Introductory Reporters’ Note

The proposed revisions to the text of the act set forth in this document have been prepared as part of a project that has two purposes: (i) to harmonize the language of all of the unincorporated entity laws, and (ii) to revise the language of each of those acts in a manner that permits their integration into a single code of entity laws.

The Reporters’ Notes in this document are limited to explaining the source of certain of the proposed changes. Following the approval of the changes in this document by the Conference, the Reporters’ Notes will be replaced with more usual comments that explain the provisions of the act.

The harmonization process has involved the revision of the following acts, some of which are referred to in the Reporters’ Notes by the abbreviations listed below:

HUB Business Organizations Act

META Model Entity Transactions Act

MORAA Model Registered Agents Act

UPA Uniform Partnership Act (1997)

ULPA Uniform Limited Partnership Act (2001)

ULLCA Uniform Limited Liability Company Act (200_)

USTEA Uniform Statutory Trust Entity Act

Coop Act Uniform Limited Cooperative Association Act

UUNAA Uniform Unincorporated Nonprofit Association Act (200_)

Changes to the currently effective text of the act are shown by ~~striking through text to be deleted~~ and underlining text to be added. Changes that adopt language from the HUB, META, or MORAA or are merely relocations of current language or corrections to cross references are shown in black type. Changes that adopt language from other unincorporated entity laws are shown in blue type. Changes that do not have a source in one of the existing unincorporated entity laws are shown in red type.

HARMONIZED REVISED UNIFORM unincorporated nonprofit association act

SECTION 1. SHORT TITLE. This act may be cited as the Revised Uniform Unincorporated Nonprofit Association [Act.]

SECTION 2. DEFINITIONS. In this [act]:

(1) “Established practices” means the practices used by an unincorporated nonprofit association without material change during the most recent five years of its existence, or if it has existed for less than five years, during its entire existence.

(2) “Governing principles” means the agreements, whether oral, in a record, or implied from its established practices, that govern the purpose or operation of an unincorporated nonprofit association and the rights and obligations of its members and managers. The term includes any amendment or restatement of the agreements constituting the governing principles.

(3) “Manager” means a person that is responsible, alone or in concert with others, for the management of an unincorporated nonprofit association.

(4) “Member” means a person that, under the governing principles, may participate in the selection of persons authorized to manage the affairs of the unincorporated nonprofit association or in the development of the policies and activities of the association.

(5) “Person” means an individual, business corporation, ~~business trust, statutory entity trust, estate, trust,~~nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, or common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

(6) “Record”, used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(7) “Sign” means, with present intent to authenticate or adopt a record:

(A) to execute or adopt a tangible symbol; or

(B) to attach to or logically associate with the record an electronic symbol, sound, ~~symbol,~~ or process.

~~(7)~~(8) “State” means a state of the United States, the District of Columbia, Puerto Rico, United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(8)(9) “Unincorporated nonprofit association” means an unincorporated organization consisting of [two] or more members joined under an agreement that is oral, in a record, or implied from conduct, for one or more common, nonprofit purposes. The term does not include:

(A) a trust;

(B) a marriage, domestic partnership, common law domestic relationship, civil union, or other domestic living arrangement;

(C) an organization formed under any other statute that governs the organization and operation of unincorporated associations;

(D) a joint tenancy, tenancy in common, or tenancy by the entireties even if the co-owners share use of the property for a nonprofit purpose; or

(E) a relationship under an agreement in a record that expressly provides that the relationship between the parties does not create an unincorporated nonprofit association.

Reporters’ Note

“Person.” Conformed to HUB § 1-102 and META § 102.

“Sign.” Patterned after HUB § 1-102 and META § 102.

SECTION 3. RELATION TO OTHER LAW.

(a) Principles of law and equity supplement this [act] unless displaced by a particular provision of it.

(b) A statute governing a specific type of unincorporated nonprofit association prevails over an inconsistent provision in this [act], to the extent of the inconsistency.

(c) This [act] supplements the law of this state that applies to nonprofit associations operating in this state. If a conflict exists, that law applies.

SECTION 4. GOVERNING LAW.

(a) Except as otherwise provided in subsection (b), the law of this state governs the operation in this state of all unincorporated nonprofit associations formed or operating in this state.

(b) Unless the governing principles specify a different jurisdiction, the law of the jurisdiction in which an unincorporated nonprofit association has its main place of activities governs the internal affairs of the association.

SECTION 5. LEGAL ENTITY; PERPETUAL EXISTENCE; POWERS.

(a) An unincorporated nonprofit association is a legal entity distinct from its members and managers.

(b) An unincorporated nonprofit association has perpetual duration unless the governing principles specify otherwise.

(c) An unincorporated nonprofit association has the same powers as an individual to do all things necessary or convenient to carry on its purposes.

(d) An unincorporated nonprofit association may engage in profit-making activities but profits from any activities must be used or set aside for the association’s nonprofit purposes.

SECTION 6. OWNERSHIP AND TRANSFER OF PROPERTY.

(a) An unincorporated nonprofit association may acquire, hold, encumber, or transfer in its name an interest in real or personal property.

(b) An unincorporated nonprofit association may be a beneficiary of a trust or contract, a legatee or a devisee.

SECTION 7. STATEMENT OF AUTHORITY AS TO REAL PROPERTY.

(a) In this section, “statement of authority” means a statement authorizing a person to transfer an interest in real property held in the name of an unincorporated nonprofit association.

(b) An interest in real property held in the name of an unincorporated nonprofit association may be transferred by a person authorized to do so in a statement of authority [filed] [recorded] by the association in the office in the [county] in which a transfer of the property would be [filed] [recorded].

(1) the name of the unincorporated nonprofit association;

(2) the address in this state, including the street address, if any, of the association or, if the association does not have an address in this state, its out-of-state address;

(3) that the association is an unincorporated nonprofit association; and

(4) the name, title, or position of a person authorized to transfer an interest in real property held in the name of the association.

(d) A statement of authority must be executed in the same manner as [a deed] [an affidavit] by a person other than the person authorized in the statement to transfer the interest.

(e) A filing officer may collect a fee for [filing] [recording] a statement of authority in the amount authorized for [filing] [recording] a transfer of real property.

(f) A document amending, revoking, or canceling a statement of authority or stating that the statement is unauthorized or erroneous must meet the requirements for executing and [filing] [recording] an original statement.

(g) Unless canceled earlier, a [filed] [recorded] statement of authority and its most recent amendment expire [five] years after the date of the most recent [filing] [recording].

(h) If the record title to real property is in the name of an unincorporated nonprofit association and the statement of authority is [filed] [recorded] in the office of the [county] in which a transfer of the property would be [filed] [recorded], the authority of the person named in the statement to transfer is conclusive in favor of a person that gives value without notice that the person lacks authority.

SECTION 8. LIABILITY.

(a) A debt, obligation, or other liability of an unincorporated nonprofit association~~, whether arising in contract, tort, or otherwise:~~

~~(1)~~ is solely the debt, obligation, or other liability of the association~~; and~~

~~(2) does not become a debt, obligation, or other liability of a member or manager solely because the member acts as a member or the manager acts as a manager~~.

(b) A person’s status as a member or manager does not prevent or restrict law other than this [act] from imposing liability on the person or the association because of the person’s conduct.

Reporters’ Note

Changes to subsection (a) conform to harmonized ULLCA § 304(a).

SECTION 9. ASSERTION AND DEFENSE OF CLAIMS.

(a) An unincorporated nonprofit association may sue or be sued in its own name.

(b) A member or manager may assert a claim the member or manager has against the unincorporated nonprofit association. An association may assert a claim it has against a member or manager.

SECTION 10. EFFECT OF JUDGMENT OR ORDER. A judgment or order against an unincorporated nonprofit association is not by itself a judgment or order against a member or manager.

Reporters’ Note

The rule of this section follows from the fact that a nonprofit association is a separate entity. See Section 5(a). For the same reason, a provision analogous to this section was considered unnecessary in the other unincorporated entity laws, but this section has been included in this act because it emphasizes an important change from the common law treatment of nonprofit associations.

SECTION 11. APPOINTMENT OF AGENT TO RECEIVE SERVICE OF PROCESS.

(a) An unincorporated nonprofit association may ~~file in the office of~~deliver to the [Secretary of State] for filing a statement appointing an agent authorized to receive service of process.

(b) A statement appointing an agent must ~~set forth~~state:

(1) the name of the unincorporated nonprofit association; and

(2) the name of the person in this state authorized to receive service of process and the person’s address, including the street address, in this state.

(c) A statement appointing an agent must be signed ~~and [acknowledged] [sworn to]~~ by a person authorized to manage the affairs of the unincorporated nonprofit association and by the person appointed as the agent. ~~By signing and [acknowledging] [swearing to] the statement the person becomes the agent.~~ The signing of the statement is an affirmation of fact that the person is authorized to manage the affairs of the unincorporated nonprofit association and that the agent has consented to serve.

(d) An amendment to or cancellation of a statement appointing an agent to receive service of process must meet the requirements for ~~executing of~~signing an original statement. An agent may resign by ~~filing~~delivering a resignation into the office of the [Secretary of State] for filing and giving notice to the association.

(e) The [Secretary of State] may collect a fee for filing a statement appointing an agent to receive service of process, an amendment, a cancellation, or a resignation in the amount charged for filing similar documents.

(f) A statement appointing an agent to receive service of pocess takes effect on filing by the [Secretary of State] and is effective for five years after the date of filing unless canceled or terminated earlier.

(g) A statement appointing an agent to receive service of process may not be rejected for filing because the name of the unincorporated nonprofit association signing the statement is not distinguishable on the records of the [Secretary of State] from the name of another entity appearing in those records. The filing of such a statement does not make the name of the unincorporated nonprofit association signing the statement unavailable for use by another entity.

Reporters’ Note

Changes conform to HUB § 1-411 and MORAA § 12.

[SECTION 12. SERVICE OF PROCESS. In an action or proceeding against an unincorporated nonprofit association, process may be served on an agent authorized by appointment to receive service of process, on a manager of the association, or in any other manner authorized by the law of this state.]

SECTION 13. ACTION OR PROCEEDING NOT ABATED BY CHANGE. An action or proceeding against an unincorporated nonprofit association does not abate merely because of a change in its members or managers .

Reporters’ Note

[SECTION 14. VENUE. Unless otherwise provided by law other than this [act], venue of an action against an unincorporated nonprofit association brought in this state is determined under the statutes applicable to an action brought in this state against a corporation.]

SECTION 15. MEMBER NOT AGENT. A member is not an agent of the association solely by reason of being a member.

SECTION 16. APPROVAL BY MEMBERS.

(a) Except as otherwise provided in the governing principles, an unincorporated nonprofit association must have the approval of its members to:

(1) admit, suspend, dismiss, or expel a member;

(2) select or dismiss a manager;

(3) adopt, amend, or repeal the governing principles;

(4) sell, lease, exchange, or otherwise dispose of all, or substantially all, of the association’s property, with or without the association’s goodwill, outside the ordinary course of its activities;

(5) dissolve under section 28(2) or merge under section 30;

(6) undertake any other act outside the ordinary course of the association’s activities; or

(7) determine the policy and purposes of the association.

(b) An unincorporated nonprofit association must have the approval of the members to do any other act or exercise a right that the governing principles require to be approved by members.

SECTION 17. MEETINGS OF MEMBERS; VOTING, NOTICE, AND QUORUMPROCEDURAL REQUIREMENTS.

(a) Unless the governing principles provide otherwise:

(1) approval of a matter by members requires an affirmative majority of the votes cast at a meeting of members; and

(2) each member is entitled to one vote on each matter that is submitted for approval by members.

(b) ~~Notice and quorum requirements for member meetings and the conduct of meetings of members are determined by the governing principles~~. The governing principles may provide for the:

(1) calling, location and timing of meetings of the members;

(2) notice and quorum requirements for member meetings;

(3) conduct of member meetings;

(4) taking of action by the members by consent without a meeting or by ballot; and

(5) participation by members in a meeting of the members by telephone or other means of electronic communication.

(c) If the governing principles do not provide for a matter described in subsection (b), customary usages and principles of parliamentary law and procedure apply.

Reporters’ Note

Subsections (b) and (c) clarify the intent of former subsection (b).

SECTION 18. DUTIES OF MEMBER.

(a) A member does not have aany fiduciary duty to an unincorporated nonprofit association or to another member solely byreason of being a member.

(b) A member shall discharge the duties to the unincorporated nonprofit association and the other members and exercise any rights under this [act] consistent with the governing principles and the contractual obligation of good faith and fair dealing.

Reporters’ Note

Changes to subsection (a) patterned after ULPA § 305(a).

Addition of “contractual” in subsection patterned after ULLCA § 409(d).

SECTION 19. ADMISSION, SUSPENSION, DISMISSAL, OR EXPULSION OF MEMBERS.

(a) A person becomes a member and may be suspended, dismissed, or expelled in accordance with the association’s governing principles. If there are no applicable governing principles, a person may become a member or be suspended, dismissed, or expelled from an association only by a vote of its members. A person may not be admitted as a member without the person’s consent.

(b) Unless the governing principles provide otherwise, the suspension, dismissal, or expulsion of a member does not relieve the member from any unpaid capital contribution, dues, assessments, fees, or other obligation incurred or commitment made by the member before the suspension, dismissal, or expulsion.

SECTION 20. MEMBER’S RESIGNATION .

(a) A member may resign as a member in accordance with the governing principles. In the absence of applicable governing principles, a member may resign at any time.

(b) Unless the governing principles provide otherwise, resignation of a member does not relieve the member from any unpaid capital contribution, dues, assessments, fees, or other obligation incurred or commitment made by the member before resignation.

SECTION 21. MEMBERSHIP INTEREST NOT TRANSFERABLE. Except as otherwise provided in the governing principles, a member’s interest or any right under the governing principles is not transferable.

SECTION 22. SELECTION OF MANAGERS; MANAGEMENT RIGHTS OF MANAGERS. Except as otherwise provided in this [act] or the governing principles:

(1) only the members may select a manager or managers;

(2) a manager may be a member or a nonmember;

(3) if a manager is not selected, all members are managers;

(4) each manager has equal rights in the management and conduct of the association’s activities;

(5) all matters relating to the association’s activities are decided by its managers except for matters reserved for approval by members in section 16; and

(6) a difference among managers is decided by a majority of the managers.

SECTION 23. DUTIES OF MANAGERS.

(a) A manager owes to the unincorporated nonprofit association and to its members the fiduciary duties of loyalty and care.

(b) A manager shall manage the unincorporated nonprofit association in good faith, in a manner the manager reasonably believes to be in the best interests of the association, and with such care, including reasonable inquiry, as a prudent person would reasonably exercise in a similar position and under similar circumstances. A manager may rely in good faith upon any opinion, report, statement, or other information provided by another person that the manager reasonably believes is a competent and reliable source for the information.

(c) After full disclosure of all material facts, a specific act or transaction that would otherwise violate the duty of loyalty by a manager may be authorized or ratified by a majority of the members that are not interested directly or indirectly in the act or transaction.

(d) A manager that makes a business judgment in good faith satisfies the duties specified in subsection (a) if the manager:

(1) is not interested, directly or indirectly, in the subject of the business judgment and is otherwise able to exercise independent judgment;

(2) is informed with respect to the subject of the business judgment to the extent the manager reasonably believes to be appropriate under the circumstances; and

(3) believes that the business judgment is in the best interests of the unincorporated nonprofit association and in accordance with its purposes.

(e) The governing principles in a record may limit or eliminate the liability of a manager to the unincorporated nonprofit association or its members for damages for any action taken, or for failure to take any action, as a manager, except liability for:

(1) the amount of financial benefit improperly received by a manager;

(2) an intentional infliction of harm on the association or one or more of its members;

(3) an intentional violation of criminal law;

(4) breach of the duty of loyalty; or

(5) improper distributions.

SECTION 24. ~~NOTICE AND QUORUM~~PROCEDURAL REQUIREMENTS FOR MEETINGS OF MANAGERS.

~~Notice and quorum requirements for meetings of managers and the conduct of meetings of managers are determined by the~~(a) The governing principles may provide for the:

(1) calling, location and timing of meetings of the managers;

(2) notice and quorum requirements for manager meetings;

(3) conduct of manager meetings;

(4) taking of action by the managers by consent without a meeting; and

(5) participation by managers in a meeting of the managers by telephone or other means of electronic communication.

(b) If the governing principles do not provide for a matter described in subsection (a), customary usages and principles of parliamentary law and procedure apply.

Reporters’s Note

The changes to this section conform to Section 17.

SECTION 25. RIGHT OF MEMBER OR MANAGER TO INFORMATION.

(a) On reasonable notice, a member or manager of an unincorporated nonprofit association may inspect and copy during the unincorporated nonprofit association’s regular operating hours, at a reasonable location specified by the association, any record maintained by the association regarding its activities, financial condition, and other circumstances, to the extent the information is material to the member’s or manager’s rights and duties under the governing principles.

(b) An unincorporated nonprofit association may impose reasonable restrictions on access to and use of information to be furnished under this section, including designating the information confidential and imposing obligations of nondisclosure and safeguarding on the recipient.

(c) An unincorporated nonprofit association may charge a person that makes a demand under this section reasonable copying costs, limited to the costs of labor and materials.

(d) A former member or manager is entitled to information to which the member or manager was entitled while a member or manager if the information pertains to the period during which the person was a member or manager, the former member or manager seeks the information in good faith, and the former member or manager satisfies subsections (a) through (c).

SECTION 26. DISTRIBUTIONS PROHIBITED; COMPENSATION AND OTHER PERMITTED PAYMENTS .

(a) Except as otherwise provided in subsection (b), an unincorporated nonprofit association may not pay dividends or make distributions to a member or manager.

(b) An unincorporated nonprofit association may:

(1) pay reasonable compensation or reimburse reasonable expenses to a member or manager for services rendered;

(2) confer benefits on a member or manager in conformity with its nonprofit purposes;

(3) repurchase a membership and repay a capital contribution made by a member to the extent authorized by its governing principles; or

(4) make distributions of property to members upon winding up and termination to the extent permitted by section 29.

SECTION 27. REIMBURSEMENT; INDEMNIFICATION; ADVANCEMENT OF EXPENSES .

(a) Except as otherwise provided in the governing principles, an unincorporated nonprofit association shall reimburse a member or manager for authorized expenses reasonably incurred in the course of the member’s or manager’s activities on behalf of the association.

(b) An unincorporated nonprofit association may indemnify a member or manager for any debt, obligation, or other liability incurred in the course of the member’s or manager’s activities on behalf of the association if the person seeking indemnification has complied with Sections 18 and 23. Governing principles in a record may broaden or limit indemnification.

(c) If a person is made or threatened to be made a party in an action based on that person’s activities on behalf of an unincorporated nonprofit association and the person makes a request in a record to the association, a majority of the disinterested managers may approve in a record advance payment, or reimbursement, by the association, of all or a part of the reasonable expenses, including attorney’s fees and costs, incurred by the person before the final disposition of the proceeding. To be entitled to an advance payment or reimbursement, the person must state in a record that the person has a good faith belief that the criteria for indemnification in subsection (b) have been satisfied and that the person will repay the amounts advanced or reimbursed if the criteria for payment have not been satisfied. The governing principles in a record may broaden or limit the advance payments or reimbursements.

(d) An unincorporated nonprofit association may purchase insurance on behalf of a member or manager for liability asserted against or incurred by the member or manager in the capacity of a member or manager, whether or not the association has authority under this [act] to reimburse, indemnify, or advance expenses to the member or manager against the liability.

(e) The rights of reimbursement, indemnification, and advancement of expenses under this section apply to a former member or manager for an activity undertaken on behalf of the unincorporated nonprofit association while a member or manager.

SECTION 28. DISSOLUTION.

(a) An unincorporated nonprofit association may be dissolved as follows:

(1) if the governing principles provide a time or method for dissolution, at that time or by that method ;

(2) if the governing principles do not provide a time or method for dissolution, upon approval by the members ;

(3) if no member can be located and the association’s operations have been discontinued for at least three years, by the managers or, if the association has no current manager, by its last manager;

(4) by court order; or

(5) under law other than this act.

(b) After dissolution, an unincorporated nonprofit association continues in existence until its activities have been wound up and it is terminated pursuant to section 29.

SECTION 29. WINDING UP AND TERMINATION. Winding up and termination of an unincorporated nonprofit association must proceed in accordance with the following rules:

(1) All known debts and liabilities must be paid or adequately provided for.

(2) Any property subject to a condition requiring return to the person designated by the donor must be transferred to that person.

(3) Any property subject to a trust must be distributed in accordance with the trust agreement.

(4) Any remaining property must be distributed as follows:

(A) as required by law other than this [act] that requires assets of an association to be distributed to another person with similar nonprofit purposes;

(B) in accordance with the association’s governing principles or in the absence of applicable governing principles, to the members of the association per capita or as the members direct; or

SECTION 30. MERGERS.

(a) In this section:

~~(1) “Constituent organization” means an organization that is merged with one or more other organizations including the surviving organization.~~

~~(2) “Nonsurviving organization” means a constituent organization that is not the surviving organization.~~

(3) “Organization” means an unincorporated nonprofit association, a general partnership, including a limited liability partnership, limited partnership, including a limited liability limited partnership, limited liability company, business or statutory trust, corporation, or any other legal or commercial entity having a statute governing its formation and operation. The term includes a for-profit or nonprofit organization.

~~(4) “Surviving organization” means an organization into which one or more other organizations are merged.~~

(1) “Entity” means a person that has a statute governing its formation and operation or that has the power to acquire an interest in real property in its own name other than:

(A) an individual;

(B) a testamentary, inter vivos, or charitable trust, except a statutory trust, business trust or common-law business trust;

(C) an association or relationship that is not a partnership solely by reason of [Section 202(c) of the Uniform Partnership Act (1997)] or a similar provision of the law of another jurisdiction;

(D) a decedent’s estate; or

(E) a government or a governmental subdivision, agency, or instrumentality.

(2) “Merging entity” means an entity that is a party to a merger and exists immediately before the merger becomes effective.

(3) “Organic rules” means the public organic record and private organic rules of an entity.

(4) “Private organic rules” means the rules, whether or not in a record, that govern the internal affairs of an entity, are binding on all of its interest holders, and are not part of its public organic record, if any.

(5) “Public organic record” means the record the filing of which by the [Secretary of State] forms an entity, and any amendment to or restatement of that record.

(6) “Surviving entity” means the entity that continues in existence after or is created by a merger.

(7) “Transfer” includes an assignment, conveyance, sale, lease, encumbrance, including by mortgaging or granting a security interest, gift, and transfer by operation of law.

(b) An unincorporated nonprofit association may ~~merge~~be a merging entity or surviving entity in a merger with any ~~organization~~entity that is authorized by law to merge with an unincorporated nonprofit association.

(1) Each constituent ~~organization~~entity shall comply with its governing law.

(2) Each party to the merger shall approve a plan of merger. The plan, which must be in a record, must include the following provisions:

(A) the name and form of each ~~organization~~entity that is a party to the merger;

(B) the name and form of the surviving ~~organization~~entity and, if the surviving ~~organization~~entity is to be created by the merger, a statement to that effect;

(C) if the surviving ~~organization~~entity is to be created by the merger, the surviving ~~organization’s organizational documents~~entity’s organic rules that are proposed to be in a record;

(D) if the surviving ~~organization~~entity is not to be created by the merger, any amendments to be made by the merger to the surviving ~~organization’s organizational documents~~entity’s organic rules that are, or are proposed to be, in a record; and

(E) the terms and conditions of the merger, including the manner and basis for converting the interests in each ~~constituent organization~~merging entity into any combination of money, interests in the surviving ~~organization~~entity, and other consideration except that the plan of merger may not permit members of an unincorporated nonprofit association to receive merger consideration if a distribution of such consideration would not be permitted in the absence of a merger under Sections 26 and 29.

(3) The plan of merger must be approved by the members of each unincorporated nonprofit association that is a ~~constituent organization in the merger~~merging entity. If a plan of merger would impose personal liability for an obligation of ~~a constituent or surviving organization~~an entity on a member of an association that is a ~~party to the merger~~merging entity, the plan may not take effect unless it is approved in a record by the member.

(4) Subject to the contractual rights of third parties, after a plan of merger is approved and at any time before the merger is effective, a ~~constituent organization~~merging entity may amend the plan or abandon the merger as provided in the plan, or except as otherwise prohibited in the plan, with the same consent as was required to approve the plan.

(5) Following approval of the plan, a merger under this section is effective:

(A) if a ~~constituent organization~~merging entity is required to give notice to or obtain the approval of a governmental agency or officer in order to be a party to a merger, when the notice has been given and the approval has been obtained; and

(B) if the surviving ~~organization~~entity:

(i) is an unincorporated nonprofit association, as specified in the plan of merger and upon compliance by any ~~constituent organization~~merging entity that is not an association with any requirements, including any required filings in the [office of the Secretary of State], of the ~~organization’s~~entity’s governing statute; or

(ii) is not an unincorporated nonprofit association, as provided by the statute governing the surviving ~~organization~~entity.

(d) When a merger becomes effective:

(1) the surviving ~~organization~~entity continues or comes into existence;

(2) each ~~constituent organization that merges into the surviving organization~~merging entity that is not the surviving entity ceases to exist ~~as a separate entity~~;

(3) all property ~~owned by each constituent organization that ceases to exist~~of each merging entity vests in the surviving ~~organization~~entity without transfer, reversion, or impairment;

(4) all debts, obligations, or other liabilities of each ~~nonsurviving organization~~merging entity continue as debts, obligations, or other liabilities of the surviving ~~organization~~entity;

(5) ~~an action or proceeding pending by or against any nonsurviving organization may be continued as if the merger had not occurred~~the name of the surviving entity may be substituted for the name of any merging entity that is a party to any pending action or proceeding;

(6) except as ~~prohibited~~otherwise provided by law other than this [act], all of the rights, privileges, immunities, powers, and purposes of each ~~constituent organization that ceases to exist~~merging entity vest in the surviving ~~organization~~entity;

(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;

(8) the merger does not affect the personal liability, if any, of a member or manager of a ~~constituent organization~~merging entity for a debt, obligation, or other liability incurred before the merger is effective; and

(9) a surviving ~~organization~~entity that is not organized in this state is subject to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed by a ~~constituent organization~~merging entity, if before the merger the ~~constituent organization~~merging entity was subject to suit in this state for the debt, obligation, or other liability.

(e) Property held for a charitable purpose under the law of this state by a ~~constituent organization~~merging entity immediately before a merger under this section becomes effective may not, as a result of the merger, be diverted from the objects for which it was ~~given~~donated, granted, or devised, unless, to the extent required by or pursuant to the law of this state concerning cy pres or other law dealing with nondiversion of charitable assets, the ~~organization~~entity obtains an appropriate order of [name of court] [the attorney general] specifying the disposition of the property.

(f) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to a ~~nonsurviving organization~~merging entity that is not the surviving entity and that takes effect or remains payable after the merger inures to the surviving ~~organization~~entity. A trust obligation that would govern property if transferred to the nonsurviving ~~organization~~entity applies to property that is transferred to the surviving ~~organization~~entity under this section.

Reporters’ Note

Subsection (a). Definitions of “entity,” “organic rules,” “private organic rules,” and “public organic record” patterned after MORAA § 2. Definitions of “merging entity,” “surviving entity,” and “transfer” patterned after META § 102.

[SECTION 31. TRANSITION CONCERNING REAL AND PERSONAL PROPERTY.

(a) If, before [the effective date of this [act]], an interest in property was by terms of a transfer purportedly transferred to an unincorporated nonprofit association but under the law of this state the interest did not vest in the association, or in one or more persons on behalf of the association under subsection (b), on [the effective date of this [act]] the interest vests in the association, unless the parties to the transfer have treated the transfer as ineffective.

(b) If, before [the effective date of this [act]], an interest in property was by terms of a transfer purportedly transferred to an unincorporated nonprofit association but the interest was vested in one or more persons to hold the interest for members of the association, on or after [the effective date of this [act]] the persons, or their successors in interest, may transfer the interest to the association in its name, or the association may require that the interest be transferred to it in its name.]

SECTION 32. UNIFORMITY OF APPLICATION AND CONSTRUCTION. In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

SECTION 33. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. This [act] modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. section 7001, et seq., but does not modify, limit, or supersede section 101(c) of that act, 15 U.S.C. section 7001(c), or authorize electronic delivery of any of the notices described in section 103(b) of that act, 15 U.S.C. section 7003(b).

SECTION 34. SAVINGS CLAUSE. This [act] does not affect an action or proceeding commenced or right accrued before this [act] takes effect.

SECTION 35. REPEALS. The following are repealed: _______.

SECTION 36. EFFECTIVE DATE. This [act] takes effect _________________.