Virginia Code 13.1-895: Action on plan of merger.
A. In the case of a domestic corporation that is a party to a merger, where the members of any merging corporation have voting rights the plan of merger shall be adopted by the board of directors. Except as provided in subsection F, after adopting a plan of merger, the board of directors shall submit the plan to the members for their approval.
Terms Used In Virginia Code 13.1-895
- 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 13.1-803
- Board of directors: means the group of persons vested with the management of the business of the corporation irrespective of the name by which such group is designated, and "director" means a member of the board of directors. See Virginia Code 13.1-803
- 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.
- Document: means (i) any tangible medium on which information is inscribed, and includes any writing or written instrument, or (ii) an electronic record. See Virginia Code 13.1-803
- domestic corporation: means a corporation not 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 that, 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 11. See Virginia Code 13.1-803
- Eligible entity: means a domestic or foreign unincorporated entity or a domestic or foreign stock corporation. See Virginia Code 13.1-803
- Eligible interests: means interests or shares. See Virginia Code 13.1-803
- Entity: includes any domestic or foreign corporation; any domestic or foreign stock corporation; any domestic or foreign unincorporated entity; any estate or trust; and any state, the United States, and any foreign government. See Virginia Code 13.1-803
- Foreign corporation: means a corporation not authorized by law to issue shares, organized under laws other than the laws of the Commonwealth. See Virginia Code 13.1-803
- Interest: means either or both of the following rights under the organic law of a foreign or domestic unincorporated entity:
1. See Virginia Code 13.1-803
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Member: means one having a membership interest in a corporation in accordance with the provisions of its articles of incorporation or bylaws. See Virginia Code 13.1-803
- Membership interest: means the interest of a member in a domestic or foreign corporation, including voting and all other rights associated with membership. See Virginia Code 13.1-803
- Merger: means a business combination pursuant to § Virginia Code 13.1-893.1
- Organic document: means the document, if any, that is filed of public record to create an unincorporated entity. See Virginia Code 13.1-803
- Person: includes an individual and an entity. See Virginia Code 13.1-803
- Quorum: The number of legislators that must be present to do business.
- State: when applied to a part of the United States, includes any of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, and the United States Virgin Islands. See Virginia Code 1-245
- Voting group: means all members of one or more classes that under the articles of incorporation or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of members. See Virginia Code 13.1-803
- written: means any information in the form of a document. See Virginia Code 13.1-803
The board of directors shall also transmit to the members a recommendation that the members approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors shall transmit to the members the basis for that determination.
B. The board of directors may condition its submission of the plan of merger to the members on any basis.
C. 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 corporation shall notify each member, whether or not entitled to vote, of the meeting of members at which the plan is to be submitted for approval. The notice shall state that the purpose, or one of the purposes, of the meeting is to consider the plan and contain or be accompanied by a copy or summary of the plan. If the corporation is to be merged into an existing domestic or foreign corporation or eligible entity and its members are to receive membership or other interests in the surviving corporation or eligible entity, the notice shall also include or be accompanied by a copy or summary of the articles of incorporation or organic document of that corporation or eligible entity. If the corporation is to be merged into a domestic or foreign corporation or eligible entity that is to be created pursuant to the merger and its members are to receive membership or other interests in the surviving corporation or eligible entity, the notice shall include or be accompanied by a copy or a summary of the articles of incorporation or organic document of the new domestic or foreign corporation or eligible entity.
D. Unless the articles of incorporation or the board of directors acting pursuant to subsection B, requires a greater vote, the plan of merger to be authorized shall be approved by each voting group entitled to vote on the plan by more than two-thirds of all the votes cast by that voting group at a meeting at which a quorum of the voting group exists. The articles of incorporation may provide for a greater or lesser vote than that provided for in this subsection or a vote by separate voting groups so long as the vote provided for is not less than a majority of all the votes cast on the plan by each voting group entitled to vote on the transaction at a meeting at which a quorum of the voting group exists.
E. Separate voting by voting groups is required:
1. On a plan of merger by each class of members:
a. Whose membership interests are to be converted under the plan of merger into membership interests in a different domestic or foreign corporation, or eligible interests or other securities, obligations, rights to acquire membership interests, eligible interests or other securities, cash, other property, or any combination of the foregoing; or
b. Who would be entitled to vote as a separate group on a provision in the plan that, if contained in a proposed amendment to the articles of incorporation, would require action by separate voting groups under § 13.1-887.
2. On a plan of merger, if the voting group is entitled under the articles of incorporation to vote as a voting group to approve a plan of merger.
F. Unless the articles of incorporation otherwise provide, approval by the corporation’s members of a plan of merger is not required if:
1. The corporation will survive the merger;
2. Except for amendments permitted by subsection B of § 13.1-885, its articles of incorporation will not be changed; and
3. Each person who is a member of the corporation immediately before the effective time of the merger will retain the same membership interest with identical designation, preferences, limitations, and rights immediately after the effective time of the merger.
G. Where any merging corporation has no members, or no members having voting rights, a plan of merger shall be adopted at a meeting of the board of directors of such corporation upon receiving the vote of a majority of the directors in office.
H. If as a result of a merger one or more members of a domestic corporation would become subject to owner liability for the debts, obligations, or liabilities of any other person or entity, approval of the plan of merger shall require the execution by each member of a separate written consent to become subject to such owner liability.
Code 1950, § 13.1-242; 1956, c. 428; 1985, c. 522; 2002, c. 607; 2007, c. 925; 2015, c. 611.