Approval of conversion

(1) A plan of conversion does not take effect unless: (a) a domestic converting entity approves the plan of conversion: (i) in accordance with the requirements, if any, in the domestic converting entity's organic rules for approval of a conversion; (ii) if the domestic converting entity's organic rules do not provide for the approval of a conversion, in accordance with the requirements, if any, in the converting entity's organic law and organic rules for the approval of: (A) for an entity that is not a business corporation or a limited cooperative association, a merger, as if the conversion were a merger; (B) for a business corporation, a merger requiring approval by a vote of the interest holders of the business corporation, as if the conversion were that type of merger; and (C) for a limited cooperative association, a transaction authorized under this part; or (iii) by each interest holder of the entity that is entitled to vote on or consent to any matter if: (A) for an entity that is not a business corporation or a limited cooperative association, the entity's organic law and organic rules do not provide for the approval of a conversion or a merger; or (B) for a limited cooperative association, the limited cooperative association's organic law and organic rules do not provide for the approval of a conversion or a transaction under this part; (b) each interest holder of a domestic converting entity that will have interest holder liability for a debt, obligation, or other liability that the domestic converting entity incurs after the conversion approves the plan of conversion in a record; and (c) for an entity that is not a business corporation or a nonprofit corporation, the entity complies with the provisions of Subsection (1)(b), unless: (i) the organic rules of the entity contain a provision that provides in a record for the approval of an interest exchange or a merger in which some or all of the entity's interest holders become subject to interest holder liability by the vote or consent of fewer than all the interest holders; and (ii) the interest holders consent in a record to or vote for the provision described in Subsection (1)(c)(i) or became an interest holder after the adoption of the provision. (2) A conversion of a foreign converting entity does not take effect until the foreign entity approves the conversion in accordance with the law of the foreign entity's jurisdiction of formation.