Corporations Rules 6

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Corporations Rules 6
2010-07-15 17:31:17
Mergers Acquisitions

Mergers and acquisitions
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  1. Statutory mergers
    Two corps becoome one, either by one surviving or by combining to form new corp.

    Requires a plan of merger including terms of proposed merger, approval by board of each corp, approval by shareholders of each corp, and an amended certificate of incorporation

    Shareholder approval = majority (or 2/3 if formed before 02/22/98)

    Statutory mergers btwn corp and subsidiary where parent owns 90% of sub do not need shareholder approval

    All assets and liabilities of both corporations survive the merge
  2. Asset acquisition
    Requires: board authorization, shareholder authorization (majority, or 2/3 if formed before 02/22/98).

    Transferor remains liable for debts, including those associated with the transferred assets.

    Transferee not responsible to transferor's creditors unless it assumes the liabilites, there was a merger of seller and purchaser, the purchasing corporation was a mere continuation of the selling corporation, or transaction is fraudulent.
  3. Stock acquisition
    Stock-for-stock acquisition: generally not all shareholders required to participate in the stock swap.

    Stock purchase: on the open market or by tender offer.
  4. Dissenting shareholders
    May be able to force the corporation to buy stock at a fair value.