Texas Business Organizations Code 10.006 – Short Form Merger
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(a) A parent organization that owns at least 90 percent of the outstanding ownership or membership interests of each class and series of each of one or more subsidiary organizations may merge with one or more of the subsidiary organizations as provided by this section if:
(1) at least one of the parties to the merger is a domestic entity and each other party is a domestic entity or another non-code organization organized under the laws of a jurisdiction that permits a merger of the type authorized by this chapter; and
(2) the resulting organization or organizations are the parent organization, one or more existing subsidiary organizations, or one or more new organizations.
(b) No action by any subsidiary organization that is a domestic entity is required to approve the merger.
Terms Used In Texas Business Organizations Code 10.006
- Domestic: means , with respect to an entity, that the entity is formed under this code or the entity's internal affairs are governed by this code. See Texas Business Organizations Code 1.002
- Domestic entity: means an organization formed under or the internal affairs of which are governed by this code. See Texas Business Organizations Code 1.002
- Entity: means a domestic entity or foreign entity. See Texas Business Organizations Code 1.002
- Governing authority: means a person or group of persons who are entitled to manage and direct the affairs of an entity under this code and the governing documents of the entity, except that if the governing documents of the entity or this code divide the authority to manage and direct the affairs of the entity among different persons or groups of persons according to different matters, "governing authority" means the person or group of persons entitled to manage and direct the affairs of the entity with respect to a matter under the governing documents of the entity or this code. See Texas Business Organizations Code 1.002
- Governing documents: means :
(A) in the case of a domestic entity:
(i) the certificate of formation for a domestic filing entity or the document or agreement under which a domestic nonfiling entity is formed; and
(ii) the other documents or agreements adopted by the entity under this code to govern the formation or the internal affairs of the entity; or
(B) in the case of a foreign entity, the instruments, documents, or agreements adopted under the law of its jurisdiction of formation to govern the formation or the internal affairs of the entity. See Texas Business Organizations Code 1.002 - 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.
- Membership interest: means a member's interest in an entity. See Texas Business Organizations Code 1.002
- Merger: means :
(A) the division of a domestic entity into two or more new domestic entities or other organizations or into a surviving domestic entity and one or more new domestic or foreign entities or non-code organizations; or
(B) the combination of one or more domestic entities with one or more domestic entities or non-code organizations resulting in:
(i) one or more surviving domestic entities or non-code organizations;
(ii) the creation of one or more new domestic entities or non-code organizations; or
(iii) one or more surviving domestic entities or non-code organizations and the creation of one or more new domestic entities or non-code organizations. See Texas Business Organizations Code 1.002 - Non-code organization: means an organization other than a domestic entity. See Texas Business Organizations Code 1.002
- Organization: means a corporation, limited or general partnership, limited liability company, business trust, real estate investment trust, joint venture, joint stock company, cooperative, association, bank, insurance company, credit union, savings and loan association, or other organization, regardless of whether the organization is for-profit, nonprofit, domestic, or foreign. See Texas Business Organizations Code 1.002
- Parent: means an organization that, directly or indirectly through or with one or more of its subsidiaries:
(A) owns at least 50 percent of the outstanding ownership or membership interests of another organization; or
(B) possesses at least 50 percent of the voting power of the owners or members of another organization. See Texas Business Organizations Code 1.002 - Party to the merger: means a domestic entity or non-code organization that under a plan of merger is divided or combined by a merger. See Texas Business Organizations Code 1.002
- Person: means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002
- Plan of merger: means a document that conforms with the requirements of Sections Texas Business Organizations Code 1.002
- Property: includes tangible and intangible property and an interest in that property. See Texas Business Organizations Code 1.002
- Subsidiary: means an organization for which another organization, either directly or indirectly through or with one or more of its other subsidiaries:
(A) owns at least 50 percent of the outstanding ownership or membership interests of the organization; or
(B) possesses at least 50 percent of the voting power of the owners or members of the organization. See Texas Business Organizations Code 1.002
(c) If the parent organization will not survive the merger, a plan of merger must be adopted by action of the parent organization in the same manner as a plan of merger not governed by this section or § 10.005.
(d) If the parent organization will survive the merger, the merger is required to be approved only by a resolution adopted by the governing authority of the parent organization.
(e) Sections 10.001(c)-(e), 10.002(c), 10.003, and 10.007-10.010 apply to a merger approved under Subsection (d), except that the resolution approving the merger should be considered the plan of merger for purposes of those sections.
(f) The resolution approving the merger under Subsection (d) must describe:
(1) the basic terms of the merger;
(2) the organizations that are party to the merger; and
(3) the organizations that survive the merger.
(g) If the parent organization does not own all of the outstanding ownership or membership interests of each class or series of ownership or membership interests of each subsidiary organization that is a party to the merger, the resolution of the parent organization required by Subsection (d) must describe the terms of the merger, including the cash or other property, including ownership or membership interests, obligations, rights to purchase securities, or other securities of any person or organization or any combination of the ownership or membership interests, obligations, rights, or other securities, to be used, paid, or delivered by the parent organization on surrender of each ownership or membership interest of the subsidiary organizations not owned by the parent organization.
(h) An entity is not disqualified from effecting a merger under any other provision of this chapter because it qualifies for a merger under this section.
(i) This section shall not apply if a subsidiary organization that is a party to the merger is:
(1) a partnership; or
(2) a domestic entity that has in its governing documents the provision required by § 10.005(d)(1) and of which there are outstanding ownership or membership interests that would be entitled to vote on the merger absent this section.