Merger
Merger
- A Merger is when one (or sometimes, more) companies are absorbed
into another corporation (the "Surviving Corporation"). Unlike a
Consolidation, the Merger does not result in a new distinct entity. The
corporation being absorbed (the "Merged Corporation") then ceases to
exist and its assets are acquired by and its obligations and debts are assumed
by the Surviving Corporation. The shareholders of the Merged Corporation become
shareholders of the Surviving Corporation together with the already existing
shareholders of the Surviving
Corporation.
To complete a Merger, each merging corporation's Board of Directors must adopt an Agreement and Plan of Merger at a Special Meeting of the Board of Directors. This Plan will identify, among other terms, the names of the merging corporations and the Surviving Corporation, the process by which the shares of stock of the Merged Corporation will be exchanged for the shares of stock of the Surviving Corporation and any amendments that must be made to the Articles of Incorporation of the Surviving Corporation.
Except in the case of a merger between a parent company and its subsidiary, this same Agreement and Plan of Merger 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 Merger, each merging corporation's Board of Directors must adopt an Agreement and Plan of Merger at a Special Meeting of the Board of Directors. This Plan will identify, among other terms, the names of the merging corporations and the Surviving Corporation, the process by which the shares of stock of the Merged Corporation will be exchanged for the shares of stock of the Surviving Corporation and any amendments that must be made to the Articles of Incorporation of the Surviving Corporation.
Except in the case of a merger between a parent company and its subsidiary, this same Agreement and Plan of Merger 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.