Iowa Code 501A.1101 – Merger and consolidation
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1.
Authorization.
Unless otherwise prohibited, cooperatives organized under the laws of this state, including cooperatives organized under this chapter or traditional cooperatives, may merge or consolidate with each other, or another business entity organized under the laws of another state, by complying with the provisions of this section and the law of the state where the surviving or new business entity will exist. A cooperative shall not merge or consolidate with a business entity organized under the laws of this state, other than a traditional cooperative, unless the law governing the business entity expressly authorizes merger or consolidation with a cooperative. This subsection does not authorize a foreign business entity to do any act not authorized by the law governing the foreign business entity.
Terms Used In Iowa Code 501A.1101
- Alternative voting method: means a method of voting other than a written ballot, including voting by electronic, telephonic, internet, or other means that reasonably allows members the opportunity to vote. See Iowa Code 501A.102
- Articles: means the articles of organization of a cooperative as originally filed or subsequently amended as provided in this chapter. See Iowa Code 501A.102
- Board: means the board of directors of a cooperative. See Iowa Code 501A.102
- Business entity: means a person organized under statute or common law in this state or another jurisdiction for purposes of engaging in a commercial activity on a profit, cooperative, or not-for-profit basis, including but not limited to a corporation or entity taxed as a corporation under the Internal Revenue Code, nonprofit corporation, cooperative or cooperative association, partnership, limited partnership, limited liability company, limited liability partnership, investment company, joint stock company, joint stock association, or trust, including but not limited to a business trust. See Iowa Code 501A.102
- Cooperative: means a business association organized under this chapter. See Iowa Code 501A.102
- Domestic cooperative: means a cooperative association or other cooperative organized under this chapter or chapter 497, 498, 499, 499A, or 501. See Iowa Code 501A.102
- 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
- Foreign business entity: means a business entity that is not a domestic business entity. See Iowa Code 501A.102
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Member: means a person or entity reflected on the books of a cooperative as the owner of governance rights of a membership interest of the cooperative and includes patron and nonpatron members. See Iowa Code 501A.102
- Patron: means a person or entity who conducts patronage with the cooperative, regardless of whether the person is a member. See Iowa Code 501A.102
- property: includes personal and real property. See Iowa Code 4.1
- Quorum: The number of legislators that must be present to do business.
- Secretary: means the secretary of state. See Iowa Code 501A.102
- 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
- Traditional cooperative: means a cooperative or cooperative association organized under chapter 497, 498, 499, 499A, or 501. See Iowa Code 501A.102
2.
Plan.
To initiate a merger or consolidation of a cooperative, a written plan of merger or consolidation shall be prepared by the board or by a committee selected by the board to prepare a plan. The plan shall state all of the following:
a. The names of each constituent domestic cooperative that is a party to the merger and any foreign business entity that is a party to the merger.
b. The name of the surviving or new domestic cooperative or foreign business entity.
c. The manner and basis of converting membership or ownership interests of the constituent domestic cooperative or foreign business entity into membership or ownership interests in the surviving or new domestic cooperative or foreign business entity.
d. The terms of the merger or consolidation.
e. The proposed effect of the merger or consolidation on the members and patron members of each constituent domestic cooperative.
f. For a consolidation, the plan shall contain the articles of the entity or organizational documents to be filed with the state in which the entity is organized.
3.
Notice.
The following shall apply to notice:
a. The board shall mail or otherwise transmit or deliver notice of the merger or consolidation to each member. The notice shall contain the full text of the plan, and the time and place of the meeting at which the plan will be considered.
b. A cooperative with more than two hundred members may provide the notice in the same manner as a regular members’ meeting notice.
4.
Adoption of plan.
a. A plan of merger or consolidation shall be adopted by a domestic cooperative as provided in this subsection.
b. The plan of merger or consolidation is adopted if all of the following apply:
(1) A quorum of the members eligible to vote is registered as being present at the meeting or voting by mail ballot or alternative voting method.
(2) The plan is approved by the patron members, or if otherwise provided in the articles or bylaws, is approved by a majority of the votes cast in each class of votes cast. For a domestic cooperative with articles or bylaws requiring more than a majority of the votes cast or other conditions for approval, the plan must be approved by a proportion of the votes cast or a number of total members as required by the articles or bylaws and the conditions for approval in the articles or bylaws have been satisfied.
c. After the plan has been adopted, articles of merger or consolidation stating the plan and that the plan was adopted according to this subsection shall be signed by the chairperson, vice chairperson, or records officer of each cooperative merging or consolidating.
d. The articles of merger or consolidation shall be filed in the office of the secretary.
e. For a merger, the articles of the surviving domestic cooperative subject to this chapter are deemed amended to the extent provided in the articles of merger.
f. Unless a later date is provided in the plan, the merger or consolidation is effective when the articles of merger or consolidation are filed in the office of the secretary or the appropriate office of another jurisdiction.
g. The secretary shall issue a certificate of organization of the merged or consolidated cooperative.
5.
Effect of merger or consolidation.
The effect of a merger or consolidation shall be as follows:
a. After the effective date, each domestic cooperative and any foreign business entity that is a party to the plan become a single entity. For a merger, the surviving business entity is the business entity designated in the plan. For a consolidation, the new domestic cooperative or new foreign business entity is the business entity provided for in the plan. Except for the surviving or new domestic cooperative, or foreign business entity, the separate existence of each merged or consolidated domestic or foreign business entity that is a party to the plan ceases on the effective date of the merger or consolidation.
b. The surviving or new domestic cooperative or foreign business entity possesses all of the rights and property of each of the merged or consolidated business entities and is responsible for all their obligations. The title to property of the merged or consolidated domestic cooperative, or foreign business entity, is vested in the surviving or new domestic cooperative or foreign business entity without reversion or impairment of the title caused by the merger or consolidation.