SB566: Bill Text

SB566,301,11 (12) “Plan" means a plan of merger under s. 181.1102, a plan of interest exchange under s. 181.1132, a plan of conversion under s. 181.1162, or a plan of domestication under s. 181.1172.

SB566,301,13 (13) “Surviving entity" means the entity that continues in existence after or is created by a merger.

SB566,301,14 (14) “Type of entity" means a generic form of entity that is any of the following:

SB566,301,15 (a) Recognized at common law.

SB566,301,16 (b) Recognized under a governing law.

SB566,506 Section 506. 181.11001 of the statutes is created to read:

SB566,301,20 181.11001 Relationship of subchapter to other laws. (1) This subchapter does not authorize an act prohibited by, and does not affect the application or requirements of, law other than this subchapter.

SB566,301,25 (2) A transaction effected under this subchapter may not create or impair a right, duty, or obligation of a person under the law of this state, other than this subchapter, relating to a change in control, takeover, business combination, control-share acquisition, or similar transaction involving a domestic constituent, acquired, or converting entity.

SB566,507 Section 507. 181.11002 of the statutes is created to read:

SB566,302,9 181.11002 Existing purpose. (1) Property held for a charitable purpose under the law of this state by a domestic or foreign entity immediately before a transaction under this subchapter becomes effective may not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred. An entity that is or plans to be engaged in a transaction covered by this subchapter may apply to the circuit court for a determination regarding the transaction's compliance with cy pres or other law dealing with nondiversion of charitable assets.

SB566,302,13 (2) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to a merging entity which is not the surviving entity and that takes effect or remains payable after the merger inures to the surviving entity.

SB566,302,16 (3) A trust obligation that would govern property if transferred to a nonsurviving entity applies to property that is transferred to the surviving entity under this section.

SB566,508 Section 508. 181.11003 of the statutes is created to read:

SB566,302,20 181.11003 Nonexclusivity. The fact that a transaction under this subchapter produces a certain result does not preclude the same result from being accomplished in any other manner permitted by law other than this subchapter.

SB566,509 Section 509. 181.11004 of the statutes is created to read:

SB566,303,2 181.11004 Reference to external facts. A plan may refer to facts ascertainable outside the plan if the manner in which the facts will operate upon the plan is specified in the plan. The facts may include the occurrence of an event or a determination or action by a person, whether or not the event, determination, or action is within the control of a party to the transaction.

SB566,510 Section 510. 181.1101 (title) of the statutes is repealed and recreated to read:

SB566,303,4 181.1101 (title) Merger authorized.

SB566,511 Section 511. 181.1101 (1) (title) of the statutes is repealed.

SB566,512 Section 512. 181.1101 (1) of the statutes is amended to read:

SB566,303,13 181.1101 (1) One or more domestic corporations may merge with or into one or more other business constituent entities pursuant to ss. 181.1101 to 181.11055 and a plan of merger if the plan of merger is approved as provided in s. 181.1103 and if the merger is permitted under the applicable governing law of the jurisdiction that governs each other business constituent entity that is a party to the merger and each business constituent entity approves the plan of merger in the manner required by the laws applicable to the business entity its governing law.

SB566,513 Section 513. 181.1101 (2) of the statutes is repealed.

SB566,514 Section 514. 181.1101 (2m) of the statutes is created to read:

SB566,303,20 181.1101 (2m) One or more other domestic or foreign entities may merge with or into a domestic corporation pursuant to ss. 181.1101 to 181.11055 and a plan of merger if the merger is permitted under the governing law of each constituent entity and each constituent entity approves the plan of merger in the manner required by its governing law.

SB566,515 Section 515. 181.1101 (3) of the statutes is repealed.

SB566,516 Section 516. 181.1102 of the statutes is created to read:

SB566,303,24 181.1102 Plan of merger. (1) A plan of merger must be in a record and contain all of the following:

SB566,303,25 (a) As to each constituent entity, its name, type of entity, and governing law.

SB566,304,1 (b) The terms and conditions of the merger.

SB566,304,4 (c) The manner and basis of converting the interests in each constituent entity into interests, securities, or obligations of the surviving entity, rights to acquire such interests or securities, money, other property, or any combination of the foregoing.

SB566,304,7 (d) If the surviving entity preexists the merger, any proposed amendments to its organizational documents that are to be in a record immediately after the merger becomes effective.

SB566,304,9 (e) If the surviving entity is to be created in the merger, any of its organizational documents that are to be in a record immediately after the merger becomes effective.

SB566,304,11 (f) Any other matters required under the governing law of any constituent entity.

SB566,304,13 (2) In addition to the requirements of sub. (1), a plan of merger may contain any other provision relating to the merger and not prohibited by law.

SB566,304,16 (3) This section does not limit the power of a corporation to acquire all or part of the interests of one or more classes or series of another constituent entity through a voluntary exchange or otherwise.

SB566,517 Section 517. 181.1103 (title) of the statutes is repealed and recreated to read:

SB566,304,18 181.1103 (title) Approval of merger; amendment; abandonment.

SB566,518 Section 518. 181.1103 (1) of the statutes is renumbered 181.1103 (1m) (b) and amended to read:

SB566,305,2 181.1103 (1m) (b) Corporations Domestic corporations without members with voting rights. If the domestic corporation does not have members with voting rights, the plan of merger must be approved by a majority of the directors in office at the time the plan of merger is approved. In addition the domestic corporation shall provide notice of any board meeting at which such approval is to be obtained in accordance with s. 181.0822 (3). The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed plan of merger.

SB566,519 Section 519 . 181.1103 (1m) (title) of the statutes is created to read:

SB566,305,4 181.1103 (1m) (title) Manner of approval of plan of merger.

SB566,520 Section 520. 181.1103 (1m) (a) of the statutes is created to read:

SB566,305,8 181.1103 (1m) (a) In general. Subject to s. 181.1180, a plan of merger must be approved in the manner provided by this subsection by each domestic corporation that is a constituent entity.

SB566,521 Section 521. 181.1103 (2) of the statutes is renumbered 181.1103 (1m) (c), and 181.1103 (1m) (c) (intro.), as renumbered, is amended to read:

SB566,305,14 181.1103 (1m) (c) Corporations Domestic corporations with voting members. (intro.) Unless this chapter, the articles of incorporation or the bylaws require a greater vote or voting by class, a plan of merger to be adopted by a domestic corporation with voting members shall be approved by all of the following:

SB566,522 Section 522. 181.1103 (2m), (3m) and (4m) of the statutes are created to read:

SB566,305,21 181.1103 (2m) Amending or abandoning plan of merger. Subject to s. 181.1180 and the governing law of each constituent entity, after a plan of merger is approved, and at any time before a merger becomes effective, the constituent entities may amend the plan of merger or abandon the merger as provided in the plan of merger or, except as otherwise provided in the plan of merger, with the same vote or consent as was required to approve the plan of merger.

SB566,306,4 (3m) Statement of amendment or abandonment. If, after articles of merger have been delivered to the department for filing and before the merger becomes effective, the plan of merger is amended in a manner that requires an amendment to the articles of merger or if the merger is abandoned, a statement of amendment or abandonment, signed by a constituent entity, must be delivered to the department for filing before the merger becomes effective. When the statement of abandonment becomes effective, the merger is abandoned and does not become effective. The statement of amendment or abandonment must contain all of the following:

SB566,306,5 (a) The name of each constituent entity.

SB566,306,6 (b) The amendment to or the abandonment of the articles of merger.

SB566,306,8 (c) A statement that the amendment or abandonment was approved in accordance with this section.

SB566,306,11 (4m) Additional approval of plan of merger. In addition to approval under sub. (1m), a plan of merger must be approved by each constituent entity that is not a domestic corporation in accordance with any requirements of its governing law.

SB566,523 Section 523. 181.1103 (3) of the statutes is renumbered 181.1103 (1m) (d) and amended to read:

SB566,307,2 181.1103 (1m) (d) Notice requirements. If the board seeks to have the plan of merger approved by the members at a membership meeting, the domestic corporation shall give notice, to its members with voting rights, of the proposed membership meeting in accordance with s. 181.0705, except that the notice shall be given at least 20 days before the meeting date. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger and contain or be accompanied by a copy or summary of the plan. The copy or summary of the plan for members of the surviving domestic corporation shall include any provision that, if contained in a proposed amendment to the articles of incorporation or bylaws, would entitle members to vote on the provision. The copy or summary of the plan for members of the disappearing domestic corporation shall include a copy or summary of the articles of incorporation and bylaws that will be in effect immediately after the merger takes effect.

SB566,524 Section 524. 181.1103 (4) of the statutes is renumbered 181.1103 (1m) (e) and amended to read:

SB566,307,13 181.1103 (1m) (e) Written consents or ballots. If the board seeks to have the plan approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the plan. The copy or summary of the plan for members of the surviving domestic corporation shall include any provision that, if contained in a proposed amendment to the articles of incorporation or bylaws, would entitle members to vote on the provision. The copy or summary of the plan for members of the disappearing domestic corporation shall include a copy or summary of the articles of incorporation and bylaws that will be in effect immediately after the merger takes effect.

SB566,525 Section 525. 181.1103 (5) of the statutes is renumbered 181.1103 (1m) (f).

SB566,526 Section 526. 181.1103 (6) of the statutes is renumbered 181.1103 (1m) (g).

SB566,527 Section 527. 181.1104 of the statutes is repealed.

SB566,528 Section 528. 181.11045 of the statutes is created to read:

SB566,307,21 181.11045 Filings required for merger; effective date. (1) After a merger has been approved with respect to each constituent entity in accordance with its governing law, the constituent entities shall deliver, or cause to be delivered, to the department for filing articles of merger setting forth all of the following:

SB566,307,22 (a) The name, type of entity, and governing law of each constituent entity.

SB566,307,24 (b) The name, type of entity, and governing law of the surviving entity and, if the surviving entity is created by the merger, a statement to that effect.

SB566,308,2 (c) A statement that the plan of merger has been approved and adopted by each constituent entity in accordance with its governing law.

SB566,308,6 (d) 1. If the surviving entity preexists the merger, any amendments to its organizational documents under s. 181.1102 (1) (d) that are to be in a public record under its governing law or, if there are no such amendments, a statement to that effect.

SB566,308,9 2. If the surviving entity is to be created in the merger, any of its organizational documents under s. 181.1102 (1) (e) that are to be in a public record under its governing law.

SB566,308,11 (e) A statement that the plan of merger is on file at the principal office of the surviving entity.

SB566,308,13 (f) A statement that upon request the surviving entity will provide a copy of the plan of merger to any person that was an interest holder of a constituent entity.

SB566,308,16 (2) In addition to the requirements of sub. (1), the articles of merger may contain any other provisions relating to the merger, as determined by the constituent entities in accordance with the plan of merger.

SB566,308,19 (3) If the surviving entity is a foreign entity that will be required to register to do business in this state immediately after the merger and it has not previously registered to do so, it shall so register.

SB566,308,20 (4) A merger takes effect at the effective date and time of the articles of merger.

SB566,529 Section 529. 181.1105 of the statutes is repealed.

SB566,530 Section 530. 181.11055 of the statutes is created to read:

SB566,308,24 181.11055 Effect of merger. (1) When a merger becomes effective, all of the following apply:

SB566,309,3 (a) Each merging entity merges into the surviving entity, and the separate existence of every constituent entity that is a party to the merger, except the surviving entity, ceases.

SB566,309,5 (am) 1. Except as provided in this paragraph, no interest holder shall have interest holder liability with respect to any of the constituent entities.

SB566,309,12 2. If, under the governing law of a constituent entity, one or more of the interest holders thereof had interest holder liability prior to the merger with respect to the entity, such interest holder or holders shall continue to have such liability and any associated contribution or other rights to the extent provided in such governing law with respect to debts, obligations, and other liabilities of the entity that accrued during the period or periods in which such interest holder or holders had such interest holder liability.

SB566,309,18 3. If, under the governing law of the surviving entity, one or more of the interest holders thereof will have interest holder liability after the merger with respect to the surviving entity, such interest holder or holders will have such liability and any associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the surviving entity that accrue on or after the merger.

SB566,309,19 4. This paragraph does not affect liability under any taxation laws.

SB566,309,21 (b) The title to all property owned by each constituent entity is vested in the surviving entity without transfer, reversion, or impairment.

SB566,309,23 (c) The surviving entity has all debts, obligations, and other liabilities of each constituent entity.

SB566,310,2 (d) A civil, criminal, or administrative proceeding pending by or against any constituent entity may be continued as if the merger did not occur, or the surviving entity may be substituted in the proceeding for a constituent entity whose existence ceased.

SB566,310,6 (e) 1. If the surviving entity preexists the merger, its organizational documents are amended to the extent, if any, provided in the plan of merger and, to the extent such amendments are to be reflected in a public record, as provided in the articles of merger.

SB566,310,9 2. If the surviving entity is created in the merger, its organizational documents are as provided in the plan of merger and, to the extent such organizational documents are to be reflected in a public record, as provided in the articles of merger.

SB566,310,17 (f) The interests of each constituent entity that are to be converted into interests, securities, or obligations of the surviving entity, rights to acquire such interests or securities, money, other property, or any combination of the foregoing, are converted as provided in the plan of merger, and the former interest holders of the interests are entitled only to the rights provided to them in the plan of merger or to their rights, if any, under ss. 178.1161, 179.1161, 180.1301 to 180.1331, 181.1180, 183.1061, or otherwise under the governing law of the constituent entity. All other terms and conditions of the merger also take effect.

SB566,310,20 (g) Except as prohibited by other law or as otherwise provided in the articles and plan of merger, all of the rights, privileges, immunities, powers, and purposes of each constituent entity vest in the surviving entity.

SB566,310,24 (h) Except as otherwise provided in the articles and plan of merger, if a merging entity is a partnership, limited liability company, or other entity subject to dissolution under its governing law, the merger does not dissolve the merging entity for the purposes of its governing law.

SB566,311,4 (2) (a) When a merger takes effect, the department is the agent of any foreign surviving entity for service of process in a proceeding to enforce any obligation or the rights of interest holders, in their capacity as such, of each domestic constituent entity.

SB566,311,7 (b) When a merger takes effect, any foreign surviving entity shall timely honor the rights and obligations of interest holders under this chapter with respect to each domestic corporation constituent entity.