained by the office and relating to a domestic or foreign limited liability company and for certifying the copy.

(b) Certifying to other facts of record pursuant to ORS 63.027.

SECTION 29a. If House Bill 2212 becomes law, section 11, chapter 652, Oregon Laws 1999 (Enrolled House Bill 2212) (amending ORS 63.007), is repealed and ORS 63.007, as amended by section 29 of this 1999 Act, is amended to read:

63.007. [(1) The Secretary of State shall collect the following fees for the documents delivered for filing:]

[_________________________________________________________________]

Document Fee

(a) Articles of organization $ 40

(b) Application for reserved

name $ 10

(c) Application for registered

name $ 100

(d) Application of a domestic limited

liability company for reinstatement

following administrative

dissolution $ 30

(e) Application for registration

of a foreign limited liability

company $ 440

(f) Annual report of domestic limited

liability company $ 30

(g) Annual report of a foreign limited

liability company $ 220

(h) Certificate of existence or

authorization $ 10

(i) Application of a foreign limited

liability company for reinstate-

ment following administrative

revocation $ 50

(j) Amendments to articles of

organization $ 10

(k) Restated articles of

organization $ 10

(L) Articles of merger $ 10

(m) Dissolutions and withdrawals $ 10

(n) Change of registered agent

or office $ 10

(o) Registered agent resignations $ 10

(p) Amendment to annual report $ 10

(q) Articles of conversion $ 10

[_________________________________________________________________]

[(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under ORS 63.121 and 63.731.]

[(3) The Secretary of State by rule may establish fees in addition to those provided for in subsections (1) and (2) of this section for:]

[(a) Copying any public record maintained by the office and relating to a domestic or foreign limited liability company and for certifying the copy.]

[(b) Certifying to other facts of record pursuant to ORS 63.027.] The Secretary of State shall collect the fees described in ORS 56.140 for each document delivered for filing under this chapter and for process served on the secretary under this chapter. The secretary may collect the fees described in ORS 56.140 for copying any public record under this chapter, certifying the copy or certifying to other facts of record under this chapter.

SECTION 29b. The amendments to ORS 63.007 by section 29a of this 1999 Act become operative July 1, 2001.

SECTION 30. Sections 31 to 35 of this 1999 Act are added to and made a part of ORS 63.481 to 63.497.

SECTION 31. Definitions. As used in ORS 63.481 to 63.497:

(1) "Business entity" means:

(a) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

(b) A corporation organized under ORS chapter 60, predecessor law or comparable law of another jurisdiction;

(c) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction;

(d) A limited liability company organized under this chapter or comparable law of another jurisdiction;

(f) A limited partnership organized under ORS chapter 70, predecessor law or comparable law of another jurisdiction.

(2) "Organizational document" means the following for an Oregon business entity or, for a foreign business entity, a document equivalent to the following:

(a) In the case of a corporation, professional corporation or cooperative, articles of incorporation;

(b) In the case of a limited liability company, articles of organization;

(c) In the case of a partnership, a partnership agreement and, for a limited liability partnership, its registration; and

(d) In the case of a limited partnership, a certificate of limited partnership.

(3) "Owner" means a:

(a) Shareholder of a corporation or of a professional corporation;

(b) Member or shareholder of a cooperative;

(c) Member of a limited liability company;

(d) Partner of a partnership; and

(e) General partner or limited partner of a limited partnership.

SECTION 32. Conversion. (1) A business entity other than a limited liability company may be converted to a limited liability company, and a limited liability company may be converted to another business entity, pursuant to this section, by adopting a plan of conversion, if conversion is permitted by the statutes governing the other business entity.

(2) The plan of conversion shall set forth:

(a) The name and type of the business entity prior to conversion;

(b) The name and type of the business entity after conversion;

(c) The terms and conditions of the conversion;

(e) Any additional information required in the organizational document of the converted business entity by the statutes governing that type of business entity.

(3) The plan of conversion may set forth other provisions relating to the conversion.

SECTION 33. Action on plan of conversion. (1) A plan of conversion shall be approved as follows:

(a) In the case of a limited liability company, by a majority vote of its members, or by a greater vote if required by its articles of organization or any operating agreement.

(b) In the case of a business entity other than a limited liability company, as provided by the statutes governing that business entity.

(2) After a conversion is approved, and at any time before articles of conversion are filed, the planned conversion may be abandoned, subject to any contractual rights:

(a) By a limited liability company, without further action by the members, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner determined by the managers.

(b) By a converting business entity that is not a limited liability company, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner permitted by the statutes governing that business entity.

SECTION 34. Articles of conversion. (1) After conversion is approved by the owners, the business entity shall file articles of conversion, which shall state the name and type of business entity prior to conversion and the name and type of business entity after conversion, and shall include the plan of conversion.

(2) The conversion takes effect at the later of the date and time determined pursuant to ORS 63.011 or the date and time determined pursuant to the statutes governing the business entity that is not a limited liability company.

SECTION 35. Effect of conversion; entity existence continues. (1) When a conversion to or from a limited liability company pursuant to section 32 of this 1999 Act takes effect:

(a) The business entity continues its existence despite the conversion;

(b) Title to all real estate and other property owned by the converting business entity is vested in the converted business entity without reversion or impairment;

(c) All obligations of the converting business entity including, without limitation, contractual, tort, statutory and administrative obligations are obligations of the converted business entity;

(f) Liability of an owner for obligations of the business entity shall be determined:

(A) As to liabilities incurred by the business entity prior to conversion, according to laws applicable prior to conversion; and

(B) As to liabilities incurred by the business entity after conversion, according to laws applicable after conversion, except as provided in paragraph (g) of this subsection;

(h) The registration of an assumed business name of a business entity under ORS chapter 648 shall continue as the assumed business name of the converted business entity.

(2) Owners of the business entity that converted are entitled to:

(a) In the case of limited liability companies, only the rights provided in the plan of conversion; and

(b) In the case of owners of business entities other than limited liability companies, the rights provided in the plan of conversion and in the statutes applicable to the business entity prior to conversion, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

SECTION 36. ORS 63.481 is amended to read:

63.481. [(1) One or more limited liability companies may merge into another limited liability company if each limited liability company that is a party to the merger approves a plan of merger.]

[(2) The plan of merger must set forth:]

[(a) The name of each limited liability company planning to merge and the name of the surviving limited liability company into which each other limited liability company plans to merge;]

[(b) The terms and conditions of the merger; and]

[(c) The manner and basis of converting the membership interests of each limited liability company into membership interests or obligations of the surviving or any other limited liability company, or into cash or other property in whole or part.]

[(3) The plan of merger may set forth:]

[(a) Amendments to the articles of organization of the surviving limited liability company; and]

[(b) Other provisions relating to the merger.]

(1) One or more limited liability companies may merge with one or more business entities, pursuant to this section, if each business entity that is a party to the merger approves a plan of merger and if the merger is permitted by the statutes governing each business entity. The business entity that survives may be a limited liability company or another business entity.

(2) The plan of merger shall set forth:

(a) The name and type of each business entity planning to merge;

(b) The name and type of the business entity that will survive;

(c) The terms and conditions of the merger;

(e) If any party is a business entity other than a limited liability company, any additional information required for a merger by the statutes governing that business entity.

(3) The plan of merger may set forth:

(a) Amendments to the articles of organization of a limited liability company, if that company is the surviving business entity; and

(b) Other provisions relating to the merger.

SECTION 37. ORS 63.487 is amended to read:

63.487. [(1) Unless the articles of organization or any operating agreement requires a greater vote, a plan of merger shall be approved by a limited liability company by a majority vote of its members.]

[(2) After a merger is authorized, and at any time before articles of merger are filed, the planned merger may be abandoned, subject to any contractual rights, without further member action, in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner determined by the managers.]

(1) A plan of merger shall be approved by each business entity that is a party to the merger, as follows:

(a) In the case of a limited liability company, by a majority vote of its members, or by a greater vote if required by its articles of organization or any operating agreement.

(b) In the case of a business entity other than a limited liability company, as provided by the statutes governing that business entity.

(2) After a merger is authorized, and at any time before articles of merger are filed, the planned merger may be abandoned, subject to any contractual rights:

(a) By the limited liability company, without further action by the members, in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner determined by the managers.

(b) By a party to the merger that is not a limited liability company, in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner permitted by the statutes governing that business entity.

SECTION 38. ORS 63.494 is amended to read:

63.494. [(1) After a plan of merger is approved by each limited liability company that is a party to the merger, the surviving limited liability company shall deliver to the office for filing articles of merger setting forth:]

[(a) The plan of merger; and]

[(b) A statement that the plan of merger was duly authorized and approved in accordance with ORS 63.481 and 63.487.]

[(2) Unless a delayed effective date is specified, a merger takes effect when the articles of merger are filed.]

(a) The plan of merger; and

(b) A statement that the plan of merger was duly authorized and approved by each business entity that is a party to the merger in accordance with ORS 63.487.

(2) The merger takes effect on the later of the date and time determined pursuant to ORS 63.011 or the date and time determined pursuant to the statutes governing any party to the merger that is a business entity other than a limited liability company.

SECTION 39. ORS 63.497 is amended to read:

63.497. [When a merger takes effect:]

[(1) Every other limited liability company party to the merger merges into the surviving limited liability company and the separate existence of every limited liability company except the surviving company ceases;]

[(2) The title to all real estate and other property owned by each limited liability company party to the merger is vested in the surviving limited liability company without reversion or impairment;]

[(3) The surviving limited liability company has all liabilities of each limited liability company party to the merger;]

[(4) A proceeding pending against any limited liability company party to the merger may be continued as if the merger did not occur or the surviving limited liability company may be substituted in the proceeding for the limited liability company whose existence ceased;]

[(5) The articles of organization of the surviving limited liability company are amended to the extent provided in the plan of merger; and]

[(6) The membership interests of each limited liability company party to the merger that are to be converted into membership interests or obligations of the surviving or any other limited liability company or into cash or other property are converted and the former holders of the membership interests are entitled only to the rights provided in the articles of merger.]

(1) When a merger involving a limited liability company takes effect:

(a) Every other business entity that is a party to the merger merges into the surviving business entity, and the separate existence of every other party ceases;

(b) Title to all real estate and other property owned by each of the business entities that were parties to the merger is vested in the surviving business entity without reversion or impairment;

(e) If a limited liability company is the surviving business entity, its articles of organization are amended to the extent provided in the plan of merger;

(f) The ownership interests of each owner that are to be converted into ownership interests or obligations of the surviving business entity or any other business entity, or into cash or other property, are converted as provided in the plan of merger;

(g) Liability of an owner for obligations of a business entity that is a party to the merger shall be determined:

(A) As to liabilities incurred by the business entity prior to merger, according to the laws applicable prior to merger; and

(B) As to liabilities incurred by the business entity after merger, according to the laws applicable after merger, except as provided in paragraph (h) of this subsection;

(h) If prior to merger an owner of a business entity was a partner of a partnership or general partner of a limited partnership and was personally liable for the business entity's liabilities, and after merger is an owner normally protected from personal liability, then such owner shall continue to be personally liable for the business entity's liabilities incurred during the 12 months following merger, if the other party or parties to the transaction reasonably believed that the owner would be personally liable and had not received notice of the merger; and

(i) The registration of an assumed business name of a business entity under ORS chapter 648 shall not be affected by the merger.

(2) Owners of the business entities that are parties to the merger are entitled to:

(a) In the case of members of limited liability companies, only the rights provided in the articles of merger; and

(b) In the case of owners of business entities other than limited liability companies, the rights provided in the statutes applicable to the business entity prior to merger, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

PARTNERSHIPS AND LIMITED LIABILITY PARTNERSHIPS

(ORS Chapter 67)

SECTION 40. ORS 67.340 is amended to read:

67.340. As used in ORS 67.340 to 67.370:

(1) "Business entity" means:

(a) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

(b) A corporation organized under ORS chapter 60, predecessor law or comparable law of another jurisdiction;

(c) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction;

(d) A limited liability company organized under ORS chapter 63 or comparable law of another jurisdiction;

(e) A partnership organized in Oregon after January 1, 1998, or that is registered as a limited liability partnership, or that has elected to be governed by this chapter, and a partnership governed by law of another jurisdiction that expressly provides for conversions and mergers; and

(f) A limited partnership organized under ORS chapter 70, predecessor law or comparable law of another jurisdiction.

[(1)] (2) "General partner" means a partner in a partnership and a general partner in a limited partnership.

[(2)] (3) "Limited partner" means a limited partner in a limited partnership.

[(3)] (4) "Limited partnership" means a limited partnership created under ORS chapter 70, predecessor law or comparable law of another jurisdiction.

(5) "Organizational document" means the following for an Oregon business entity or, for a foreign business entity, a document equivalent to the following:

(a) In the case of a corporation, professional corporation or cooperative, articles of incorporation;

(b) In the case of a limited liability company, articles of organization;

(c) In the case of a partnership, a partnership agreement and, for a limited liability partnership, its registration; and

(d) In the case of a limited partnership, a certificate of limited partnership.

(6) "Owner" means a:

(a) Shareholder of a corporation or of a professional corporation;

(b) Member or shareholder of a cooperative;

(c) Member of a limited liability company;

(d) Partner of a partnership; and

(e) Partner of a limited partnership.

[(4)] (7) "Partner" includes both a general partner and a limited partner.

SECTION 41. Sections 42 to 45, 47 and 48 of this 1999 Act are added to and made a part of ORS 67.340 to 67.370.

SECTION 42. Conversion. (1) A business entity other than a partnership may be converted to a partnership, and a partnership may be converted to another business entity, pursuant to this section, by adopting a plan of conversion, if conversion is permitted by the statutes governing the other business entity.

(2) The plan of conversion shall set forth:

(a) The name and type of the business entity prior to conversion;

(b) The name and type of the business entity after conversion;

(c) The terms and conditions of the conversion;

(e) If the business entity after conversion is not a partnership, any additional information required in the organizational document of the converted business entity by the statutes governing that type of business entity.

(3) The plan of conversion may set forth other provisions relating to the conversion.

SECTION 43. Action on plan of conversion. (1) A plan of conversion shall be approved by each business entity that is a party to the conversion, as follows:

(a) In the case of a partnership, by all of the partners, unless a lesser vote is provided in the partnership agreement; and

(b) In the case of a business entity other than a partnership, as provided by the statutes governing that business entity.

(2) After a conversion is approved, and at any time before articles of conversion are filed, the planned conversion may be abandoned, subject to any contractual rights:

(a) By a partnership that planned to convert to another business entity, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, by a vote of the partners; and

(b) By a business entity other than a partnership that planned to convert to a partnership, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner permitted by the statutes governing that business entity.

SECTION 44. Articles of conversion. (1) After conversion is approved by the owners, the business entity shall file articles of conversion, which shall state the name and type of business entity prior to conversion, the name and type of business entity after conversion and the names and addresses of at least two partners, and shall include the plan of conversion.

(2) The conversion takes effect at the later of the date and time determined pursuant to ORS 67.530 or the date and time determined pursuant to the statutes governing the business entity that is not a partnership.

SECTION 45. Effect of conversion; entity existence continues. (1) When a conversion to or from a partnership pursuant to section 42 of this 1999 Act takes effect:

(a) The business entity continues its existence despite the conversion;

(b) Title to all real estate and other property owned by the converting business entity is vested in the converted business entity without reversion or impairment;

(f) Liability of an owner for obligations of the business entity, including, without limitation, contractual, tort, statutory and administrative obligations, shall be determined:

(A) As to obligations incurred prior to conversion, according to the laws applicable prior to conversion, except as provided in paragraph (g) of this subsection; and

(B) As to obligations incurred after conversion, according to the laws applicable after conversion, except as provided in paragraph (h) of this subsection;

(g) If the converting business entity is a partnership other than a limited liability partnership and its obligations incurred before the conversion are not satisfied by the converted business entity, the persons who were partners of the converting business entity immediately before the effective date of the conversion shall contribute the amount necessary to satisfy the converting business entity's obligations in the manner provided in ORS 67.315 as if the converting business entity were dissolved;

(h) If prior to conversion an owner of a business entity was a partner of a partnership or general partner of a limited partnership or a foreign limited partnership, and was personally liable for the business entity's obligations, and after conversion is an owner normally protected from personal liability, then such owner shall continue to be personally liable for the business entity's obligations incurred during the 12 months following conversion, if the other party or parties to the transaction reasonably believed that the owner would be personally liable and had not received notice of the conversion; and

(i) The registration of an assumed business name of a business entity under ORS chapter 648 shall continue as the assumed business name of the converted business entity.

(2) Owners of the business entity that converted are entitled to the rights provided in the plan of conversion and:

(a) Any partner who did not vote in favor of the conversion is deemed to have dissociated from the partnership effective immediately before the conversion unless, within 60 days after the later of the effective date of the conversion or the date the partner receives notice of the conversion, the partner notifies the partnership of the partner's desire not to dissociate. A dissociation under this paragraph is not a wrongful withdrawal; and

(b) In the case of owners of business entities other than partnerships, the rights provided in the statutes applicable to the business entity prior to conversion, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

SECTION 46. ORS 67.360 is amended to read:

67.360. [(1) Pursuant to a plan of merger approved as provided in subsection (3) of this section, a partnership may be merged with one or more partnerships or limited partnerships.]

[(2) The plan of merger may include:]

[(a) The name of each partnership or limited partnership that is a party to the merger;]

[(b) The name of the surviving entity into which the other partnerships or limited partnerships will merge;]

[(c) Whether the surviving entity is a partnership or a limited partnership and the status of each partner;]

[(d) The terms and conditions of the merger; and]

[(e) The manner and basis of converting the interests of each party to the merger into interests or obligations of the surviving entity or into money or other property in whole or in part.]

[(3) The plan of merger must be approved:]

[(a) In the case of a partnership that is a party to the merger, by all the partners or a number or percentage specified for merger in the partnership agreement; and]

[(b) In the case of a limited partnership that is a party to the merger, by the vote required for approval of a merger by the law of the state or foreign jurisdiction in which the limited partnership is organized and, in the absence of such a specifically applicable law, by all the partners, unless a lesser vote is provided for in the limited partnership agreement.]

[(4) If a limited partnership is a party to a merger and if a partnership is the surviving entity, a limited partner who did not vote in favor of the merger is considered to be a partner who has withdrawn from the limited partnership effective immediately before the effective date of the merger unless, within 60 days after the later of the effective date of the merger or the date the partner receives notice of the merger, the partner notifies the partnership of the partner's desire not to withdraw. A withdrawal under this subsection is not a wrongful withdrawal.]

[(5) After a plan of merger is approved and before the merger takes effect, the plan may be amended or abandoned as provided in the plan.]

[(6) The merger takes effect on the later of:]

[(a) The approval of the plan of merger by all parties to the merger, as provided in subsection (3) of this section;]

[(b) The filing of all documents required by law to be filed as a condition to the effectiveness of the merger; or]

[(c) Any effective date specified in the plan of merger.]

(1) One or more partnerships may merge with one or more business entities, pursuant to this section, if each business entity that is a party to the merger approves a plan of merger and if the merger is permitted by the statutes governing each business entity. The business entity that survives may be a partnership or another business entity.

(2) The plan of merger shall set forth:

(a) The name and type of each business entity planning to merge;

(b) The name and type of the business entity that will survive;

(c) The terms and conditions of the merger;

(e) If any party is a business entity other than a partnership, any additional information required for a merger by the statutes governing that business entity.

(3) The plan of merger may set forth:

(a) Amendments to the partnership agreement of a partnership and, if applicable, its registration as a limited liability partnership if the partnership is the surviving business entity; and

(b) Other provisions relating to the merger.

SECTION 47. Action on plan of merger. (1) A plan of merger shall be approved by each business entity that is a party to the merger, as follows:

(a) In the case of a partnership, by unanimous vote of the partners, or by the number or percentage specified for merger in its partnership agreement; and

(b) In the case of a business entity other than a partnership, as provided by the statutes governing that business entity.

(2) After a merger is authorized, and at any time before articles of merger are filed, the planned merger may be abandoned, subject to any contractual rights:

(a) By the partnership, without further action by the partners, in accordance with the procedure set forth in the plan of merger or the partnership agreement; and

(b) By a party to the merger that is not a partnership, in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner permitted by the statutes governing that business entity.

SECTION 48. Articles of merger. (1) After a plan of merger is approved by each business entity that is a party to the merger, the surviving business entity shall deliver to the office of the Secretary of State, for filing, articles of merger, except that no filing is required if all of the parties to the merger are partnerships that have not registered as limited liability partnerships. The articles of merger shall set forth:

(a) The plan of merger; and

(b) A statement that the plan of merger was duly authorized and approved by each business entity that is a party to the merger in accordance with ORS 67.360.

(2) The merger takes effect on the later of the date and time determined pursuant to ORS 67.530 or the date and time determined pursuant to the statutes governing any party to the merger that is a business entity other than a partnership.

SECTION 49. ORS 67.365 is amended to read:

67.365. [(1) When a merger takes effect:]

[(a) The separate existence of every partnership or limited partnership that is a party to the merger, other than the surviving entity, ceases;]

[(b) All property owned by each of the merged partnerships or limited partnerships vests in the surviving entity;]

[(c) All obligations of every partnership or limited partnership that is a party to the merger become the obligations of the surviving entity; and]

[(d) An action or proceeding pending against a partnership or limited partnership that is a party to the merger may be continued as if the merger had not occurred, or the surviving entity may be substituted as a party to the action or proceeding.]

[(2) A partner of the surviving partnership or limited partnership is liable for:]

[(a) All obligations of a party to the merger for which the partner was personally liable before the merger;]

[(b) All other obligations of the surviving entity incurred before the merger by a party to the merger, but those obligations may be satisfied only out of property of the entity; and]

[(c) Except as otherwise provided in ORS 67.105, all obligations of the surviving entity incurred after the merger takes effect, but those obligations may be satisfied only out of property of the entity if the partner is a limited partner.]

[(3) If the obligations incurred before the merger by a party to the merger are not satisfied out of the property of the surviving partnership or limited partnership, the general partners of that party immediately before the effective date of the merger shall contribute the amount necessary to satisfy that party's obligations to the surviving entity in the manner provided in ORS 67.315 or in the limited partnership statute of the jurisdiction in which the party was formed, as the case may be, as if the merged party were dissolved.]

[(4) A partner of a party to a merger who does not become a partner of the surviving partnership or limited partnership is dissociated from the entity of which that partner was a partner as of the date the merger takes effect. The surviving entity shall cause the partner's interest in the entity to be purchased under ORS 67.250 or another statute specifically applicable to that partner's interest with respect to a merger. The surviving entity is bound under ORS 67.255 by an act of a general partner dissociated under this subsection, and the partner is liable under ORS 67.260 for transactions entered into by the surviving entity after the merger takes effect.]

[(5) When a limited liability partnership is a party to the merger, then:]

[(a) If a limited partnership is the surviving entity, the registration of the limited liability partnership will be deemed to be canceled as of the date the merger takes effect and the limited liability partnership shall file a cancellation notice in accordance with ORS 67.595 within 30 days after the date the merger takes effect; and]

[(b) If the limited liability partnership or another partnership is the surviving entity, the registration of the limited liability partnership will continue as of the date the merger takes effect and, within 30 days after the date the merger takes effect, the limited liability partnership shall amend the registration in accordance with ORS 67.610 (4) if such amendment is necessary to reflect the name of the surviving entity.]

[(6) After the merger is approved by the partners, a limited partnership that is a party to a merger and is not the surviving entity shall cancel its certificate of limited partnership. The certificate of cancellation shall state that the limited partnership has been merged with a partnership or limited partnership and shall state the name of the surviving entity.]

(1) When a merger involving a partnership takes effect:

(a) Every other business entity that is a party to the merger merges into the surviving business entity, and the separate existence of every other party ceases;

(b) The title to all real estate and other property owned by each of the business entities that were parties to the merger is vested in the surviving business entity without reversion or impairment;

(e) If a partnership is the surviving business entity, its partnership agreement is amended to the extent provided in the plan of merger;

(f) The shares or other ownership interests of each partner or other owner that are to be converted into shares or other ownership interests or obligations of the surviving business entity or any other business entity, or into cash or other property, are converted as provided in the plan of merger;

(g) Liability of an owner for obligations of a business entity, including, without limitation, contractual, tort, statutory and administrative obligations, shall be determined:

(A) As to obligations incurred prior to merger, according to the laws applicable prior to merger, except as provided in paragraph (h) of this subsection; and

(B) As to obligations incurred after merger, according to the laws applicable after merger, except as provided in paragraph (i) of this subsection;

(h) If a party to the merger is a partnership other than a limited liability partnership and its obligations incurred before the merger are not satisfied by the surviving business entity, the persons who were partners of the merging partnership immediately before the effective date of the merger shall contribute the amount necessary to satisfy the merging business entity's obligation to the surviving business entity in the manner provided in ORS 67.315 as if the merged party were dissolved; and

(i) If prior to merger an owner of a business entity was a partner of a partnership or general partner of a limited partnership or a foreign limited partnership, and was personally liable for the business entity's obligations, and after merger is an owner normally protected from personal liability, then such owner shall continue to be personally liable for the business entity's obligations incurred during the 12 months following merger, if the other party or parties to the transaction reasonably believed that the owner would be personally liable and had not received notice of the merger.

(2) Owners of the business entity that merged are entitled to the rights provided in the plan of merger and:

(a) Any partner who did not vote in favor of the merger is deemed to have dissociated from the partnership effective immediately before the merger unless, within 60 days after the later of the effective date of the merger or the date the partner receives notice of the merger, the partner notifies the partnership of the partner's desire not to dissociate. A dissociation under this paragraph is not a wrongful withdrawal; and

(b) In the case of owners of business entities other than partnerships, the rights provided in the statutes applicable to the business entity prior to merger, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

(3) The registration of an assumed business name of a business entity under ORS chapter 648 shall not be affected by the merger.

SECTION 50. ORS 67.525 is amended to read:

67.525. (1) The Secretary of State shall collect the following fees for the documents delivered for filing:

___________________________________________________________________

Document Fee

(a) Application for registration

of a limited liability

partnership $ 40

(b) Application for authorization

of a foreign limited liability

partnership $ 440

liability partnership $ 20

(d) Annual report of a foreign

limited liability partnership $ 220

(e) Certificate of existence

or authorization $ 10

(f) Amendment or correction to

application for registration or

application for authorization $ 10

(g) Cancellation or withdrawal

notice $ 10

(h) Correction of annual report $ 10

(i) Application for reinstatement

of a limited liability

partnership following

administrative revocation $ 30

(j) Application for reinstatement

of a foreign limited liability

partnership following

revocation $ 50

(k) Articles of conversion $ 10

(L) Articles of merger $ 10

___________________________________________________________________

(2) The Secretary of State by rule may establish fees in addition to those provided in subsection (1) of this section for:

(a) Copying any public record maintained by the office of the Secretary of State and relating to a limited liability partnership or foreign limited liability partnership and for certifying the copy.

(b) Certifying to other facts of record pursuant to this chapter.

SECTION 50a. If House Bill 2212 becomes law, section 13, chapter 652, Oregon Laws 1999 (Enrolled House Bill 2212) (amending ORS 67.525), is repealed and ORS 67.525, as amended by section 50 of this 1999 Act, is amended to read:

67.525. [(1) The Secretary of State shall collect the following fees for the documents delivered for filing:]

[_________________________________________________________________]

Document Fee

(a) Application for registration

of a limited liability

partnership $ 40

(b) Application for authorization

of a foreign limited liability

partnership $ 440

(c) Annual report of a limited

liability partnership $ 20

(d) Annual report of a foreign

limited liability partnership $ 220

(e) Certificate of existence

or authorization $ 10

(f) Amendment or correction to

application for registration or

application for authorization $ 10

(g) Cancellation or withdrawal

notice $ 10

(h) Correction of annual report $ 10

(i) Application for reinstatement

of a limited liability

partnership following

administrative revocation $ 30

(j) Application for reinstatement

of a foreign limited liability

partnership following

revocation $ 50

(k) Articles of conversion $ 10

(L) Articles of merger $ 10

[_________________________________________________________________]

[(2) The Secretary of State by rule may establish fees in addition to those provided in subsection (1) of this section for:]

[(a) Copying any public record maintained by the office of the Secretary of State and relating to a limited liability partnership or foreign limited liability partnership and for certifying the copy.]

[(b) Certifying to other facts of record pursuant to this chapter.] The Secretary of State shall collect the fees described in ORS 56.140 for each document delivered for filing under this chapter and for process served on the secretary under this chapter. The secretary may collect the fees described in ORS 56.140 for copying any public record under this chapter, certifying the copy or certifying to other facts of record under this chapter.

SECTION 50b. The amendments to ORS 67.525 by section 50a of this 1999 Act become operative July 1, 2001.

SECTION 51. ORS 67.255 is amended to read:

67.255. (1) If a partner dissociates without resulting in a dissolution and winding up of the partnership business, the partnership, including a [surviving partnership] converted or surviving business entity under ORS 67.340 to 67.370, is bound by an act of the dissociated partner only if:

(a) The act occurs within six months after the date of dissociation;

(b) The act would have bound the partnership under ORS 67.090 before dissociation;

(c) At the time of entering into the transaction, the other party reasonably believed that the dissociated partner was then a partner and did not have notice of the partner's dissociation; and

(d) At the time of entering into the transaction, the dissociation had not been advertised in a newspaper of general circulation in the place, or in each place if more than one, at which the partnership business is regularly carried on.

(2) A dissociated partner is liable to the partnership for any damage caused to the partnership arising from an obligation incurred by the dissociated partner after dissociation for which the partnership is liable under subsection (1) of this section.

SECTION 52. ORS 67.260 is amended to read:

67.260. (1) A partner's dissociation does not of itself discharge the partner's liability for a partnership obligation incurred before dissociation. A dissociated partner is not liable for a partnership obligation incurred after dissociation, except as otherwise provided in subsection (2) of this section.

(2) A partner who dissociates without resulting in a dissolution and winding up of the partnership business is liable as a partner to the other party in a transaction entered into by the partnership, or a [surviving partnership] converted or surviving business entity under ORS 67.340 to 67.370, within six months after the partner's dissociation only if the partner is personally liable for the obligation under ORS 67.105 and, at the time of entering into the transaction:

(a) The other party reasonably believed that the dissociated partner was then a partner;

(b) The other party did not have notice of the partner's dissociation; and

(c) The dissociation had not been advertised in a newspaper of general circulation in the place, or in each place if more than one, at which the partnership business is regularly carried on.

(3) By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation.

(4) A dissociated partner is released from liability for a partnership obligation if a partnership creditor, with notice of the partner's dissociation but without the partner's consent, agrees to a material alteration in the nature or time of payment of a partnership obligation.

LIMITED PARTNERSHIPS

(ORS Chapter 70)

SECTION 53. ORS 70.005 is amended to read:

70.005. As used in this chapter:

(1) "Certificate of limited partnership" means the certificate referred to in ORS 70.075, and the certificate as amended, articles of conversion and articles of merger.

(2) "Contribution" means any cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services, that a partner contributes to a limited partnership in the capacity as a partner.

(3) "Event of withdrawal of a general partner" means an event that causes a person to cease to be a general partner as provided in ORS 70.180.

(4) "Foreign limited partnership" means a partnership formed under the laws of any jurisdiction other than this state and having as partners one or more general partners and one or more limited partners.

(5) "General partner" means a person who has been admitted to a limited partnership as a general partner in accordance with the partnership agreement and named in the certificate of limited partnership as a general partner.

(6) "Limited partner" means a person who has been admitted to a limited partnership as a limited partner in accordance with the partnership agreement.

(7) "Limited partnership" and "domestic limited partnership" mean a partnership formed by two or more persons under the laws of this state and having one or more general partners and one or more limited partners.

(8) "Partner" means a limited or general partner.

(9) "Partnership agreement" means any valid agreement, written or oral, of the partners as to the affairs of a limited partnership and the conduct of its business.

(10) "Partnership interest" means a partner's share of the profits and losses of a limited partnership and the right to receive distributions of partnership assets.

(11) "Person" means an individual, partnership, limited partnership (domestic or foreign), trust, estate, association or corporation.

SECTION 54. ORS 70.065 is amended to read:

70.065. (1) The Secretary of State shall collect the following fees for documents delivered for filing:

___________________________________________________________________

Document Fee

(a) Certificate of limited

partnership $ 40

(b) Application for reserved name $ 10

of a domestic limited partnership

following administrative

inactivation $ 30

(d) Application for reinstatement

of a foreign limited partnership

following administrative

inactivation $ 50

(e) Registration of foreign

limited partnership $ 440

(f) Annual report of a domestic

limited partnership $ 20

(g) Annual report of a foreign

limited partnership $ 220

(h) Certificate of existence or

authorization $ 10

(i) Amendment or correction of

filing $ 10

(j) Restated certificate of limited

partnership $ 10

(k) Voluntary cancellation

and withdrawals $ 10

(L) Change of registered agent

or office $ 10

(m) Registered agent resignations $ 10

(n) Articles of conversion $ 10

(o) Articles of merger $ 10

___________________________________________________________________

(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under this chapter.

(3) The Secretary of State by rule may establish fees, in addition to those provided for in subsections (1) and (2) of this section, for:

(a) Copying any public record maintained by the Office of Secretary of State relating to a domestic or foreign limited partnership, and for certifying the copy.

(b) Certifying to facts of record, pursuant to this chapter.

SECTION 54a. If House Bill 2212 becomes law, section 14, chapter 652, Oregon Laws 1999 (Enrolled House Bill 2212) (amending ORS 70.065), is repealed and ORS 70.065, as amended by section 54 of this 1999 Act, is amended to read:

70.065. [(1) The Secretary of State shall collect the following fees for documents delivered for filing:]

[_________________________________________________________________]

Document Fee

(a) Certificate of limited

partnership $ 40

(b) Application for reserved name $ 10

(c) Application for reinstatement

of a domestic limited partnership

following administrative

inactivation $ 30

(d) Application for reinstatement

of a foreign limited partnership

following administrative

inactivation $ 50

(e) Registration of foreign

limited partnership $ 440

(f) Annual report of a domestic

limited partnership $ 20

(g) Annual report of a foreign

limited partnership $ 220

(h) Certificate of existence or

authorization $ 10

(i) Amendment or correction of

filing $ 10

(j) Restated certificate of limited

partnership $ 10

(k) Voluntary cancellation

and withdrawals $ 10

(L) Change of registered agent

or office $ 10

(m) Registered agent resignations $ 10

(n) Articles of conversion $ 10

(o) Articles of merger $ 10

[_________________________________________________________________]

[(2) The Secretary of State shall collect a fee of $20 each time process is served on the Secretary of State under this chapter.]

[(3) The Secretary of State by rule may establish fees, in addition to those provided for in subsections (1) and (2) of this section, for:]

[(a) Copying any public record maintained by the Office of Secretary of State relating to a domestic or foreign limited partnership, and for certifying the copy.]

[(b) Certifying to facts of record, pursuant to this chapter.] The Secretary of State shall collect the fees described in ORS 56.140 for each document delivered for filing under this chapter and for process served on the secretary under this chapter. The secretary may collect the fees described in ORS 56.140 for copying any public record under this chapter, certifying the copy or certifying to other facts of record under this chapter.

SECTION 54b. The amendments to ORS 70.065 by section 54a of this 1999 Act become operative July 1, 2001.

SECTION 55. Sections 56 to 64 of this 1999 Act are added to and made a part of ORS chapter 70.

SECTION 56. Definitions. As used in sections 56 to 64 of this 1999 Act:

(1) "Business entity" means:

(a) A professional corporation organized under ORS chapter 58, predecessor law or comparable law of another jurisdiction;

(b) A corporation organized under ORS chapter 60, predecessor law or comparable law of another jurisdiction;

(c) A cooperative organized under ORS chapter 62, predecessor law or comparable law of another jurisdiction;

(d) A limited liability company organized under ORS chapter 63 or comparable law of another jurisdiction;

(f) A limited partnership organized under this chapter, predecessor law or comparable law of another jurisdiction.

(2) "Organizational document" means the following for an Oregon business entity or, for a foreign business entity, a document equivalent to the following:

(a) In the case of a corporation, professional corporation or cooperative, articles of incorporation;

(b) In the case of a limited liability company, articles of organization;

(c) In the case of a partnership, a partnership agreement and, for a limited liability partnership, its registration; and

(d) In the case of a limited partnership, a certificate of limited partnership.

(3) "Owner" means a:

(a) Shareholder of a corporation or of a professional corporation;

(b) Member or shareholder of a cooperative;

(c) Member of a limited liability company;

(d) Partner of a partnership; and

(e) General partner or limited partner of a limited partnership.

SECTION 57. Conversion. (1) A business entity that is not a limited partnership may convert to a limited partnership, and a limited partnership may convert to another business entity, pursuant to this section, by adopting a plan of conversion, if conversion is permitted by the statutes governing the other business entity.

(2) A plan of conversion shall set forth:

(a) The name and type of business entity prior to conversion;

(b) The name and type of the business entity after conversion;

(c) The terms and conditions of the conversion;

(e) Any additional information required in the organizational document of the converted business entity by the statutes governing that type of business entity.

(3) The plan of conversion may set forth other provisions relating to the conversion.

SECTION 58. Action on plan of conversion. (1) A plan of conversion shall be approved as follows:

(a) In the case of a limited partnership, by all the partners, unless a lesser vote is provided for in the certificate of limited partnership or, in the case of a foreign limited partnership, by the law of the jurisdiction in which the limited partnership is organized.

(b) In the case of a business entity other than a limited partnership, as provided by the statutes governing that business entity.

(2) After a plan of conversion is approved, and at any time before articles of conversion are filed, the planned conversion may be abandoned, subject to any contractual rights:

(a) By a limited partnership, without further action by the limited partners, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner determined by the general partners.

(b) By a party to the conversion that is not a limited partnership, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner permitted by the statutes governing that business entity.

SECTION 59. Articles of conversion. (1) After conversion is approved by the owners, the business entity shall file articles of conversion, which shall state the name and type of business entity prior to conversion and the name and type of business entity after conversion, and shall include the plan of conversion.

(2) The conversion takes effect on the latest of:

(a) The filing of the articles of conversion;

(b) If the surviving business entity is not a limited partnership, satisfaction of any additional filing requirements imposed pursuant to the statutes governing that business entity; or

(c) On the delayed effective date and time set forth in the filings.

SECTION 60. Effect of conversion; entity existence continues. (1) When a conversion to or from a limited partnership pursuant to section 57 of this 1999 Act takes effect:

(a) The business entity continues its existence despite the conversion;

(b) Title to all real estate and other property owned by the converting business entity is vested in the converted business entity without reversion or impairment;

(f) Liability of an owner for obligations of the business entity, including, without limitation, contractual, tort, statutory and administrative obligations, shall be determined:

(A) As to obligations incurred prior to conversion, according to the laws applicable prior to conversion, except as provided in paragraph (g) of this subsection; and

(B) As to obligations incurred after conversion, according to the laws applicable after conversion, except as provided in paragraph (h) of this subsection;

(g) If the converting business entity is a limited partnership or a foreign limited partnership and its obligations incurred before the conversion are not satisfied by the converted business entity, the persons who were general partners of the converting business entity immediately before the effective date of the conversion shall contribute the amount necessary to satisfy the converting business entity's obligations in the manner provided in ORS 67.315, or in the limited partnership statutes of the jurisdiction in which the entity was formed, as if the converting business entity were dissolved; and

(h) If prior to conversion an owner of a business entity was a partner of a partnership or general partner of a limited partnership or foreign limited partnership, and was personally liable for the business entity's obligations, and after conversion is an owner normally protected from personal liability, then such owner shall continue to be personally liable for the business entity's obligations incurred during the 12 months following conversion, if the other party or parties to the transaction reasonably believed that the owner would be personally liable and had not received notice of the conversion.

(2) Owners of the business entity that converted are entitled to the rights provided in the plan of conversion and:

(a) In the case of a limited partnership, a limited partner who did not vote in favor of the conversion is considered to be a partner who has withdrawn from the limited partnership effective immediately upon the effective date of the conversion unless, within 60 days after the later of the effective date of the conversion or the date the partner receives notice of the conversion, the partner notifies the partnership of the partner's desire not to withdraw. A withdrawal under this paragraph is not a wrongful withdrawal; and

(b) In the case of owners of business entities other than limited partnerships, the rights provided in the statutes applicable to the business entity prior to conversion, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

(3) The registration of an assumed business name of a business entity under ORS chapter 648 shall not be affected by the conversion.

SECTION 61. Merger. (1) A limited partnership may merge with one or more business entities, pursuant to this section, if each business entity that is a party to the merger approves a plan of merger and if the merger is permitted by the statutes governing each business entity. The business entity that survives may be a limited partnership or another business entity.

(2) The plan of merger shall set forth:

(a) The name and type of each business entity planning to merge;

(b) The name and type of the business entity that will survive;

(c) The terms and conditions of the merger;

(e) If any party is a business entity other than a limited partnership, any additional information required for a merger by the statutes governing that business entity.

(3) The plan of merger may set forth:

(a) Amendments to the certificate of limited partnership, if a limited partnership is the surviving business entity; and

(b) Other provisions relating to the merger.

SECTION 62. Action on plan of merger. (1) A plan of merger shall be approved by each business entity that is a party to the merger, as follows:

(b) In the case of a business entity other than a limited partnership, as provided by the statutes governing that business entity.

(2) After a merger is authorized, and at any time before articles of merger are filed, the planned merger may be abandoned, subject to any contractual rights:

(a) By the limited partnership, without further action by the limited partners, in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner determined by the general partners.

(b) By a party to the merger that is not a limited partnership, in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner permitted by the statutes governing that business entity.

SECTION 63. Articles of merger. (1) After a plan of merger is approved by each business entity that is a party to the merger, the surviving business entity shall deliver to the office of the Secretary of State, for filing, articles of merger setting forth:

(a) The plan of merger; and

(b) A statement that the plan of merger was duly authorized and approved by any party that was a limited partnership in accordance with section 61 of this 1999 Act, and by any party that was another business entity in accordance with the statutes governing that business entity.

(2) The merger takes effect on the latest of:

(a) The filing of the articles of merger;

(b) The filing of all documents required to be filed by the statute governing any party to the merger that is a business entity other than a limited partnership; or

(c) Any later effective date specified in the articles of merger.

SECTION 64. Effect of merger. (1) When a merger involving a limited partnership takes effect:

(a) Every other business entity that is a party to the merger merges into the surviving business entity, and the separate existence of every other party ceases;

(e) If a limited partnership is the surviving business entity, its certificate of limited partnership is amended to the extent provided in the plan of merger;

(g) Liability of an owner for obligations of a business entity, including, without limitation, contractual, tort, statutory and administrative obligations, shall be determined:

(A) As to obligations incurred prior to merger, according to the laws applicable prior to merger, except as provided in paragraph (h) of this subsection; and

(B) As to obligations incurred after merger, according to the laws applicable after merger, except as provided in paragraph (i) of this subsection;

(h) If a party to the merger is a limited partnership or a foreign limited partnership, and its obligations incurred before the merger are not satisfied by the surviving business entity, the persons who were general partners of the merging business entity immediately before the effective date of the merger shall contribute the amount necessary to satisfy the merging business entity's obligation to the surviving business entity in the manner provided in ORS 67.315, or in the limited partnership statutes of the jurisdiction in which the entity was formed, as if the merged party were dissolved;

(i) If prior to merger an owner of a business entity was a general partner of a limited partnership or a foreign limited partnership, and after merger is an owner normally protected from personal liability, then such owner shall continue to be personally liable for the business entity's obligations incurred during the 12 months following merger, if the other party or parties to the transaction reasonably believed that the owner would be personally liable and had not received notice of the merger; and

(j) The registration of an assumed business name of a business entity under ORS chapter 648 shall continue as the assumed business name of the surviving business entity.

(2) Owners of the business entity that merged are entitled to the rights provided in the plan of merger and:

(a) Any limited partner who did not vote in favor of the merger is deemed to have withdrawn from the limited partnership effective immediately before the merger unless, within 60 days after the later of the effective date of the merger or the date the partner receives notice of the merger, the partner notifies the limited partnership of the partner's desire not to withdraw. A withdrawal under this paragraph is not a wrongful withdrawal; and

(b) In the case of owners of business entities other than limited partnerships, the rights provided in the statutes applicable to the business entity prior to merger, including, without limitation, any rights to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the other owners, and to obtain an appraisal or payment for the value of an owner's interest.

MISCELLANEOUS

SECTION 65. ORS 732.521 is amended to read:

732.521. (1) Unless the provisions of ORS 732.517 to 732.546 are first satisfied, a person shall not engage in any of the activities described in this subsection as follows:

(a) A person other than the issuer of voting securities of a domestic insurer shall not acquire or attempt to acquire control of the domestic insurer. For purposes of this paragraph, a person acquires or attempts to acquire control of a domestic insurer when the person engages in any of the actions described in this paragraph, in the open market or otherwise, and if after consummation thereof the person would directly or indirectly, or by conversion or by exercise of any right to acquire, be in control of the domestic insurer. The actions are as follows:

(A) Making a tender offer for or a request or invitation for tenders of any voting security of the domestic insurer;

(B) Entering into any agreement to exchange securities for any voting security of the domestic insurer; or

(b) A person shall not enter into an agreement to merge with or otherwise acquire control of a domestic insurer.

(A) Acquiring, directly or indirectly, ownership of all or a significant portion of the assets of a domestic insurer. For purposes of this subparagraph, such an acquisition includes an offer, a request or invitation for offers, an acquisition or series of acquisitions in the open market, an exchange offer or agreement, an agreement providing an option to purchase, or a purchase of or offer to purchase securities convertible into voting securities.

(B) Bulk reinsurance by one insurer of all or a significant portion of the insurance, or a major class of such insurance, in force with another insurer or related or affiliated group of insurers. The provisions of this subparagraph do not apply to ordinary or customary reinsurance, or reinsurance pursuant to a treaty or treaties approved by the director.

(C) Any other arrangement that brings together under common ownership, control or responsibility all or a significant portion of the assets, liabilities or insurance in force of two or more persons, at least one of which is a domestic insurer.

(2) The provisions of subsection (1) of this section do not apply to any offer, request, invitation, agreement or acquisition exempted by the Director of the Department of Consumer and Business Services by order as:

(a) Not having been made or entered into for the purpose and not having the effect of changing or influencing the control or ownership of a domestic insurer; or

(b) Otherwise not comprehended within the purposes of subsection (1) of this section.

(3) Subject to the requirements of ORS 732.517 to 732.546, a domestic stock insurer, domestic mutual insurer, [or] domestic reciprocal insurer or domestic health care service contractor that is a corporation for profit may merge or consolidate with a stock insurer, mutual insurer, [or] reciprocal insurer or health care service contractor that is a corporation for profit.

SECTION 66. ORS 732.538 is amended to read:

732.538. (1) When a merger or consolidation becomes effective, the effect on the insurers and other parties to the merger or consolidation is as follows:

(a) The several insurers and other parties to the plan of merger or consolidation shall be a single insurer or other corporation, which, in the case of a merger, shall be that insurer or other corporation designated in the plan of merger as the surviving insurer or corporation, and, in the case of a consolidation, shall be the new insurer or other corporation provided for in the plan of consolidation.

(b) The separate existence of all insurers and other corporations party to the plan of merger or consolidation, except the surviving or new insurer or other corporation, shall cease.

(c) The surviving or new insurer or other corporation shall have all the rights, privileges, immunities and powers and shall be subject to all the duties and liabilities of an insurer organized under this chapter. If the surviving corporation is a health care service contractor, the corporation shall be subject to all the duties and liabilities of a health care service contractor under the Insurance Code.

(d) The surviving or new insurer or other corporation shall thereupon and thereafter possess all the rights, privileges, immunities and franchises, as well of a public as of a private nature, of each of the merging or consolidating insurers and other corporations. All property, real, personal and mixed, and all debts due on whatever account, including subscriptions to shares, and all other choses in action, and all and every other interest, of or belonging to or due to each of the insurers and other corporations so merged or consolidated, shall be taken and deemed to be transferred to and vested in the single insurer or corporation without further act or deed. The title to any real estate, or any interest therein, vested in any of such insurers and other corporations shall not revert or be in any way impaired by reason of the merger or consolidation.

(e) The surviving or new insurer or other corporation shall thenceforth be responsible and liable for all the liabilities and obligations of each of the insurers and other corporations so merged or consolidated. Any claim existing or action or proceeding pending by or against any of such insurers or other corporations may be prosecuted as if the merger or consolidation had not taken place, or such surviving or new insurer or other corporation may be substituted in its place. Neither the rights of creditors nor any liens upon the property of any such insurer or other corporation shall be impaired by such merger or consolidation.

(f) In the case of a merger, the articles of incorporation of the surviving insurer or other corporation shall be deemed to be amended to the extent, if any, that changes in its articles of incorporation are stated in the plan of merger. In the case of a consolidation, the statements set forth in the articles of consolidation that are required or permitted to be set forth in the articles of incorporation of corporations organized under ORS chapter 60 shall be deemed to be the original articles of incorporation of the new corporation.

(2) Subject to any shareholder rights under ORS 60.554 and 60.557, when a merger or consolidation becomes effective, in the case of an insurer or other corporation that has ceased to exist because of a merger or consolidation, the shares of that insurer or other corporation that are to be converted under the plan of merger or consolidation are void.

(3) As of the date on which a merger or consolidation becomes effective, the holders of converted shares are entitled only to the shares, obligations, other securities, cash or other property into which the shares have been converted in accordance with the plan of merger or consolidation.

(4) In the event of reinsurance pursuant to the plan, the applicable provisions of the Insurance Code shall govern the effects thereof.

SECTION 67. ORS 58.125, 62.610, 62.625, 62.635, 63.501, 67.345, 67.350, 67.355 and 67.370 are repealed.

SECTION 68. (1) Except as provided in sections 2b, 4b, 17b, 29b, 50b and 54b of this 1999 Act, sections 1 to 64 of this 1999 Act become operative on January 1, 2000.

(2) The amendments to ORS 732.521 and 732.538 by sections 65 and 66 of this 1999 Act become operative on June 30, 1999.

SECTION 69. The unit and section captions used in this 1999 Act are provided only for the convenience of the reader and do not become part of the statutory law of this state or express any legislative intent in the enactment of this 1999 Act.

SECTION 70. This 1999 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 1999 Act takes effect on its passage.

Approved by the Governor June 28, 1999

Filed in the office of Secretary of State June 28, 1999

Effective date June 28, 1999

__________