Consolidation
Consolidation
- A Consolidation is when two (or sometimes, more) corporations combine to
become a new distinct corporation. The corporations being consolidated then
cease to exist and their assets are acquired by and their obligations and debts
are assumed by the new corporation. The shareholders of the consolidated
corporations become the shareholders of the new
corporation.
To complete a Consolidation, each consolidating corporation's Board of Directors must adopt a Plan of Consolidation at a Special Meeting of the Board of Directors. This Plan will identify, among other terms, the names of the consolidating corporations and the new corporation, the process by which the shares of stock of the consolidating corporations will be exchanged for the shares of stock of the new corporation and the provisions that are to be included in the Articles of Incorporation of the new corporation.
This same Plan of Consolidation must be presented to and approved by the shareholders at a Special Meeting of the Shareholders. Regardless of the whether they own voting or non-voting stock, all of the shareholders are entitled to vote to approve or reject the Plan. Most state laws require approval by a super majority vote.
Disclaimer: The foregoing is intended to provide general information and may not be suitable in specific instances. The glossary information is not intended to be exhaustive, but rather to illustrate typical considerations. The material is provided with the understanding that it is not legal, accounting, tax or any other professional advice.
Copyright © 2003-2010 LawVantage.com, LLC. All rights reserved.
Important LawVantage.com, LLC and its website, CorporateBoardMinutes.com, do not render any legal, accounting or other consulting advice.
For legal advice, you should always consult with a qualified attorney-at-law.
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To complete a Consolidation, each consolidating corporation's Board of Directors must adopt a Plan of Consolidation at a Special Meeting of the Board of Directors. This Plan will identify, among other terms, the names of the consolidating corporations and the new corporation, the process by which the shares of stock of the consolidating corporations will be exchanged for the shares of stock of the new corporation and the provisions that are to be included in the Articles of Incorporation of the new corporation.
This same Plan of Consolidation must be presented to and approved by the shareholders at a Special Meeting of the Shareholders. Regardless of the whether they own voting or non-voting stock, all of the shareholders are entitled to vote to approve or reject the Plan. Most state laws require approval by a super majority vote.
Disclaimer: The foregoing is intended to provide general information and may not be suitable in specific instances. The glossary information is not intended to be exhaustive, but rather to illustrate typical considerations. The material is provided with the understanding that it is not legal, accounting, tax or any other professional advice.
Copyright © 2003-2010 LawVantage.com, LLC. All rights reserved.
Important LawVantage.com, LLC and its website, CorporateBoardMinutes.com, do not render any legal, accounting or other consulting advice.
For legal advice, you should always consult with a qualified attorney-at-law.
Website development by
Vine Design.