In the case of a membership nonprofit corporation that is a constituent organization, the plan of merger shall be adopted in the following manner:

(a) The plan of merger shall first be adopted by the board of directors.
lawyer at desk

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Alabama Code 10A-3A-12.03

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • certificate of incorporation: as used in this chapter is synonymous to the term certificate of formation used in Chapter 1. See Alabama Code 10A-3A-1.02
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • following: means next after. See Alabama Code 1-1-1
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • property: includes both real and personal property. See Alabama Code 1-1-1
  • Quorum: The number of legislators that must be present to do business.
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
  • writing: includes typewriting and printing on paper. See Alabama Code 1-1-1
(b) Except as provided in subsection (h), the plan of merger shall then be approved by the members entitled to vote thereon. In submitting the plan of merger to the members for approval, the board of directors shall recommend that the members approve the plan of merger, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make a recommendation, in which case the board of directors shall inform the members of the basis for its so proceeding.
(c) The board of directors may set conditions for the approval of the plan of merger by the members or the effectiveness of the plan of merger.
(d) If the plan of merger is required to be approved by the members, and if the approval is to be given at a meeting, the membership nonprofit corporation shall notify each member who is entitled to vote, of the meeting of the members at which the plan of merger is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger and must contain or be accompanied by a copy or summary of the plan of merger. If the membership nonprofit corporation is to be merged into an existing nonprofit corporation, foreign nonprofit corporation, or other organization, the notice must also include or be accompanied by a copy or summary of the certificate of incorporation and bylaws or the organizational documents of that nonprofit corporation, foreign nonprofit corporation, or other organization. If the membership nonprofit corporation is to be merged with a nonprofit corporation, foreign nonprofit corporation, or other organization and a new nonprofit corporation, foreign nonprofit corporation, or organization is to be created pursuant to the merger, the notice must include or be accompanied by a copy or a summary of the certificate of incorporation and bylaws or the organizational documents of the new nonprofit corporation, foreign nonprofit corporation, or other organization.
(e) Unless the certificate of incorporation, or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater quorum, approval of the plan of merger requires the approval of the members entitled to vote at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the plan of merger, and, if any class of membership interests entitled to vote as a separate group on the plan of merger, the approval of each separate voting group at a meeting at which a quorum of the voting group is present consisting of a majority of the votes entitled to be cast on the merger by that voting group.
(f) Subject to subsection (g), separate voting by voting groups is required:

(1) on a plan of merger, by each class of membership interests that:

(i) are to be converted under the plan of merger into securities, interests, obligations, rights to acquire other securities or interests, cash, other property, or any combination of the foregoing; or
(ii) are entitled to vote as a separate group on a provision in the plan of merger that constitutes a proposed amendment to the certificate of incorporation of a surviving nonprofit corporation that requires action by separate voting groups under Section 10A-3A-9.04; and
(2) on a plan of merger, if the voting group is entitled under the certificate of incorporation or bylaws to vote as a voting group to approve a plan of merger, respectively.
(g) The certificate of incorporation may expressly limit or eliminate the separate voting rights provided in subsection (f)(1)(i) and subsection (f)(2) as to any class of membership, except when the plan of merger includes what is or would be in effect an amendment subject to subsection (f)(1)(ii).
(h) Unless the certificate of incorporation otherwise provides, approval by the membership nonprofit corporation’s members of a plan of merger is not required if:

(1) the membership nonprofit corporation will survive the merger;
(2) except for amendments that do not require member approval under Section 10A-3A-9.03(g) or the approval of a person or group of persons under Section 10A-3A-9.30, its certificate of incorporation will not be changed;
(3) except for amendments that do not require member approval under Section 10A-3A-9.22 or the approval of a person or group of persons under Section 10A-3A-9.30, its bylaws will not be changed; and
(4) each member of the membership nonprofit corporation whose membership interest was outstanding immediately before the effective date of the merger will hold the same number of membership interests, with identical preferences, rights, and limitations, immediately after the effective date of the merger.
(i) In addition to the adoption and approval of the plan of merger as required by this section, the plan must also be approved in writing by a person or group of persons, if any, whose approval is required under Section 10A-3A-12.08.
  Previous section
Next section  
 Article 12 Contents