Conversion Agreement
What is this form?
The Conversion Agreement is a legal document that outlines the terms and conditions under which shares of common stock from specific corporations are converted into Series A Preferred Shares. Unlike other share conversion forms, this agreement includes specific provisions for the rights and obligations of the converting parties, ensuring compliance with securities laws and corporate governance. This form is essential for companies and shareholders involved in share conversions to protect their interests and maintain legal clarity in transactions.
Main sections of this form
- Definitions of MTI shares and CGI shares to be converted.
- Provisions for the number of shares being converted into Series A Preferred Shares.
- Representations and warranties by each party regarding share ownership and authority.
- Conditions for the issuance of Series A Preferred Shares upon conversion.
- Governing law and dispute resolution provisions.
Situations where this form applies
This Conversion Agreement is typically used when a corporation, such as MTI Technology Corporation or The Canopy Group, Inc., wishes to convert existing shares of common stock into a different class of shares, specifically Series A Preferred Shares. This form is particularly necessary during corporate restructuring, financing rounds, or mergers and acquisitions where share classes are being altered to meet investment goals or regulatory requirements.
Who this form is for
- Corporations seeking to convert existing common stock shares to Series A Preferred Shares.
- Shareholders of the corporation involved in the conversion process.
- Investors looking to understand the terms under which they hold shares in a company.
- Corporate legal advisors drafting or reviewing share conversion agreements.
How to prepare this document
- Identify and enter the names of the parties involved in the agreement.
- Specify the total number of shares being converted by each party.
- Provide details regarding the Series A Preferred Shares being issued.
- Ensure that all parties sign the agreement, indicating their acceptance of the terms.
- Review the completed agreement for accuracy before submission.
Does this document require notarization?
In most cases, this form does not require notarization. However, some jurisdictions or signing circumstances might. US Legal Forms offers online notarization powered by Notarize, accessible 24/7 for a quick, remote process.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Mistakes to watch out for
- Failing to properly define shares being converted, leading to confusion.
- Not obtaining required signatures from all parties involved.
- Overlooking the necessity of specific representations and warranties.
- Neglecting to review the governing laws applicable to the agreement.
Advantages of online completion
- Convenient access to a professionally drafted legal document.
- Easy download and customization according to specific needs.
- Reliable templates that include necessary legal language and provisions.
- Time-saving compared to hiring legal counsel for standard agreements.
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FAQ
Some S Corps want to convert to an LLC but still be taxed as an S Corp. There are two ways to do this. The first way is to create an LLC and subsequently convert the corporation into the LLC. The corporation will then be referred to as an LLC, and the corporation's assets will transfer to the new LLC.
Changing a corporation to an LLC is not an impossible task, but the traditional way of doing so can be quite complicated and expensive, as it requires you to first form a new LLC, then to transfer the assets and liabilities of the corporation to the new LLC and exchange shareholders' shares for LLC memberships and then
Form a new LLC. formally transfer your corporation's assets and liabilities to the LLC. formally exchange corporation shares for LLC membership interests; and. otherwise formally liquidate and then dissolve the corporation, including filing all necessary dissolution documents with the secretary of state.
You have many options when naming a limited liability company (LLC)you may choose to include your name or your product, or you may invent an entirely new word all your own. What you cannot do, however, is include the word "Incorporated" or its abbreviation "Inc." in the name of an LLC's name.
Conversion Agreement means any agreement entered into from time to time between the Borrower or Guarantor (or their respective agents) and any maintenance facility with respect to the conversion of an ACS Group Aircraft to a freighter or mixed-use aircraft.
The corporation can be merged into an LLC.The provisions of Code § 336 apply to S corporations as well as C corporations. A corporation merging or converting into an LLC may thus recognize significant income when the corporation owns appreciated assets.
Depending on the state in which the business is incorporated, changing the status from an S corporation to an LLC might only require one form sent to the secretary of state designating the switch. In other states, the LLC might have to merge with the S corporation, with the LLC named the surviving merger company.
There are several reasons why a corporation might choose to convert to an LLC. Take advantage of pass-through taxation. If your corporation is taxed as a C corporation, you are taxed twice: there's a corporate tax on profits, and shareholders are then taxed on dividends that are paid from those profits.
The conversion of a C corporation into an LLC is treated as a complete liquidation of the corporation for tax. The liquidation of a C corporation with appreciated assets can potentially result in double taxation a tax to the corporation on the distribution of assets under Sec.