AR SB142

For-profit corporations may convert to nonprofit corporations under either the Arkansas Nonprofit Corporation Act (§§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224) or the Arkansas Nonprofit Corporation Act of 1993 (§ 4-33-101 et seq.) by filing an amendment to their articles of incorporation.

Conversion requires approval by a three-fourths (3/4) vote of the for-profit corporation's shareholders.

Articles of incorporation for converting corporations must include a statement that the entity is a nonprofit corporation and has converted under the applicable nonprofit act, plus a description of how shares of stock will be treated (exchanged for memberships or canceled).

Conversion becomes effective when the amendment to articles of incorporation is filed with the Secretary of State and all required filing fees, service fees, and copying fees are collected.

An emergency clause declares the law effective immediately upon the Governor's approval to eliminate tax consequence uncertainties and prevent harm to businesses converting in Arkansas.