1. When a merger becomes effective, all of the following apply:

 a. The domestic or foreign corporation or eligible entity that is designated in the plan of merger as the survivor continues or comes into existence, as the case may be.
 b. The separate existence of every domestic or foreign corporation or eligible entity that is a party to the merger, other than the survivor, ceases.
 c. All property owned by, and every contract right possessed by, each domestic or foreign corporation or eligible entity that is a party to the merger, other than the survivor, are the property and contract rights of the survivor without transfer, reversion, or impairment.
 d. All debts, obligations, and other liabilities of each domestic or foreign corporation or eligible entity that is a party to the merger, other than the survivor, are debts, obligations, or liabilities of the survivor.
 e. The name of the survivor may, but need not be, substituted in any pending proceeding for the name of any party to the merger whose separate existence ceased in the merger.
 f. If the survivor is a domestic entity, the articles of incorporation and bylaws or the organic rules of the survivor are amended to the extent provided in the plan of merger.
 g. The articles of incorporation and bylaws or the organic rules of a survivor that is a domestic entity and is created by the merger become effective.
 h. The shares of each domestic or foreign corporation that is a party to the merger, and the eligible interests in an eligible entity that is a party to a merger, that are to be converted in accordance with the terms of the merger into shares, or other securities, eligible interests, obligations, rights to acquire shares, other securities, or eligible interests, cash, other property, or any combination of the foregoing, are converted, and the former holders of such shares or eligible interests are entitled only to the rights provided to them by those terms or to any rights they may have under subchapter XIII or the organic law governing the eligible entity or foreign corporation.
 i. Except as provided by law or the terms of the merger, all the rights, privileges, franchises, and immunities of each entity that is a party to the merger, other than the survivor, are the rights, privileges, franchises, and immunities of the survivor.
 j. If the survivor exists before the merger, all of the following apply:

 (1) All the property and contract rights of the survivor remain its property and contract rights without transfer, reversion, or impairment.
 (2) The survivor remains subject to all its debts, obligations, and other liabilities.
 (3) Except as provided by law or the plan of merger, the survivor continues to hold all of its rights, privileges, franchises, and immunities.
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Terms Used In Iowa Code 490.1107

  • Appraisal: A determination of property value.
  • Articles of incorporation: means the articles of incorporation described in section 490. See Iowa Code 490.140
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Bequest: Property gifted by will.
  • Contract: A legal written agreement that becomes binding when signed.
  • 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.
  • Devise: To gift property by will.
  • Eligible entity: means a domestic or foreign unincorporated entity or a domestic or foreign nonprofit corporation. See Iowa Code 490.140
  • Eligible interests: means interests or memberships. See Iowa Code 490.140
  • Entity: includes a domestic and foreign business corporation; domestic and foreign nonprofit corporation; estate; trust; domestic and foreign unincorporated entity; and a state, the United States, and a foreign government. See Iowa Code 490.140
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Governor: means any person under whose authority the powers of an entity are exercised and under whose direction the activities and affairs of the entity are managed pursuant to the organic law governing the entity and its organic rules. See Iowa Code 490.140
  • Interest: means either or both of the following rights under the organic law governing an unincorporated entity:
     a. See Iowa Code 490.140
  • Interest holder: means a person who holds of record an interest. See Iowa Code 490.140
  • Interest holder liability: means any of the following:
     (1) Personal liability for a debt, obligation, or other liability of a domestic or foreign corporation or eligible entity that is imposed on a person by any of the following:
     (a) Solely by reason of the person's status as a shareholder, member, or interest holder. See Iowa Code 490.140
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Merger: means a transaction pursuant to section 490. See Iowa Code 490.140
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Organic law: means the statute governing the internal affairs of a domestic or foreign business or nonprofit corporation or unincorporated entity. See Iowa Code 490.140
  • Organic rules: means the public organic record and private organic rules of a domestic or foreign corporation or eligible entity. See Iowa Code 490.140
  • Person: means a person as defined in section 4. See Iowa Code 490.140
  • Plan: means a plan of domestication, conversion, merger, or share exchange. See Iowa Code 490.120
  • Proceeding: includes a civil suit and criminal, administrative, and investigatory action. See Iowa Code 490.140
  • property: includes personal and real property. See Iowa Code 4.1
  • Secretary: means the corporate officer to whom the board of directors has delegated responsibility under section 490. See Iowa Code 490.140
  • Service of process: The service of writs or summonses to the appropriate party.
  • Share exchange: means a transaction pursuant to section 490. See Iowa Code 490.140
  • Shares: means the units into which the proprietary interests in a domestic or foreign corporation are divided. See Iowa Code 490.140
  • state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
 2. When a share exchange becomes effective, the shares or eligible interests in the acquired entity that are to be exchanged for shares or other securities, eligible interests, obligations, rights to acquire shares, other securities or eligible interests, cash, other property, or any combination of the foregoing, are entitled only to the rights provided to them in the plan of share exchange or to any rights they may have under subchapter XIII or under the organic law governing the acquired entity.
 3. Except as otherwise provided in the articles of incorporation of a domestic corporation or the organic law governing or organic rules of a foreign corporation or a domestic or foreign eligible entity, the effect of a merger or share exchange on interest holder liability is as follows:

 a. A person who becomes subject to new interest holder liability in respect of an entity as a result of a merger or share exchange shall have that new interest holder liability only in respect of interest holder liabilities that arise after the merger or share exchange becomes effective.
 b. If a person had interest holder liability with respect to a party to the merger or the acquired entity before the merger or share exchange becomes effective with respect to shares or eligible interests of such party or acquired entity which were exchanged in the merger or share exchange, were canceled in the merger, or the terms and conditions of which relating to interest holder liability were amended pursuant to the merger, then all of the following apply:

 (1) The merger or share exchange does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the merger or share exchange becomes effective.
 (2) The provisions of the organic law governing any entity for which the person had that prior interest holder liability shall continue to apply to the collection or discharge of any interest holder liabilities preserved by subparagraph (1), as if the merger or share exchange had not occurred.
 (3) The person shall have such rights of contribution from other persons as are provided by the organic law governing the entity for which the person had that prior interest holder liability with respect to any interest holder liabilities preserved by subparagraph (1), as if the merger or share exchange had not occurred.
 (4) The person shall not, by reason of such prior interest holder liability, have interest holder liability with respect to any interest holder liabilities that arise after the merger or share exchange becomes effective.
 c. If a person has interest holder liability both before and after a merger becomes effective with unchanged terms and conditions with respect to the entity that is the survivor by reason of owning the same shares or eligible interests before and after the merger becomes effective, the merger has no effect on such interest holder liability.
 d. A share exchange has no effect on interest holder liability related to shares or eligible interests of the acquired entity that were not exchanged in the share exchange.
 4. Upon a merger becoming effective, a foreign corporation, or a foreign eligible entity, that is the survivor of the merger is deemed to have done all of the following:

 a. Appointed the secretary of state as its agent for service of process in a proceeding to enforce the rights of shareholders of each domestic corporation that is a party to the merger who exercise appraisal rights.
 b. Agreed that it will promptly pay the amount, if any, to which such shareholders are entitled under subchapter XIII.
 5. Except as provided in the organic law governing a party to a merger or in its articles of incorporation or organic rules, the merger does not give rise to any rights that an interest holder, governor, or third party would have upon a dissolution, liquidation, or winding up of that party. The merger does not require a party to the merger to wind up its affairs and does not constitute or cause its dissolution or termination.
 6. Property held for a charitable purpose under the law of this state by a domestic or foreign corporation or eligible entity immediately before a merger becomes effective shall not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred except and to the extent permitted by or pursuant to the laws of this state addressing cy pres or dealing with nondiversion of charitable assets.
 7. A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance which is made to an entity that is a party to a merger that is not the survivor and which takes effect or remains payable after the merger inures to the survivor.
 8. A trust obligation that would govern property if transferred to a nonsurviving entity applies to property that is transferred to the survivor after a merger becomes effective.
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