Virginia Code 13.1-717: Share exchange.
A. Through a share exchange:
Terms Used In Virginia Code 13.1-717
- Acquired entity: means the domestic or foreign corporation or eligible entity that will have all of one or more classes or series of shares or eligible interests acquired in a share exchange. See Virginia Code 13.1-715.1
- Acquiring entity: means the domestic or foreign corporation or eligible entity that will acquire all of one or more classes or series of shares or eligible interests of the acquired entity in a share exchange. See Virginia Code 13.1-715.1
- 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.
- Articles of incorporation: means all documents constituting, at any particular time, the charter of a corporation. See Virginia Code 13.1-603
- 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.
- Dependent: A person dependent for support upon another.
- domestic corporation: means a corporation authorized by law to issue shares, irrespective of the nature of the business to be transacted, organized under this chapter or existing pursuant to the laws of the Commonwealth on January 1, 1986, or which, by virtue of articles of incorporation, amendment, or merger, has become a domestic corporation of the Commonwealth, even though also being a corporation organized under laws other than the laws of the Commonwealth, or that has become a domestic corporation of the Commonwealth pursuant to Article 12. See Virginia Code 13.1-603
- Eligible entity: means a domestic or foreign unincorporated entity or a domestic or foreign nonstock corporation. See Virginia Code 13.1-603
- Eligible interests: means interests or memberships. See Virginia Code 13.1-603
- Entity: includes any domestic or foreign corporation; any domestic or foreign nonstock corporation; any domestic or foreign unincorporated entity; any estate or trust; and any state, the United States and any foreign government. See Virginia Code 13.1-603
- Foreign corporation: means a corporation authorized by law to issue shares, organized under laws other than the laws of the Commonwealth. See Virginia Code 13.1-603
- 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.
- Jurisdiction of formation: means the state or country the law of which includes the organic law governing a domestic or foreign corporation or eligible entity. See Virginia Code 13.1-603
- Merger: means a business combination pursuant to § Virginia Code 13.1-715.1
- Organic law: means the statute governing the internal affairs of a domestic or foreign corporation or eligible entity. See Virginia Code 13.1-603
- Organic rules: means the public organic record and private organic rules of a domestic or foreign corporation or eligible entity. See Virginia Code 13.1-603
- Party to a share exchange: means any domestic or foreign corporation or eligible entity that is an acquired entity or an acquiring entity under a plan of share exchange. See Virginia Code 13.1-715.1
- Share exchange: means a transaction pursuant to § Virginia Code 13.1-603
- Shares: means the units into which the proprietary interests in a corporation are divided. See Virginia Code 13.1-603
1. A domestic corporation may acquire all of the shares of one or more classes or series of shares of another domestic or foreign corporation, or all of the eligible interests of one or more classes or series of eligible interests of a domestic or foreign eligible entity, as well as rights to acquire any such shares or eligible interests, in exchange 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, pursuant to a plan of share exchange; or
2. All of the shares of one or more classes or series of shares of a domestic corporation, as well as rights to acquire any such shares, may be acquired by another domestic or foreign corporation or other eligible entity, in exchange 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, pursuant to a plan of share exchange.
B. A foreign corporation or eligible entity may be a party to a share exchange only if the share exchange is permitted by the organic law under which the corporation or eligible entity is organized or by which it is governed.
C. If the organic law or organic rules of a domestic eligible entity do not provide procedures for the approval of a share exchange, a plan of share exchange may be adopted and approved, and the share exchange effectuated, in accordance with the procedures, if any, for a merger.
D. The plan of share exchange shall include:
1. The name, jurisdiction of formation, and type of entity of each acquired entity and the name, jurisdiction of formation, and type of entity of the acquiring entity;
2. The terms and conditions of the share exchange;
3. The manner and basis of exchanging shares of a domestic or foreign corporation or eligible interests in a domestic or foreign eligible entity whose shares or eligible interests will be acquired under the share exchange 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;
4. The manner and basis for exchanging any rights to acquire shares of a domestic or foreign corporation or eligible interests in a domestic or foreign eligible entity whose shares or eligible interests will be acquired under the share exchange 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; and
5. Any other provisions required by the organic law governing any foreign corporation or eligible entity that is a party to the share exchange or its articles of incorporation or organic rules.
E. In addition to the requirements of subsection D, the plan of share exchange may contain any other provision not prohibited by law.
F. Terms of a plan of share exchange may be made dependent on facts objectively ascertainable outside the plan in accordance with subsection L of § 13.1-604.
G. Unless the plan of share exchange provides otherwise, the plan of share exchange may be amended prior to the effective date of the certificate of share exchange, but if the shareholders of a domestic corporation that is a party to the share exchange are required by any provision of this chapter to vote on the plan, the plan may not be amended subsequent to approval of the plan by such shareholders to change any of the following, unless the amendment is subject to the approval of the shareholders:
1. The amount or kind of shares or other securities, eligible interests, obligations, rights to acquire shares, other securities or eligible interests, cash, or other property or any combination of the foregoing to be issued by the corporation or to be received under the plan by the shareholders, of the acquired entity; or
2. Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.
H. This section does not limit the power of a domestic corporation to acquire shares of another domestic or foreign corporation or eligible interests in an eligible entity in a transaction other than a share exchange.
Code 1950, § 13.1-69.1; 1975, c. 500; 1980, c. 90; 1985, c. 522; 2005, c. 765; 2015, c. 611; 2019, c. 734.