Entity Conversions: Navigating Key Delaware Procedures

Annie: Hello, everyone, and welcome to today's webinar, "Entity Conversions: Navigating Key Delaware Procedures." My name is Annie Triboletti. I will be kicking things off today.

So joining us today are Mike Maxwell and Alyssa Frank from Potter Anderson and Helena Ledic from CSC. So with that, I would like to welcome in Mike, Alyssa and Helena to introduce themselves.

Helena: Hi, everybody. This is Helena. I'm thrilled to be here with Mike and Alyssa. How about you introduce yourselves?

Mike: Good. Thanks, Helena. My name is Mike Maxwell. I'm a partner at Potter Anderson in their Corporate Transactions and Counseling Group. And I'm joined by my colleague Alyssa Frank here today. We're delighted to be here with you. Both of us are regularly practicing in Delaware entity matters, including what we're going to be discussing today, entity conversions. In particular, we're going to be focusing on LLCs as that is the specialization that both Alyssa and I have. But we will, of course, touch on other entity conversions as those follow a very similar format in a number of the different ways that they can be accomplished. Alyssa, go ahead.

Alyssa: Hi, everyone. Like Mike said, I do a lot of LLC work in our Transactions and Corporate Counseling Group. Happy to be here today, and thank you all for joining.

Helena: Terrific. So here's our agenda that we're going to be covering today. We've already covered our introduction. And then I believe we're going to get started off with a general overview of the conversions. And then we're going to see two views of Delaware — the conversion of a Delaware LLC and then a conversion to a Delaware LLC. So those two little prepositions over there we're going to be covering. And then what we'll also jump into then is conversions involving other Delaware entities beyond the LLCs. We're going to jump into then some practical considerations. And then we'll get into a Q&A and wrap up at the beginning.

So our first topic is going to be general overview of conversion, and I believe Mike is getting us started with that.

Mike: That's right. Thanks. Thanks, Helena. So welcome, everyone. Again, we're glad that you could join us today. As we previously mentioned, we'll be discussing entity conversions and specifically conversions involving LLC, in part to narrow and frame the conversation. But a lot of what we'll discuss in the LLC context, as you will see when we start discussing some of the other entity conversions, will have similar application and similar concepts that you can pull from this discussion.

But before we start discussing conversions, I thought it may be worth discussing why this has become a relevant topic recently. So as many of you may be aware, there have been some high-profile companies, most of which are corporations that have controlling shareholders, that have either sought or threatened to reincorporate out of Delaware in the wake of some Chancery Court rulings over the last few years that have imposed higher hurdles on controlled companies. So the issue has caught the attention of some of these non-controlled corporations as a result of the significant media coverage and social media coverage.

But I will say the controversy is really centered around controller conflicts and in some respects books and records, demands, and related lawsuits. And on that point, the proliferation of these Section 220 demands, which are the books and records demands, and related cases, together with the concerns around the predictability of planning for transactions involving controlling stockholders has prompted the Delaware Legislature, working with the Delaware State Bar Association's Corporate Council Committee, to draft and adopt Senate Bill 21. That was adopted and put into force last year. And there was a constitutional challenge late last year that was upheld by the Supreme Court earlier this year.

So SB21 created clear guideposts for Delaware corporations and balances the stockholders and board's rights for management and protection of their investor rights. The intent here is to really help Delaware corporations plan transactions and to assist judges in evaluating the merits of complaints challenging transactions. So now that's not entirely relevant for our purposes today as we discuss primarily conversions under the LLC Act, but I thought it would be worthwhile to spend a few minutes just to discuss why Delaware has been a popular destination for company formations and why I think it's still the case notwithstanding some of the recent news of the high-profile companies that have reincorporated to other jurisdictions.

As you may be aware, Delaware has been a premier state of formation for business entities since the early 1900s. I'd say I think it's still more than 60% of the Fortune 500 companies are incorporated in Delaware. And the goal of Delaware law and the aim, the intent of it is to provide both managers and investors with laws that are optimal for engaging in ethical and profitable business. So it's a balancing act, right, balancing the need for managerial flexibility with strong tools to hold the managers accountable for using that flexibility to advance the best interests of the investors, while at the same time providing investors protection when management misbehaves and to hold them accountable. So it's really trying to balance those two competing interests.

As the reincorporation competition between states is pushed forward, Delaware, I think, is still by far the largest state for incorporations, based on ISS data. That has continued to be the case, although there are a couple of other states that have continued to make inroads in updating their laws and updating their court systems.

And that brings me to why has Delaware's preeminence in business formation continued to be? And I think it really comes down to infrastructure in Delaware. And there are a number of factors that make up this "infrastructure" in Delaware, that help keep Delaware, at least for now, at the top of the incorporation food chain, if you will. So these factors include sophisticated and regularly updated statutory law, sophisticated business courts, significant and robust case law, along with attorneys and other professionals that are experts in the corporate law, and then the Delaware Secretary of State. I'll just touch on a few points on each of these.

So the DGCL, Delaware General Corporation Law is the foundation on which Delaware corporate law rests. It's an enabling statute. It includes a few important mandatory requirements to protect investors, and otherwise provides flexibility for corporations to carry out their businesses. Delaware also has premier statutes for business entities other than corporations, as we will discuss today. The LLC Act, the Limited Partnership Act, and the General Partnership Act, along with the Statutory Trust Act provide a number of options for business planning and transaction structuring.

The policy behind each of these statutes is to give maximum effect to the principle of freedom of contract and to the enforceability of the applicable governing agreements, these statutes being the LLC Act, the partnership statutes, and the Statutory Trust Act. The entity statutes are shaped by corporate law experts and protected from influence by special interest groups. So the Delaware Legislature every year reviews the entity statutes in conjunction with, for the DGCL, the Corporate Law Council, and then subcommittees of that Council, which both Alyssa and I serve on, for LLCs, for partnerships, as well as for statutory trusts. So these statutes are evaluated every year to determine if there are any updates that need to be made, if there is fine-tuning that needs to be accomplished to deal with issues that have arisen over the course of the previous year in practice.

The second point is sophisticated business courts. So Delaware is known worldwide for its judicial system and has expert and impartial judges that decide its corporate cases. The Delaware Court of Chancery is a specialized court of equity with specific jurisdiction over corporate disputes. So it gives it an expertise in dealing with these corporate matters, and not only expertise but the ability to move very quickly. There are no jury trials in Chancery Court. It's an expert judge, who usually has expertise and experience in corporate law, and allows them to move quickly to address matters on an expedited basis, typically much more expedited than any other state in the country. These judges are appointed through a bipartisan, merit-based selection process.

Unlike most other jurisdiction in the U.S., Delaware has no intermediate appellate courts. So cases from the Court of Chancery, or if they're in the Superior Court, which is the court of law in Delaware, both of those run straight to the Delaware Supreme Court. So if there's a need for an appeal, there's not an intermediate level of courts there.

The other thing that's unique, I think, to Delaware in particular, as I've talked with practitioners around the country, is the Court of Chancery. So as a trial court, they are providing written legal opinion. So there's robust case law and precedent that provides guidance to practitioners on how different points of Delaware law, whether it's the Corporate Code, or certainly in the last two decades it's exploded for the LLCs and limited partnerships as well, case law interpreting certain provisions, interpreting how a court reads and looks at certain things that apply to these LLC partnerships or, of course, the corporations. And not all states provide those written opinions at the trial level.

As I mentioned, judges, not juries, decide these corporate cases. And along with this sophisticated judiciary, Delaware has an ample supply of lawyers that are expert in Delaware corporate law. So definitely some advantages there from an infrastructure perspective.

And then the final point I'll make on the infrastructure is this Delaware Secretary of State. So the Division of Corporations of the Delaware Secretary of State's office really exists to provide corporations and their advisers with prompt and efficient service. They're open 15 hours a day to accommodate requests for filings from around the world. They offer specialized and expedited service, including 30 minute, 1 hour, 2 hours, same-day, and 24-hour service for urgent and time-sensitive matters. So, for example, if you need to file a merger before the market opens, you're able to do that and get back your evidence of filing pretty quickly, within a half an hour.

So the Delaware Secretary of State's Division of Corporations in conjunction with expert Delaware lawyers, and, of course, Delaware's registered agents, as our host today is CSC, they can handle almost any situation. And so there really is a culture and an infrastructure along those lines for filing and dealing with those types of issues. I think this is one of the primary reasons that Delaware has continued to be a primary and premier corporate destination.

And certainly for the alternative entities, which are these LLC partnerships, what we'll talk about a little bit more specifically today, our statutes continue to be some of the most flexible in the world. And there's robust case law supporting interpretations of these statutes, as well as different typical provisions of the operating agreements or governing agreements.

So with that background, we'll now get into the materials and discuss one of the most popular ways that a company can change its business form or change its jurisdiction of formation. We're going to start with a discussion what we mean generally when we talk about converting from one form of business entity to another. And throughout the presentation and in a summary fashion at the end, we're going to also discuss some of the practical considerations that one should consider when engaging in a conversion. And then we'll also briefly touch on conversions involving other entities, such as a corporation or a limited partnership. As I mentioned previously, a lot of the principles that we'll be discussing in the context of an LLC are going to have applicability to the other forms of entities and other entity conversions.

And again, finally, I'll just note that we are Delaware attorneys, so the focus of our presentation will be under Delaware law. But many of the considerations and the topics that we're going to discuss will be relevant for other jurisdictions. But you should always check with the statutory and other applicable law of a particular jurisdiction when you're considering a change of business form.

So with that, what do we mean by a conversion? So a conversion is a change of form of a business entity to another business entity or to another jurisdiction. So under Delaware law, it's a technical term that involves the change of a business entity's organizational form or jurisdiction of formation, pursuant to a specified statutory procedure. So it can refer to an entity outside of Delaware converting into an entity in Delaware. It can also refer to an entity in Delaware changing form to another form in Delaware or to a form in another jurisdiction.

So when considering a conversion, we have to give attention to a variety of factors, including the type of entity that's involved, so, for example, whether it's a corporation, an LLC, or a partnership. And this is really because the type of entity involved is going to inform the statutory regime that's going to control the type of change being effected. So, for example, a Delaware corporation will be governed by the DGCL, while an LLC change would implicate the Delaware Limited Liability Company Act. Same thing with a limited partnership that would be implicated by the Revised Uniform Limited Partnership Act in Delaware.

So it depends on the type of change being pursued as well. So different statutory provisions of the relevant statute will be implicated. So are you converting a Delaware LLC to another form of entity in Delaware? Or are you converting it to another jurisdiction or to another form in another jurisdiction? So a lot of variety there.

So today we're going to be discussing primarily LLCs. But like I said, I think this will be useful and we will touch on other types of conversions as well. So again, the types of change desired will be important on thinking about the types of conversions.

So changes can be made to the form of entity type within the same jurisdiction, so as I mentioned, corporation to an LLC or limited partnership, or an LLC to a corporation. But they can also be made to a form of entity by changing the jurisdiction of formation, such as a Delaware entity moving to New York or even a foreign jurisdiction or vice versa. So, for example, a Delaware corporation to a Pennsylvania corporation. We've got some other examples here. An LLC converting to a Pennsylvania LLC, or a Delaware corporation converting to a Pennsylvania LLC. So in that case, you've got a Delaware form of entity converting to a different form of entity in a different jurisdiction. And so similarly, these examples, just running through them again, Pennsylvania LP converting to a Delaware limited partnership, or a Pennsylvania LLC converting to a Delaware corporation.

So the statutory requirements and the legal permissibility of these types of changes to a business form depends on these considerations. So, for example, some states or foreign jurisdictions may not permit certain types of changes, and this may require further restructurings within a jurisdiction before you move to another jurisdiction. So, for example, if a Montana LLC cannot convert or domesticate to a Delaware LLC, but a Montana corporation can convert to a Delaware corporation, then it may require restructuring in Montana first and then seeking to accomplish the jurisdictional change. So again, it just depends on what you're trying to accomplish, and in particular, if you're dealing with foreign jurisdictions, you really need to look at what those foreign jurisdiction rules permit or require as well.

And then there are some other business and practical considerations. Again, we'll touch on these throughout the presentation, and we'll certainly touch on them at the end in a summary fashion. But just a few things to keep in mind as we go through this presentation, tax and security laws issues. Consents, what types of consents are required. Is there deal risk being that can you get the necessary consents to accomplish it if there are certain consents that are needed? Are there other ways that may be more efficient to accomplish something? And then fiduciary consideration. So what rights are being changed or effected by the restructuring and due processes that need to be put in place for the consideration of those rights being effected?

So now we'll get into the weeds a little bit on the conversion first of a Delaware LLC. This is dictated by Section 18-216 of the LLC Act. So there's broad flexibility under this provision of the LLC Act, 18-216, regarding organizational forms and jurisdictions to which a Delaware LLC may convert. So this is conversion of a Delaware LLC to another type of entity in Delaware or to another type of entity or jurisdiction outside of Delaware. So the types of organizations include a corporation, statutory trust, association, and common-law trust. And a conversion of a Delaware LLC to another jurisdiction or organization can be accomplished pursuant to this provision of the Act. And this really authorizes the Delaware LLC to convert to another Delaware entity, including any of these that we've listed up here.

So in order to effect a conversion of a Delaware LLC, if the LLC's operating agreement specifies the manner of authorizing the conversion, then that's how you would do it. So you can provide in your operating agreement what's required for a conversion. And if that's what's provided, if it's consent of Bob from down the street, then you have to get Bob's consent. It really is going back to this principle of freedom of contract and maximum enforceability of the LLC agreement. You can specify the manner for authorizing conversion in your operating agreement.

Now if you don't specify the manner of authorizing conversion and your LLC agreement does not prohibit a conversion, then the conversion would be authorized in the same manner in the operating agreement that it is provided for authorizing a merger. So a lot of times you'll see in an operating agreement where a merger is authorized, but people aren't necessarily thinking about conversion. So under this default of the statute, if the conversion is not prohibited and it's not specified how to accomplish a conversion, then you would look to the merger provisions of the operating agreement.

Now if the operating agreement is silent with respect to both conversions and mergers and does not prohibit conversions, then the conversion is authorized by members who own more than 50% of the then-current percentage or other interest in the profits of the LLC. So typically, commonly known as your LLC interest, percentage interest in the LLC.

There are a couple other things about the statute here just worth mentioning. The operating agreement may provide that you do not have the power to convert. Also, if an LLC converts to an other entity organized, formed, or created under the laws of a jurisdiction other than the state of Delaware, then a certificate of conversion must be filed with the Delaware Secretary of State. So as a final point here, you may notice, as I just read this text, that the provision is specific to a scenario where the Delaware LLC is converting to an entity formed or organized under the laws of a jurisdiction other than the state of Delaware, but it's silent as to what must be filed to affect the conversion into the other entity.

In a situation where a Delaware LLC is converting into another Delaware entity type, you do not need to file anything under 18-216. So, for example, if an LLC is converting to a Delaware limited partnership, you would look to Section 17-217(b) and (c) of the Delaware Revised Uniform Limited Partnership Act, which requires the filing of a certificate of conversion to limited partnership and a certificate of limited partnership, and sets forth the information that you have to include in that certificate of conversion. So again, the certificate of conversion that needs to be filed is really when you're going to somewhere else. Otherwise, you're going to look at those other states or other jurisdiction statutes.

So Alyssa is now going to walk us through some of the contents of a certificate of conversion. Alyssa.

Alyssa: Thanks, Mike. Yeah, so we're just going to run briefly through some of the requirements that are listed in the statute about what must be included in a certificate of conversion to a non-Delaware entity. So one of the first things to note is that you have to include the current name of the Delaware LLC, along with the name under which the LLC was originally formed. And if the LLC has never changed its name, then you would just put it twice, like here's its current name and it was formed under this name.

You also need to include the date that the LLC certificate of formation was filed with the Delaware Secretary of State. And something I just want to flag here is that we've sometimes seen a filed certificate of formation include the date that it was executed. And in that sort of a situation, when you're preparing the certificate of conversion, you want to make sure that you include the actual date of filing with the Delaware Secretary of State, as reflected in the timestamp on that certified certificate of formation, because that date of filing may differ from the date that the certificate was executed. That's just sort of a small point of something to keep in mind.

The certificate of conversion may also include a future effective date or time if desired. It's not necessary under the statute to include a future effective date or time. But we do want to note that it may be advisable to include one to ensure simultaneous filing with any other documents that may need to be filed in accordance with the laws of the state under which the converted Delaware LLC will be organized.

And we had a question from the audience about a conversion into Delaware, about like which state do you file articles of conversion first. And we just wanted to note that that's usually just going to depend on looking at both state statutes, the state where the LLC is formed or the entity is formed and the state where that company is going to be converting into, to find out if there are going to be multiple documents have to be filed at the same time. Some states may not require a simultaneous filing. We can't speak to that. We can only speak to Delaware law. But we just did want to note with the certificate of conversion for a Delaware LLC leaving that you have the ability to provide for a future effective date if you need to sort of like have it aligned with filings in other states.

So then another requirement is for the certificate of conversion to include a statement that the statutory approval requirements have been fulfilled. And then there are a couple of other pieces of required information under the statute that are meant to address legal proceedings relating to the converting LLC prior to its conversion.

And one other thing, I just briefly touched on this, but when you're dealing with a conversion out of Delaware, you just need to keep in mind that there may be a corresponding statute that's applicable to the type of organization to which the company is converting that has to be observed in tandem with the Delaware statutory requirements. So, for example, if you're converting an LLC out of Delaware to like a Maryland entity, you would just need to look at both sets of statutes and be familiar with any requirements of the state into which the Delaware LLC will become a converted entity.

We'll also touch briefly on the execution of a certificate of conversion. One of the things that the statute requires in 18-216 is that the certificate of conversion has to be executed in accordance with Section 18-204 of the Delaware LLC Act. And this section just states that a certificate that's required to be filed with the Delaware Secretary of State must be executed by an "authorized person." And that basically is just going to be a person who is authorized by the LLC. In this context, it's advisable that any resolutions that approve the conversion that are being adopted by whatever is the governing body of the converting LLC include specific authorization for a person or entity as applicable to execute that certificate of conversion as an "authorized person" of the converting LLC.

All right. So now I'll talk about filing a certificate of conversion. Let's see. So Section 18-216(e) of the Delaware LLC Act relates to a certificate of conversion of a Delaware LLC to a non-Delaware entity, and it requires the certificate to be filed with the Delaware Secretary of State in accordance with 18-206 of the Delaware LLC Act. So there are a number of technical provisions in 18-206 that relate to the Secretary of State's backend processes for handling the filing of a certificate.

But for our purposes, we just want to note that the certificate of conversion must be signed, and there are a few options for signing. You can use the facsimile signature, which is like a reproduction of a manual signature. You could also do a conformed signature or an electronically submitted signature.

There has to be authorization to file the certificate of conversion with the Secretary of State. I think Mike did talk about that to some extent, too. So I don't want to get into that again.

The default under the Delaware LLC Act is that a certificate is effective at the time of its filing with the Secretary of State. But as I just noted, a couple of slides ago, the certificate of conversion can include a future effective date or time. One thing to note here is that there are limits on future effectiveness. So the filing has to become effective on or by the 180th day after which the certificate is filed. And then, whether the certificate is effective as of its filing or whether it provides for future effectiveness, at whatever time the certificate does become effective, it functions as a cancellation of the certificate of formation of the converting Delaware LLC without the need to file a separate certificate of cancellation of certificate of formation. And again, that's for a situation where we have a Delaware LLC that's converting to a non-Delaware entity.

One last thing to note here is that the filing of the certificate with the Delaware Secretary of State requires the payment of associated filing fees. Generally speaking, you can find those in Section 18-1105(a)(3) of the Delaware LLC Act. And there's also an additional fee that you have to pay to obtain a certified copy of the certificate of conversion.

Mike: So now we're going to talk about the effects of filing and what happens when a certificate of conversion to a non-Delaware entity is filed with the Secretary of State. So upon the filing and the effectiveness of the filing and payment of all the required fees, the Delaware LLC, as Alyssa alluded to, the certificate of formation is canceled, so that the LLC ceases to exist as a Delaware LLC. A copy of the certificate of conversion to the non-Delaware entity that's certified by the Delaware Secretary of State, so you'll get that as evidence of your filing, that's prima facie evidence of the conversion by such LLC out of the State of Delaware.

One other point just to briefly mention here, and we'll talk about this a little bit later in the presentation when we talk about corporate conversions, but unlike a Delaware corporation, there are no appraisal rights granted to members who don't approve a conversion. So appraisal is only granted under the LLC Act if it is provided contractually. And so that is true for both mergers but also conversions. And I know recently, in the last four or five years or so, the Delaware Corporate Code has been amended so that conversions can be approved with less than a unanimous vote of the stockholders. But in conjunction with, that appraisal rights were extended to conversions. That is not the case for an LLC conversion.

So some of the other effects here on a conversion, unless otherwise agreed, conversion of a Delaware LLC to another entity does not require the LLC to wind up its affairs pursuant to the dissolution provisions of the LLC Act or pay its liabilities and distribute its assets. The conversion does not constitute a dissolution of the LLC. So when an LLC is converted to another entity or business form, pursuant to 18-216, for all purposes of the laws of the State of Delaware, the other entity or business form is really deemed to be the same entity as the converting LLC. So the intent of the conversion, again, is to be a continuation of the existence of the LLC in the form of this other business entity.

And so the conversion of a Delaware LLC out of Delaware and the resulting cessation of its existence as a Delaware LLC is not deemed to affect any obligations or liabilities of the LLC incurred prior to such conversion. So again, the intent is continuation of the same entities, and that matters arising prior to the conversion would continue to apply Delaware law. That gets to this point that conversion is not deemed to affect the choice of law applicable to the LLC with respect to matters that arose prior to the conversion.

And upon the effectiveness of the conversion, you'll see a few points here, on the slides, the rights, privileges, and powers of the converted LLC, and all property and all debts due, as well as other things and causes of action continue to remain vested in the converted entity. Again, the easiest way to think about this, at a high level, is that the converted LLC continues to exist, just in a different form or a different jurisdiction. Here we're talking about a non-Delaware jurisdiction.

Title to real property continues to be vested. Rights of creditors continue to be preserved and unimpaired. And all debts and liabilities, one point here on this, debts, liabilities, and duties of the converting LLC remain attached to the converted entity and can be enforced against it to the same extent as if those debts, liabilities, and duties had originally been incurred or contracted by the converted entity as such entity. So in this instance, for example, the Court of Chancery has allowed claims to be asserted by an LLC against a former director of a Delaware corporation for allegedly breaching his fiduciary duties owed to the corporation, even where that corporation is subsequently converted to a Delaware LLC. So again, this idea that there's a continuation and these debts, liabilities, claims, and rights continue to be vested in the continuing entity.

Now one other point to make here is that the rights, powers, privileges, and interests in property, as well as debts and liabilities, are not deemed to have been transferred to the converted entity as a consequence of the conversion. And this can address concerns with, for example, triggering a transfer of restrictions in other contracts. And as a matter of Delaware law, the conversion should not trigger a transfer restriction. So if you have a contract, for example, that's Delaware law governed, this conversion should not affect that. But it's important to note that that's as a matter of Delaware law. So it's important to confirm if there's a contract governed, for example, by New York law or some other state's law, just to confirm that doing a conversion of either a form or a jurisdiction will not somehow trigger those under that other state's law. But as a matter of Delaware law, it's not deemed to be a transfer.

Then in connection with a conversion to another business entity or form, the rights or security interests, or not security interests, but the securities or interests in the LLC, those have to be dealt with in some way. And so, for example, if you're an LLC converting to a corporation, you no longer have LLC interests. So something needs to happen to those LLC interests, and those can be exchanged for or converted into cash, property, or rights or securities or interests in the entity or business form into which the LLC is being converted. In addition to that, the rights or securities or interests could be exchanged or converted into rights or securities or interests in another entity or business form, not necessarily the one that's being the converted entity. They could remain outstanding or be cancelled.

So again, the statute provides a lot of flexibility for structuring a transaction. Again, it needs to be dealt with somehow. So keep in mind if you're converting, this is also a point where fiduciary duties and disclosure obligations could come into play. So, for example, if you're converting from a corporation to an LLC, how do those interests stack up to each other? And typically, when you're seeking consent or dealing with that, those differences and how they compare to each other should be clearly explained.

When you're dealing with a conversion out of Delaware, it's also important to keep in mind that there may be corresponding statutory applications or statutory provisions that are applicable to the type of organization to which the company is converting, and that those have to be observed in tandem with the Delaware statutory requirements. So again, just being familiar with the requirements of the state into which the Delaware LLC will become a converted entity, or if it's another type of Delaware entity, familiarity with those provisions as well.

So now we're going to move on to the next bullet that Helena spoke about in our introduction, dealing with instead of a conversion of a Delaware LLC, we're converting to a Delaware LLC. So the conversion of an other entity to a Delaware LLC can be accomplished pursuant to Section 18-214 of the LLC Act. This is similar to the broad flexibility that is required under or is permitted under 18-216. And "other entity" includes a corporation or a statutory trust, a business trust, association, real estate investment trust, common law trusts, a number of different types of entities.

And Alyssa is going to walk us through these entities a little more specifically. Alyssa. Alyssa, you may be muted.

Alyssa: I was, thanks. So I was going to talk about the authorization process for conversion to a Delaware LLC. So Mike, I don't know if that was not what you anticipated.

Mike: That's exactly right. Sorry. You can talk us through the provisions of conversion to a Delaware LLC.

Alyssa: So I would say the key point here is that converting to a Delaware LLC is not just a filing exercise. So before a certificate of conversion to a Delaware LLC can become effective, the conversion itself has to be approved under the governing rules of the converting entity.

Generally speaking, that means you're going to look at the converting entity's governing documents. Depending on what type of entity it is, it could be its charter, bylaws, operating agreement, partnership agreement, a trust instrument, any other sort of document that governs the entity. And you also have to look at the applicable law that governs that entity type to see if there are any other sorts of approval processes or like hoops you have to jump through ahead of going through with the conversion.

The other thing that we just want to flag here is that, under Delaware law, the LLC agreement for the entity that's converting to a Delaware LLC must also be approved by the same authorization that's required to approve the conversion itself. So whatever governing body has to approve the conversion should also have a draft of the Delaware LLC agreement and be approving that governing agreement at the same time.

And I would just say here that the practical takeaway is that authorization should be confirmed before preparing or filing the conversion documents. One of the things that I noted earlier is that there's like language in the Delaware statutes that at the time that the conversion takes effect, it must have been properly approved basically. So we just think that it's a best practice to have all of the approval processes sort of taken care of, those boxes checked when you're ready to file the conversion documents. And just to sort of highlight that the conversion approval and the LLC agreement approval should be aligned and should be properly documented.

We'll talk a little bit about the procedure for a conversion. So once the conversion is properly authorized, the next step is compliance with Section 18-214(h) and other Delaware filing requirements. So when you're converting an entity to a Delaware LLC, you're going to need to file two certificates with the Delaware Secretary of State. The first one is a certificate of conversion to a limited liability company. And the second one is a certificate of formation of a limited liability company. Both of those certificates will need to be executed in compliance with Section 18-204. And the certificate of formation's contents must comply with Section 18-201 of the Delaware LLC Act.

And a practical filing point here is that the two certificates have to be filed simultaneously. If the parties want the conversion to become effective at a later date or time, then both certificates need to provide for that future effective date or time. The filings should not become effective on different dates or different times within the same day.

So I would say just as a brief checklist here, when you're getting ready to file these two certificates, you should confirm that the conversion has been properly authorized, that the LLC agreement has been approved with the same authorization. You prepare both the certificate of conversion and the certificate of formation. Make sure the execution requirements are satisfied, and then coordinate the simultaneous filing with the matching effectiveness provisions.

And we'll just briefly delve into the contents of the certificate of conversion to a Delaware LLC. It's not too, too different, I guess, from what we talked about with the certificate of conversion of a Delaware LLC to a non-Delaware entity. The certificate of conversion is going to have to include the date of organization of the converting entity, along with the jurisdiction in which it was organized.

So if you have an entity that has previously converted, the certificate of conversion here to a Delaware LLC is also going to have to list the current jurisdiction under which the entity exists. So just as an example for that, if you're dealing with an entity that was originally formed as a Pennsylvania LLC and then it converted to a Wyoming corporation, and now it wants to convert into a Delaware LLC, the certificate of conversion is going to have to state that the converting entity was formed as a Pennsylvania LLC and that immediately prior to its conversion to a Delaware LLC, it is currently a Wyoming corporation.

The certificate of conversion is also going to need to include the name and type of entity of the converting entity immediately prior to the filing of the certificate of conversion to a Delaware LLC. And then the next required piece of information, you're going from historical information to forward looking. You need to include the name of the Delaware LLC, and that name is going to need to exactly match the name of the Delaware LLC that you list in the certificate of formation that's going to be simultaneously filed.

And then, as we've discussed, the certificate of conversion can include the future effective date or time of the conversion. And if nothing is included, then the certificate is just going to be effective when filed.

And now we'll move on to the contents of a certificate of formation of the Delaware LLC to which the other entity is converting. The requirements here are just the same as for any certificate of formation of a new Delaware LLC. It's going to have to include the name of the LLC. And then, as with any Delaware LLC, the converted entity is required, by Section 18-104 of the Delaware LLC Act, to have and maintain a registered office and a registered agent in the State of Delaware. And the certificate formation must also include the name and address of the registered agent.

And like we've said, if desired, the certificate may also include a future effective date or time. And as previously discussed, it should align exactly with whatever is in the certificate of conversion. And I would say something to note here is that when you're dealing with the Delaware Secretary of State, they handle these types of transactions on a regular basis, and they're very familiar with it. So it is possible that you could submit a certificate of conversion and a certificate of formation at the same time and basically achieve the desired effect of the simultaneous filing. But I would say we often recommend that you would include the future effective date or time, just to make sure that there are no issues with making sure that they are truly filed simultaneously.

All right, so execution of the certificates. So section 18-214(b) of the Delaware LLC Act requires each certificate to be executed in accordance with Section 18-204 of the Delaware LLC Act. This is similar to what we talked about in connection with the conversion of a Delaware LLC out of Delaware. Basically, you need to have the certificates be executed by one or more authorized persons who are authorized to execute the certificate on behalf of the other entity that's converting to a Delaware LLC. And then the certificate of formation must be signed by a person authorized to do so on behalf of what will be the converted Delaware LLC.

Our typical approach, when Potter Anderson is handling this type of transaction, is that we'll just include authorization, approval, and ratification of the execution of the certificates by an authorized person directly into the LLC agreement that's effective as of the time of such filing.

As we discussed in the context of filing a certificate of conversion of a Delaware LLC, the filing of a certificate of conversion to a Delaware LLC and the simultaneous certificate of formation must be filed in accordance with Section 18-206 of the Delaware LLC Act. And once again, each certificate may be signed by a facsimile signature, a conformed signature, or an electronically submitted signature, in addition to you can print the certificate and sign it and scan it in. Those are all viable options. And like we said before, there must be authorization to file each certificate. And the filing of each certificate is going to have associated fees, including a fee for getting a certified copy of the certificate of conversion and the certificate of formation.

As we previously touched on, the certificate of conversion and the certificate of formation are companion certificates. They must be filed simultaneously and be effective simultaneously, whether at filing or by specifying a future effective date or time. And again, same concept as we touched on earlier. If you do provide for a future effective date, it has to be effective within 180 days of the filing. And like I said, like generally speaking, obtaining the desired result of the simultaneous filing can usually be accomplished pretty easily. Not a big deal. It's just something that you don't want to lose sight of.

So then upon the effectiveness of a filed certificate of conversion to a Delaware LLC, the entity filing the certificate of conversion is converted to a Delaware LLC. And Mike is going to talk about the effect of such a conversion.

Mike: Great. Thanks, Alyssa. And just it's worth noting as we talk about those future effective times, for example, some foreign jurisdictions, if you're converting to a Delaware LLC or out of a foreign jurisdiction, they may not have as quick a process for leaving or ceasing to exist in that state. And so having that future effective time line up with those jurisdictional requirements is just one of the aspects of the Delaware LLC Act that allows that flexibility. But as Alyssa mentioned, making sure that if you're providing for a future effective time, it's the same in the certificate of formation as well as the certificate of conversion.

One other point that we saw in the questions was that can the name of the LLC be changed when you do the conversion. And I think the answer is yes, you can change to a different name as you convert into and sometimes it's necessary, I guess, depending on what name availability is in the Delaware LLC.

All right. So moving on to the effects of the conversion, once the certificate of conversion and the certificate of formation have been filed or upon the effectiveness of those certificates, as we've discussed with the other statutes, converting a Delaware LLC to something else, converting into a Delaware LLC, it's continuation of the same entity, and you're deemed to be a Delaware LLC as of the time of conversion. And you're going to be subject to the Delaware LLC Act from that point on. But the existence of the "new" Delaware LLC is really deemed to have commenced on the date that the converting entity commenced its existence in the jurisdiction in which it was first created.

Another point to mention is similar to conversion of LLCs to another jurisdiction or a form of entity, the conversion of another entity to a Delaware LLC does not affect obligations or liabilities incurred prior to its conversion or the personal liability of any person incurred prior to the conversion.

And then, again, kind of the similar refrain, the LLC is a continuation of the existence of the converting other entity, and it's not deemed as a consequence of the conversion to have been transferred for purposes of Delaware law. We talked about why that might be important under transfer provisions under a contract, but the similar treatment as under the other statute. The title to real properties vested continues in the converted entity. Rights of creditors continue to be vested unimpaired or preserved unimpaired. Debts, liabilities, duties, rights, and obligations, all those things continue with the continuing entity, the Delaware LLC in this case.

So as far as the effects, it's very similar to the treatment of an entity converting out of or an LLC converting out of Delaware or to another type of form. And again, just to highlight this point, a lot of these, at least in Delaware, the treatment of these types of conversions, regardless of the type of entity, are going to be very similar, generally speaking.

As previously mentioned, the converting entity is not required, as a matter of Delaware law, to wind up its affairs. And then when it's been converted to an LLC, the LLC is deemed to be the same entity as the converting entity. Again, this similar concept that we've been hitting on throughout the presentation.

So then we get to the equity interests. As with the LLC that's converting to another form or another jurisdiction, we have to deal with the equity interests of the other entity. And so those can be exchanged for or converted into cash or property or shares of stock. In addition to, or in lieu thereof, can be exchanged for or converted into cash, property, shares of stock, rights, or securities in another domestic corporation or another entity or may be canceled. So again, a lot of flexibility in how you treat the equity interests.

So it's, again, important the conversion, as we mentioned, is approved in the manner provided for in the document or instrument or other writing. It's important to check these jurisdictional requirements or entity's requirements.

And then one thing I'll mention here in dealing with, and I think this is a good place to discuss this, is where we're talking about how equity interests are treated or how you deal with those, there's this idea of a plan of conversion. Under the DGCL, this was introduced in the last few years as a concept where you can provide for a plan of conversion. The LLC Act is silent on plans of conversion. It's not specifically mentioned.

That said, there has to be some way to address this. And so that can be in the LLC agreement. It could be in resolutions that address the conversion and the specific mechanics, including what you're doing with the equity interests, whether you're cancelling them or converting them into the new entity's interest. But you can also use a plan of conversion, similar to like a merger agreement, to lay out the terms of conversion. And so I do think if you use a plan conversion, it's still worth in this LLC agreement, especially if you're converting to a Delaware LLC, as Alyssa mentioned, you have to approve the LLC agreement by the same authorization that you approved the conversion.

That LLC agreement should also lay out somewhere in the LLC agreement what happened to the prior interests. As a best practice, I think that's how we would handle it. So even if you have a plan of conversion that lays out the mechanics and what happens to the equity interests, it's worth also providing for that in your LLC agreement so that there's no question as to how the exchange of rights or conversion or cancellation of interests, what exactly happened. But again, just something that to keep in mind as you're thinking about a conversion to a Delaware LLC addressing these points.

So one other point to mention here is the Delaware LLC Act's conversion provisions don't limit the accomplishment of a change in the law governing or the domicile of the other entity to the State of Delaware by other means provided for in the LLC agreement or as otherwise were permitted by law. So really this means that the change in the structure in your jurisdiction could be accomplished by other means. For example, could you amend the LLC agreement to permit the accomplishment of the change in jurisdiction?

If you're coming to a Delaware LLC, you'd probably have to file a certificate of formation still. So there may be other considerations there. But I think the intent of this provision of the statute is really just to mean to clarify that there are other ways that you can accomplish, or if there are other ways to accomplish a change of jurisdiction or form, then you can do that in such other way. For example, a merger is another thing that comes to mind here.

So now we're going to quickly talk about conversions of or to other Delaware entities. So we're going to talk about some of these other statutes. So beyond LLCs, other types of conversions, we've touched on these a little bit throughout. And here are just some of the statutory provisions for Delaware limited partnerships, corporations, and series. And we'll just briefly touch on a few of these as we talk through this.

So limited partnership conversions, conversions under the Delaware Revised Uniform Limited Partnership Act largely align with those that we've talked about in the Delaware LLC Act context. So key differences generally relate to the differences between LLC and limited partnerships. For example, approval by the general partners or limited partners instead of members. It's a certificate of limited partnership rather than a certificate of formation, partnership agreement rather than an LLC agreement or operating agreement. But generally speaking, a lot of the same types of provisions in the Partnership Act are going to mirror the LLC Act provisions, absent those kind of critical differences where you've got a general partner and limited partners instead of members.

On the mechanics of series conversions for an LLC series or a partnership series and the approvals for those are comparables to those, again, for conversions of LLC and partnerships. The key point here is that these are more limited. So, for example, a registered series of an a Delaware LLC or a limited partnership to a protected series of the same Delaware LLC or limited partnership. So that means that a you can't convert a registered series of a Delaware LLC to a protected series of a different Delaware LLC. It has to be of the same Delaware LLC. Same thing for a protected series to convert to a registered series. It has to be in the same LLC.

Authorization very similar to the format that you have in the LLC Act and in the Partnership Act. It's as it's set forth in the governing agreement. If that agreement is silent, then it's authorized by, for example, the members holding more than 50% of the profits interest. Or if you're dealing with a partnership, it's the general partners associated with such series and the limited partners owning more than 50% of the profits.

So again, as I mentioned at the outset of this presentation, once you understand the formula or the how the conversion statutes work in the LLC Act, it really does help apply that to the Limited Partnership Act and dealing with the series as well.

All right. So now we're going to talk about conversion to a Delaware corporation. So similar to the flexibility afforded under the LLC Act and the Partnership Acts, regarding the types of entities that can convert or may convert to a Delaware LLC or partnership, there's a wide range of other entities that can convert to a Delaware corporation under the DGCL. And this is under Section 265. So these other entities are defined as domestic or foreign, but they exclude a Delaware corporation.

As I mentioned previously, this concept of a plan of conversion was introduced in the last few years. It really allows the board to adopt a plan of conversion that lays out the mechanics, what happens to the equity interests, and how the conversion is accomplished. And so that's relatively new in the DGCL statute. Like I said, under the LLC and partnership statutes, it's not expressly mentioned, but you are permitted to use a plan of conversion as a means to accomplish that as well.

And I think now Alyssa is going to walk us through some of the requirements for a corporate conversion. Alyssa?

Alyssa: Thanks, Mike. So I'm just going to try to really buzz through this, just because there is a lot of similarity to some of the other conversion types we've discussed in the LLC context and we only have 14 minutes left. So pretty much what the slides say when you're converting to a Delaware corporation, you're going to have to file two certificates — a certificate of conversion and a certificate of incorporation. And Section 265 of the DGCL is going to set forth what needs to be included in that certificate of conversion.

Similar to concepts that we've already covered, the certificate of incorporation is going to have what you would need to put in a certificate of incorporation if you were just creating a new Delaware corporation. You're going to want to make sure that both of those certificates are filed simultaneously. And you might want to consider including a future effective date or time. And I think, Mike, if it's okay, I'm just going to have it move on to your discussion of the effects of the conversion.

Mike: Yeah. And again, as previously mentioned, this is very similar under the DGCL as well as under the LLC and partnership. So the obligations and liabilities incurred prior to, they're not affected. So if I had to sum it up, it's a continuation of the same entity as the converting other entity. So just keeping that in mind. Obviously, reading the statutory provisions very similar, across the board, as to the effect, but still worth reading those provisions of each statute to make sure that you're aware of at least the exact effects, but conceptually and on a larger scale or a higher-level basis very similar to the LLC and partnership conversion statutes. So I don't think we need to walk through these too in depth.

But again, equity interests, same kind of thing. You can exchange them for other rights, but they have to be dealt with. And just that goes to the plan of conversion, the resolutions, however you're deciding to deal with that in the conversion. Those equity interests have to be dealt with.

And again, back to the same idea, a Delaware corporation is deemed to be the same entity as the converting other entity. So if you keep that in mind as you're looking at the statute, I think that helps understand it a little bit better.

So under DGCL Section 266, this is the other kind of flip side of a conversion. A Delaware corporation may, upon proper authorization, convert to another entity. The other entity can be a domestic or foreign entity, but it may not be a Delaware corporation. And Alyssa is going to walk us through quickly the requirements for conversion of a Delaware corporation.

Alyssa: Yeah, thank you, Mike. So the overall concept is pretty similar across all the different entity types. So we don't need to dwell too long on this. But there are some specific procedural requirements in the DGCL for a Delaware corp that's going to convert out of Delaware or convert just to another entity.

So the process here really is dependent on, in beginning, with the board of directors, and the board has to adopt a resolution approving the proposed conversion. The resolution should identify the type of entity that the corporation will become. It could be become an LLC or a limit partnership, for example. And just recommend the conversion for the stockholders to approve. So this is dealt with in more detail in Section 266 of the DGCL.

Something that we wanted to highlight is just that, as Mike has previously mentioned, the converting entity can adopt a written plan of conversion. It's not mandatory. But it just can be very helpful to plan, I guess, like the structure and contours of the conversion transaction. It can include the mechanics of the conversion, terms and conditions of the transaction, the treatment of the equity interests, governance matters, etc. So if the corporation does choose to adopt a plan of conversion and the board approves the plan, the board should approve the plan of conversion at the same time that it approves the conversion itself.

Let's see. So once the board has acted in terms of approving the proposed conversion, then the process moves to the stockholders. So the board's resolution will be submitted for stockholder approval. It could happen at an annual meeting or a special meeting. It could happen by written consent. The stockholders do have to get notice of the meeting. And Delaware law is pretty strict on this with requiring notice to all stockholders because a conversion, like it's a fundamental transaction that changes the nature of the Delaware corporation.

Let's see. All right. There was just one thing that we wanted to note, that if you have a Delaware corporation that is looking to convert out of being a Delaware corporation and it hasn't issued any shares yet, then you don't need to go to a stockholder vote. So that's just something to keep in mind if you're dealing with like a newly-formed Delaware corporation that decides early on in its life cycle that another entity form is more appropriate.

So we've included here the required contents of a certificate of conversion of a Delaware corporation that's converting away from a Delaware corporation. And just like the requirements are here. And as we've noted in the LLC context, if you are converting out of Delaware, then you just have to be aware of like whatever jurisdiction the Delaware corporation is converting into, you have to be aware of that jurisdiction's rules and laws governing the conversion process and filing requirements relating to the conversion.

All right, Mike. You want to take it away?

Mike: Yeah. And just one other point to mention, with respect to the authorization and approval process, is to keep in mind that under the DGCL because of the change in the stockholder requirement away from it used to be a unanimous vote of the stockholders to effect a conversion and now it's not. And so because it's not, it does not require unanimous consent of the stockholders. Appraisal rights will come into play. And so there may have to also be appraisal notices and those types of things. So you should look at the appraisal statutes as well when you're thinking about a conversion of a Delaware corporation out of Delaware.

With that, we'll quickly touch on the effects of conversion. Very similar to what we've been talking about in the other entity context. It's continuation. The obligations and liabilities prior to conversion are not affected by the conversion.

I've seen this in a few places in the chats or in the questions. So just to clarify, there's no need for a Delaware corporation to wind up its affairs, the same for an LLC, prior to the conversion unless you've otherwise agreed, and the conversion does not constitute a dissolution. And following the conversion of the Delaware corporation, for all purposes of Delaware law, it's the entity into which the Delaware corporation is converted is the same as the Delaware corporation. But there's no need to separately dissolve or wind up the affairs of the Delaware corporation because it's continuing on in this new jurisdiction or new form.

Just quickly touching on slides 47 and 48, again dealing with the equity interests, similar to the application in these other contexts. You have to address what's happening to those, and so just want to make sure that we're addressing those in some manner.

And then just a few miscellaneous provisions. Section 266 is not deemed to authorize conversion of a charitable nonstock corporation into another entity, if the charitable status would be lost or impaired due to the conversion. It's kind of a random weird tip there, but just something to keep in mind.

And then dealing with voting agreements and any provision of a certificate incorporation incorporated before August 1st, 2022, or any provision of a voting trust agreement or other written agreement among the corporation or its stockholders that restricts or conditions or prohibits the consummation of a merger or a consolidation is going to be deemed to apply to a conversion as if it were a merger or a consolidation, unless the certificate of corporation expressly provides otherwise. And I think this, again, is getting at this idea that the vote changed for what is required to authorize a conversion, where it used to be unanimous and now it's not. And so I think if there are restrictions on merger, at least if they were adopted prior to August 1st, 2022, they are going to apply to a conversion as well.

And then, with that, I think we're just going to touch quickly on some other things to keep in mind, practical considerations with the last few minutes here, common pitfalls. As we've mentioned, a number of these different things, substance of applicable non-Delaware law, coordination across the borders, especially state or foreign jurisdictions, timing issues, timing issues as to authorization, use of forms for filing. Alyssa, do you want to touch on the use of forms for filing, what we mean by that?

Alyssa: Yeah, sure. So I guess I'll try to put this delicately. I think a lot of different secretaries of states and different states, including Delaware, will include forms on their websites to like have a form for a certificate of conversion, for example, or a form for a certificate of formation. And I would say, like a lot of times, the forms are like decent starting points. But we would just advise using caution and just sort of wholesale adopting those forms.

And instead of doing that, like our fundamental advice is to always look at the relevant statute to see what exactly are the requirements of what has to be put in whatever certificate you're preparing that needs to be filed. And I mean it's a really like a pitch to like hire attorneys in that state. Like we're Delaware attorneys, we know what goes in a certificate of conversion to a Delaware LLC, for example. And so I think it's basically don't just take a form from the state website and it's not necessarily going to include 100% of the information or be teed up 100% how we would recommend to tee up that certificate in accordance with the relevant statutory requirements.

Mike: Yeah, great. We also touched on this a little bit earlier, availability of name for a converted entity. So you can adopt a new name. But if you're planning or hoping to use the same name in a different form or a different jurisdiction, just making sure that it's available because that may be something that surprises people if they try and use the same name and it turns out it's being used.

A couple other things worth mentioning, and I touched on these earlier, but just to revisit briefly is fiduciary duties and standards of review. Most actions in Delaware are twice tested. So it's one, is it legally permissible, and then two, is it equitable? Does it comply with fiduciary duties of care and loyalty that are owed by directors or managers or a general partner?

And so even though you've complied with the statutory prerequisites necessary to accomplish conversion, it's worth noting that that doesn't preclude judicial inquiry into the substantive and procedural fairness of the transaction. And so depending on what you're doing, again, like for example with equity interests, or how much you're changing the rights, it's worth understanding whether those are going to be fair to the stockholders or the members or the interest holders. Are they receiving fair value for their shares and those types of considerations? And so now this may be a little bit different in LLCs and partnerships because you can modify or even eliminate fiduciary duties in LLCs and certainly in limited partnerships as well. But just something to keep in mind as you're thinking about conversions.

The other thing is disclosures. Whenever you're soliciting consent or notifying members or partners or stockholders of actions taken, it's important to keep in mind what disclosures may be required by the relevant governing documents as well as the statutes. And so depending on the type of entities, as we mentioned with corporations, there may be appraisal that's implicated, disclosing the types of differences or comparisons. So, for example, if you're converting from a Delaware corporation to an LLC, what are the stockholders gaining or losing and comparing those types of jurisdictional things.

So again, just keeping those types of provisions in mind or types of issues in mind as you're thinking about fiduciary duties and disclosure obligations in effecting a conversion. And then there are a couple other factors that we wanted to just briefly touch on as we're out of time here. But, Alyssa, do you want to run through your thoughts on a few of these and then we can do the close?

Alyssa: Yeah. I think, Mike, you sort of hit on some of these at the top of the webinar, just in terms of like the quality and predictability of Delaware law and the judicial system here in Delaware. But we just wanted to sort of flag a couple of other things just to think about if you're considering converting a Delaware entity out of Delaware. Really like these are still practical considerations, just in terms of like the list of things to consider when you're in this process.

So governing documents, you might need to adopt a completely different LLC agreement, for example. But if you have a governing document that has negotiated terms, you just have to think about how those terms fit in the new jurisdiction to which the entity is moving.

We had some questions about like what is the impact of a conversion on existing contracts. So that's just something to think about if the conversion to a new jurisdiction, for example, might trigger any sort of default or notice requirements under existing loan documents or contracts.

And really just, I guess, the sort of like non-legal impact of the conversion, in terms of you might be dealing with investors or lenders or acquirers who might have a preference for a Delaware entity and now you've converted out of Delaware. And then considerations just like transfer taxes, state income taxes, annual reporting obligations, and the effects of conversion on regulatory and licensing considerations.

So I didn't really have anything else specific to say about that, especially since we're out of time. But Mike, I don't know if you had any final thoughts on any of these points.

Mike: Yeah, these are all good points, and again, just a list for the audience to have as a reference point. The one thing I'll note on the governing documents, for example, Delaware has an implied contractual covenant, good faith and fair dealing that cannot be eliminated. And so if you are converting, for example, to another jurisdiction that may not have that concept, something that's come up in our practice, considering how you address that. So something to think about, again as you're considering these things.