North Carolina § 55A-11-09 - Merger with unincorporated entity.

§ 55A-11-09. Merger with unincorporated entity.

As used in this section, "business entity " means a domestic business corporation (including a professional corporation as defined in G.S. 55B-2), a foreign business corporation (including a foreign professional corporation as defined in G.S. 55B-16), a domestic or foreign nonprofit corporation, a domestic or foreign limited liability company, a domestic or foreign limited partnership, a registered limited liability partnership or foreign limited liability partnership as defined in G.S. 59-32, or any other partnership as defined in G.S. 59-36 whether or not formed under the laws of this State. One or more domestic nonprofit corporations may merge with one or more unincorporated entities and, if desired, one or more foreign nonprofit corporations, domestic business corporations, or foreign business corporations if: The merger is permitted by the laws of the state or country governing the organization and internal affairs of each of the other merging business entities; Each merging domestic nonprofit corporation and each other merging business entity comply with the requirements of this section and, to the extent applicable, the laws referred to in subdivision (1) of this subsection; and The merger complies with G.S. 55A-11-02, if applicable. Each merging domestic nonprofit corporation and each other merging business entity shall approve a written plan of merger containing all of the following: For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs. The name of the merging business entity that shall survive the merger. The terms and conditions of the merger. The manner and basis of converting the interests in each merging business entity into interests, obligations, or securities of the surviving business entity, or into cash or other property in whole or in part, or of cancelling the interests. If the surviving business entity is a domestic nonprofit corporation, any amendments to its articles of incorporation that are to be made in connection with the merger. The plan of merger may contain other provisions relating to the merger. The provisions of the plan of merger, other than the provisions referred to in subdivisions (1), (2), and (5) of subsection (c) of this section, may be made dependent on facts objectively ascertainable outside the plan of merger if the plan of merger sets forth the manner in which the facts will operate upon the affected provisions. The facts may include any of the following: Statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or similar economic or financial data. A determination or action by the domestic nonprofit corporation or by any other person, group, or body. The terms of, or actions taken under, an agreement to which the domestic nonprofit corporation is a party, or any other agreement or document. In the case of a merging domestic nonprofit corporation, approval of the plan of merger requires that the plan of merger be adopted as provided in G.S. 55A-11-03. If any member of a merging domestic nonprofit corporation has or will have personal liability for any existing or future obligation of the surviving business entity solely as a result of holding an interest in the surviving business entity, then in addition to the requirements of G.S. 55A-11-03, approval of the plan of merger by the domestic nonprofit corporation shall require the affirmative vote or written consent of the member. In the case of each other merging business entity, the plan of merger must be approved in accordance with the laws of the state or country governing the organization and internal affairs of such merging business entity. After a plan of merger has been approved by a domestic nonprofit corporation but before the articles of merger become effective, the plan of merger (i) may be amended as provided in the plan of merger, or (ii) may be abandoned (subject to any contractual rights) as provided in the plan of merger or, if there is no such provision, as determined by the board of directors. After a plan of merger has been approved by each merging domestic nonprofit corporation and each other merging business entity as provided in subsection (c) of this section, the surviving business entity shall deliver articles of merger to the Secretary of State for filing. The articles of merger shall set forth: Repealed by Session Laws 2005, c. 268, s. 45. For each merging business entity, its name, type of business entity, and the state or country whose laws govern its organization and internal affairs. The name of the merging business entity that will survive the merger and, if the surviving business entity is not authorized to transact business or conduct affairs in this State, a designation of its mailing address and a commitment to file with the Secretary of State a statement of any subsequent change in its mailing address. If the surviving business entity is a domestic corporation, any amendment to its articles of incorporation as provided in the plan of merger. A statement that the plan of merger has been approved by each merging business entity in the manner required by law. Repealed by Session Laws 2005, c. 268, s. 45. A merger takes effect when the articles of merger become effective. When a merger takes effect: Each other merging business entity merges into the surviving business entity and the separate existence of each merging business entity except the surviving business entity ceases; The title to all real estate and other property owned by each merging business entity is vested in the surviving business entity without reversion or impairment; The surviving business entity has all liabilities of each merging business entity; A proceeding pending by or against any merging business entity may be continued as if the merger did not occur, or the surviving business entity may be substituted in the proceeding for a merging business entity whose separate existence ceases in the merger; If a domestic nonprofit corporation is the surviving business entity, its articles of incorporation shall be amended to the extent provided in the articles of merger; The interests in each merging business entity that are to be converted into interests, obligations, or securities of the surviving business entity or into the right to receive cash or other property are thereupon so converted, and the former holders of the interests are entitled only to the rights provided to them in the plan of merger or, in the case of former holders of shares in a domestic business corporation, any rights they may have under Article 13 of Chapter 55 of the General Statutes; and If the surviving business entity is not a domestic business corporation, the surviving business entity is deemed to agree that it will promptly pay to the shareholders of any merging domestic business corporation exercising appraisal rights the amount, if any, to which they are entitled under Article 13 of Chapter 55 of the General Statutes and otherwise to comply with the requirements of Article 13 as if it were a surviving domestic business corporation in the merger. If the surviving business entity is not a domestic limited liability company, a domestic business corporation, a domestic nonprofit corporation, or a domestic limited partnership, when the merger takes effect the surviving business entity is deemed: To agree that it may be served with process in this State in any proceeding for enforcement of (i) any obligation of any merging domestic limited liability company, domestic business corporation, domestic nonprofit corporation, domestic limited partnership, or other partnership as defined in G.S. 59-36 that is formed under the laws of this State, (ii) the appraisal rights of shareholders of any merging domestic business corporation under Article 13 of Chapter 55 of the General Statutes, and (iii) any obligation of the surviving business entity arising from the merger; and To have appointed the Secretary of State as its agent for service of process in any such proceeding. Service on the Secretary of State of any such process shall be made by delivering to and leaving with the Secretary of State, or with any clerk authorized by the Secretary of State to accept service of process, duplicate copies of such process and the fee required by G.S. 55A-1-22(b). Upon receipt of service of process on behalf of a surviving business entity in the manner provided for in this section, the Secretary of State shall immediately mail a copy of the process by registered or certified mail, return receipt requested, to the surviving business entity. If the surviving business entity is authorized to transact business or conduct affairs in this State, the address for mailing shall be its principal office designated in the latest document filed with the Secretary of State that is authorized by law to designate the principal office or, if there is no principal office on file, its registered office. If the surviving business entity is not authorized to transact business or conduct affairs in this State, the address for mailing shall be the mailing address designated pursuant to subdivision (3) of subsection (d) of this section. This section does not apply to a merger that does not include a merging unincorporated entity. If the plan of merger is amended after the articles of merger have been filed but before the articles of merger become effective, and any statement in the articles of merger becomes incorrect as a result of the amendment, the surviving business entity shall deliver to the Secretary of State for filing prior to the time the articles of merger become effective an amendment to the articles of merger correcting the incorrect statement. If the articles of merger are abandoned after the articles of merger are filed but before the articles of merger become effective, the surviving business entity shall deliver to the Secretary of State for filing prior to the time the articles of merger become effective an amendment reflecting abandonment of the plan of merger. Certificates of merger shall also be registered as provided in G.S. 47-18.1. The merger shall not affect the liability or absence of liability of any holder of an interest in a merging business entity for any acts, omissions, or obligations of any merging business entity made or incurred prior to the effectiveness of the merger. The cessation of separate existence of a merging business entity in the merger shall not constitute a dissolution or termination of the merging business entity. History (1999-369, s. 2.7; 2000-140, s. 48; 2001-387, ss. 40, 41, 42; 2001-487, s. 62(f); 2005-268, ss. 44, 45, 46; 2007-385, s. 3; 2011-347, ss. 13, 14; 2018-45, s. 29.) Editor's Note. - Session Laws 1999-369, s. 8, made this section effective December 15, 1999, and applicable to mergers, consolidations, or conversions effective on or after that date. Session Laws 1999-369, s. 2.7 set out present subsection (e1) within subsection (e). The redesignation of this subsection was set out above pursuant to directions from the Revisor of Statutes. Session Laws 2001-387, s. 154(b) provides that nothing in this act shall supersede the provisions of Article 10 or 65 of Chapter 58 of the General Statutes, and this act does not create an alternate means for an entity governed by Article 65 of Chapter 58 of the General Statutes to convert to a different business form. Effect of Amendments. - Session Laws 2005-268, ss. 44 through 46, effective October 1, 2005, added the subsection (c1), (c3) and (c4) designations and added subsection (c2); deleted former subdivision (d)(1) which read: "The plan of merger"; in subdivision (d)(3), substituted "merging" for "surviving" and inserted "that will survive the merger"; added subdivision (d)(3a); deleted former subdivision (d)(5) which read: "The effective date and time of merger if it is not to be effective at the time of filing of the articles of merger"; rewrote the second paragraph of subsection (d); substituted "articles" for "plan" in subdivision (e)(5); and made minor stylistic changes throughout. Session Laws 2007-385, s. 3, effective August 19, 2007, substituted "plan of merger" for "articles of merger" in subdivision (e)(6). Session Laws 2011-347, ss. 13 and 14, effective October 1, 2011, in subdivision (e)(7), deleted "dissenting" preceding "shareholders" and inserted "exercising appraisal rights"; and in subdivision (e1)(1), substituted "appraisal rights of shareholders" for "rights of dissenting shareholders." Session Laws 2018-45, s. 29, effective October 1, 2018, in subsection (c), substituted "containing all of the following:" for "containing" in the last sentence of the lead-in language; substituted "of converting" for "for converting," and "part, or of cancelling the interests" for "part" in subdivision (c)(4), and made minor stylistic changes throughout. Legal Periodicals. - For article, "Legislative Survey: Business & Banking," see 22 Campbell L. Rev. 253 (2000).