CHAPTER 40. MERGER AND SHARE EXCHANGE - Indiana Statutes

IC 23-1-40
     Chapter 40. Merger and Share Exchange

IC 23-1-40-1
Right to merge; plan of merger
     Sec. 1. (a) One (1) or more corporations may merge into another corporation if the board of directors of each corporation adopts and its shareholders (if required by section 3 of this chapter) approve a plan of merger.
    (b) The plan of merger must set forth:
        (1) the name of each corporation planning to merge and the name of the surviving corporation into which each other corporation plans to merge;
        (2) the terms and conditions of the merger; and
        (3) the manner and basis of converting the shares of each corporation into shares, obligations, or other securities of the surviving or any other corporation or into cash or other property in whole or in part.
    (c) The plan of merger may set forth:
        (1) amendments to the articles of incorporation of the surviving corporation; and
        (2) other provisions relating to the merger.
As added by P.L.149-1986, SEC.24.

IC 23-1-40-2
Acquisition of shares of another corporation; plan of exchange
     Sec. 2. (a) A corporation may acquire all of the outstanding shares of one (1) or more classes or series of another corporation if the board of directors of each corporation adopts and its shareholders (if required by section 3 of this chapter) approve the exchange.
    (b) The plan of exchange must set forth:
        (1) the name of the corporation whose shares will be acquired and the name of the acquiring corporation;
        (2) the terms and conditions of the exchange; and
        (3) the manner and basis of exchanging the shares to be acquired for shares, obligations, or other securities of the acquiring or any other corporation or for cash or other property in whole or in part.
    (c) The plan of exchange may set forth other provisions relating to the exchange.
    (d) This section does not limit the power of a corporation to acquire all or part of the shares of one (1) or more classes or series of another corporation through a voluntary exchange or otherwise.
As added by P.L.149-1986, SEC.24.

IC 23-1-40-3
Shareholder approval of plan of merger or share exchange; procedure; abandonment of plan
     Sec. 3. (a) After adopting a plan of merger or share exchange, the board of directors of each corporation party to the merger, and the

board of directors of the corporation whose shares will be acquired in the share exchange, shall submit the plan of merger (except as provided in subsection (g)) or share exchange for approval by its shareholders.
    (b) For a plan of merger or share exchange to be approved:
        (1) the board of directors must recommend the plan of merger or share exchange to the shareholders, unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders with the plan; and
        (2) the shareholders entitled to vote must approve the plan.
    (c) The board of directors may condition its submission of the proposed merger or share exchange on any basis.
    (d) The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with IC 23-1-29-5. The notice must also state that the purpose, or one (1) of the purposes, of the meeting is to consider the plan of merger or share exchange and must contain or be accompanied by a copy or summary of the plan.
    (e) Unless this article, the articles of incorporation, or the board of directors (acting under subsection (c)) requires a greater vote or a vote by voting groups, the plan of merger or share exchange to be authorized must be approved by each voting group entitled to vote separately on the plan by a majority of all the votes entitled to be cast on the plan by that voting group.
    (f) Separate voting by voting groups is required:
        (1) on a plan of merger if the plan contains a provision that, if contained in a proposed amendment to articles of incorporation, would require action by one (1) or more separate voting groups on the proposed amendment under IC 23-1-38-4; or
        (2) on a plan of share exchange by each class or series of shares included in the exchange, with each class or series constituting a separate voting group.
    (g) Action by the shareholders of the surviving corporation on a plan of merger is not required if:
        (1) the articles of incorporation of the surviving corporation will not differ (except for amendments enumerated in IC 23-1-38-2) from its articles before the merger;
        (2) each shareholder of the surviving corporation whose shares were outstanding immediately before the effective date of the merger will hold the same proportionate number of shares relative to the number of shares held by all such shareholders (except for shares of the surviving corporation received solely as a result of the shareholder's proportionate shareholdings in the other corporations party to the merger), with identical designations, preferences, limitations, and relative rights, immediately after;
        (3) the number of voting shares outstanding immediately after the merger, plus the number of voting shares issuable as a result

of the merger (either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger), will not exceed by more than twenty percent (20%) the total number of voting shares (adjusted to reflect any forward or reverse share split that occurs under the plan of merger) of the surviving corporation outstanding immediately before the merger; and
        (4) the number of participating shares outstanding immediately after the merger, plus the number of participating shares issuable as a result of the merger (either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger), will not exceed by more than twenty percent (20%) the total number of participating shares (adjusted to reflect any forward or reverse share split that occurs under the plan of merger) outstanding immediately before the merger.
    (h) As used in subsection (g):
        (1) "Participating shares" means shares that entitle their holders to participate without limitation in distributions.
        (2) "Voting shares" means shares that entitle their holders to vote unconditionally in elections of directors.
    (i) After a merger or share exchange is authorized, and at any time before articles of merger or share exchange are filed, the planned merger or share exchange may be abandoned (subject to any contractual rights), without further shareholder action, in accordance with the procedure set forth in the plan of merger or share exchange or, if none is set forth, in the manner determined by the board of directors.
As added by P.L.149-1986, SEC.24. Amended by P.L.107-1987, SEC.16; P.L.3-2008, SEC.165.

IC 23-1-40-4
Merger of subsidiary and parent corporation
     Sec. 4. (a) A parent corporation owning at least ninety percent (90%) of the outstanding shares of each class of a subsidiary corporation may merge the subsidiary and the parent corporation without approval of the shareholders of the parent or subsidiary.
    (b) If the parent corporation will be the surviving corporation, the board of directors of the parent shall adopt a plan of merger that sets forth:
        (1) the names of the parent and subsidiary; and
        (2) the manner and basis of converting the shares of the subsidiary into shares, obligations, or other securities of the parent or any other corporation or into cash or other property in whole or in part.
    (c) The parent shall mail a copy or summary of the plan of merger to each shareholder of the subsidiary who does not waive the mailing requirement in writing.
    (d) The parent may not deliver articles of merger to the secretary of state for filing until at least thirty (30) days after the date it mailed

a copy of the plan of merger to each shareholder of the subsidiary who did not waive the mailing requirement.
    (e) The articles of incorporation of the parent corporation that are in effect immediately before the effective date of the merger constitute the articles of incorporation of the surviving corporation, and articles of merger under this section may not contain amendments to the articles of incorporation of the parent corporation (except for amendments enumerated in IC 23-1-38-2). If the subsidiary is a domestic corporation and will be the surviving corporation of a merger with a parent that is a foreign corporation, the articles of incorporation of the parent corporation that will be inherited by the subsidiary upon the effective date of the merger shall be delivered to the secretary of state for filing together with the articles of merger to be delivered for filing under section 5(a) of this chapter.
    (f) If the parent corporation will not be the surviving corporation, the board of directors of the parent shall adopt a plan of merger that sets forth:
        (1) the names of the parent and subsidiary; and
        (2) the manner and basis of converting the shares of the parent into shares of the surviving corporation.
    (g) A plan adopted under subsection (f) must ensure that each shareholder of the parent corporation whose shares were outstanding immediately before the effective date of the merger will hold the same proportionate number of shares relative to the number of shares held by all such shareholders (except for shares of the surviving corporation received solely as a result of the shareholder's proportionate shareholdings in any other corporations besides the parent which are parties to the merger), with identical designations, preferences, limitations, and relative rights, of the surviving corporation immediately after that effective date. If the plan provides that the shareholders of the subsidiary (other than the parent) will not be shareholders of the surviving corporation immediately after that effective date, the plan must also set forth the manner and basis of converting the shares of the subsidiary held by such shareholders into obligations or other securities of the surviving corporation or shares, obligations, or other securities of any other corporation or into cash or other property in whole or in part.
As added by P.L.149-1986, SEC.24. Amended by P.L.107-1987, SEC.17; P.L.145-1988, SEC.5.

IC 23-1-40-5
Surviving corporation; filing of articles of merger or share exchange
     Sec. 5. (a) After a plan of merger or share exchange is approved by the shareholders, or adopted by the board of directors if shareholder approval is not required, the surviving or acquiring corporation shall deliver to the secretary of state for filing articles of merger or share exchange setting forth:
        (1) the name of the surviving or acquiring corporation following

the merger or share exchange;
        (2) if shareholder approval was not required, a statement to that effect;
        (3) if approval of the shareholders of one (1) or more corporations party to the merger or share exchange was required:
            (A) the designation, number of outstanding shares, and number of votes entitled to be cast by each voting group entitled to vote separately on the merger or share exchange as to each corporation; and
            (B) either the total number of votes cast for and against the merger or share exchange by each voting group entitled to vote separately on the merger or share exchange or the total number of undisputed votes cast for the merger or share exchange separately by each voting group and a statement that the number cast for the merger or share exchange by each voting group was sufficient for approval by that voting group.
    (b) Unless a delayed effective date is specified, a merger or share exchange takes effect when the articles of merger or share exchange are filed.
    (c) The surviving corporation resulting from a merger may, after the merger has become effective, file for record with the county recorder of each county in Indiana in which the corporation has real property at the time of the merger, the title to which will be transferred by the merger, a file-stamped copy of the articles of merger. If the articles of merger set forth amendments to the articles of incorporation of the surviving corporation that change its corporate name, a file-stamped copy of the articles of merger may be filed for record with the county recorder of each county in Indiana in which the surviving or acquiring corporation has any real property at the time the merger becomes effective. A failure to record a copy of the articles of merger under this subsection does not affect the validity of the merger or the change in corporate name.
As added by P.L.149-1986, SEC.24. Amended by P.L.133-2009, SEC.33.

IC 23-1-40-6
Effect of merger
     Sec. 6. (a) When a merger takes effect:
        (1) every other corporation party to the merger merges into the surviving corporation and the separate existence of every corporation except the surviving corporation ceases;
        (2) the title to all real estate and other property owned by each corporation party to the merger is vested in the surviving corporation without reversion or impairment;
        (3) the surviving corporation has all liabilities of each corporation party to the merger;
        (4) a proceeding pending against any corporation party to the merger may be continued as if the merger did not occur or the

surviving corporation may be substituted in the proceeding for the corporation whose existence ceased;
        (5) the articles of incorporation of the surviving corporation are amended to the extent provided in the plan of merger; and
        (6) the shares of each corporation party to the merger that are to be converted into shares, obligations, or other securities of the surviving or any other corporation or into cash or other property are converted and the former holders of the shares are entitled only to the rights provided in the articles of merger or to their rights under IC 23-1-44.
    (b) When a share exchange takes effect, the shares of each acquired corporation are exchanged as provided in the plan and the former holders of the shares are entitled only to the exchange rights provided in the articles of share exchange or to their rights under IC 23-1-44.
    (c) After a merger or share exchange takes effect as provided in this section, any terms of the plan of merger or plan of share exchange that are not included in the articles of incorporation shall be considered to be contract rights only, and not part of the governing documents of the corporation.
As added by P.L.149-1986, SEC.24. Amended by P.L.107-1987, SEC.18.

IC 23-1-40-7
Foreign corporations; participation in merger or share exchange
     Sec. 7. (a) One (1) or more foreign corporations may participate in a merger or a share exchange with one (1) or more domestic corporations if:
        (1) in a merger, the merger is permitted by the law of the state or country under whose law each foreign corporation is incorporated and each foreign corporation complies with that law in effecting the merger;
        (2) in a share exchange, the corporation whose shares will be acquired in the share exchange is a domestic corporation, whether or not a share exchange is permitted by the law of the state or country under whose law the acquiring corporation is incorporated;
        (3) the foreign corporation complies with section 5 of this chapter if it is the surviving corporation of the merger or acquiring corporation of the share exchange; and
        (4) each domestic corporation complies with the applicable provisions of sections 1 through 4 of this chapter and, if it is the surviving corporation of the merger or acquiring corporation of the share exchange, with section 5 of this chapter.
    (b) Upon the merger or share exchange taking effect, the surviving foreign corporation of a merger and the acquiring foreign corporation of a share exchange is deemed:
        (1) to appoint the secretary of state as its agent for service of process in a proceeding to enforce any obligation or the rights of dissenting shareholders of each domestic corporation party

to the merger or share exchange; and
        (2) to agree that it will promptly pay to the dissenting shareholders of each domestic corporation party to the merger or share exchange the amount, if any, to which they are entitled under IC 23-1-44.
    (c) This section does not limit the power of a foreign corporation to acquire all or part of the shares of one (1) or more classes or series of a domestic corporation through a voluntary exchange or otherwise.
As added by P.L.149-1986, SEC.24.

IC 23-1-40-8
Requirements for merger of domestic corporation with other business entity; plan of merger; conditions for merger to become effective; merger of other business entities
     Sec. 8. (a) As used in this section, "other business entity" means a limited liability company, limited liability partnership, limited partnership, business trust, real estate investment trust, or any other entity that is formed under the requirements of applicable law and is not otherwise subject to section 1 of this chapter.
    (b) As used in this section, "surviving entity" means the corporation, limited liability company, limited liability partnership, limited partnership, business trust, real estate investment trust, or any other entity that is in existence immediately after consummation of a merger under this section.
    (c) One (1) or more domestic corporations may merge with or into one (1) or more other business entities formed, organized, or incorporated under the laws of Indiana or any other state, the United States, a foreign country, or a foreign jurisdiction if the following requirements are met:
        (1) Each domestic corporation that is a party to the merger complies with the applicable provisions of this chapter.
        (2) Each domestic other business entity that is a party to the merger complies with the requirements of applicable law.
        (3) The merger is permitted by the laws of the state, country, or jurisdiction under which each other business entity that is a party to the merger is formed, organized, or incorporated, and each other business entity complies with the laws in effecting the merger.
        (4) The merging entities approve a plan of merger that sets forth the following:
            (A) The name of each domestic corporation and the name and jurisdiction of formation, organization, or incorporation of each other business entity planning to merge, and the name of the surviving or resulting domestic corporation or other business entity into which each other domestic corporation or other business entity plans to merge.
            (B) The terms and conditions of the merger.
            (C) The manner and basis of converting the shares of each domestic corporation that is a party to the merger and the partnership interests, shares, obligations, or other securities

of each other business entity that is a party to the merger into partnership interests, interests, shares, obligations, or other securities of the surviving entity or any other domestic corporation or other business entity or, in whole or in part, into cash or other property, and the manner and basis of converting rights to acquire the shares of each domestic corporation that is a party to the merger and rights to acquire partnership interests, interests, shares, obligations, or other securities of each other business entity that is a party to the merger into rights to acquire partnership interests, interests, shares, obligations, or other securities of the surviving entity or any other domestic corporation or other business entity or, in whole or in part, into cash or other property.
            (D) If a partnership is to be the surviving entity, the names and business addresses of the general partners of the surviving entity.
            (E) If a limited liability company is to be the surviving entity and management of the limited liability company is vested in one (1) or more managers, the names and business addresses of the managers.
            (F) All statements required to be set forth in the plan of merger by the laws under which each other business entity that is a party to the merger is formed, organized, or incorporated.
        (5) The plan of merger may set forth the following:
            (A) If a domestic corporation is to be the surviving entity, any amendments to, or a restatement of, the articles of incorporation of the surviving entity, and the amendments or restatement will be effective at the effective date of the merger.
            (B) Any other provisions relating to the merger.
    (d) One (1) or more other business entities may merge with or into one (1) or more other business entities formed, organized, or incorporated under the laws of Indiana or under the laws of another jurisdiction, if the following requirements are met:
        (1) Each business entity that is a party to the merger complies with the applicable provisions of this chapter.
        (2) Merger is permitted by the laws of the jurisdiction under which each other entity that is a party to the merger is formed, organized, or incorporated, and each other business entity complies with the laws in effecting the merger.
        (3) The merging entities approve a plan of merger that sets forth the following:
            (A) The name and jurisdiction of formation, organization, or incorporation of each other business entity intending to merge, and the name of the surviving or resulting other business entity into which each other business entity plans to merge.
            (B) The terms and conditions of the merger.
            (C) The manner and basis of converting the partnership

interests, shares, obligations, or other securities of the surviving entity or other business entity, in whole or in part, into cash or other property, and the manner and basis of converting rights to acquire partnership interests, shares, obligations, or other securities of the surviving entity or any other business entity, in whole or in part, into cash or other property.
            (D) If a partnership is to be the surviving entity, the names and business addresses of the general partners of the surviving entity.
            (E) If a limited liability company is to be the surviving entity and management of the limited liability company is vested in one (1) or more managers, the names and business addresses of the managers.
            (F) All statements required to be set forth in the plan of merger by the laws under which each other business entity that is a party to the merger is formed, organized, or incorporated.
        (4) The plan of merger may set forth any other provisions related to the merger.
    (e) The plan of merger required by subsection (c)(4) must be adopted and approved by each domestic corporation that is a party to the merger in the same manner as is provided in this chapter.
    (f) Notwithstanding subsection (c)(4), if the surviving entity is a partnership, a shareholder of a domestic corporation that is a party to the merger does not, as a result of the merger, become a general partner of the surviving entity, and the merger does not become effective under this chapter, unless:
        (1) the shareholder specifically consents in writing to become a general partner of the surviving entity; and
        (2) written consent is obtained from each shareholder who, as a result of the merger, would become a general partner of the surviving entity.
A shareholder providing written consent under this subsection is considered to have voted in favor of the plan of merger for purposes of this chapter.
    (g) This section, to the extent applicable, applies to the merger of one (1) or more domestic corporations with or into one (1) or more other business entities.
    (h) Notwithstanding any other law, a merger consisting solely of the merger of one (1) or more domestic corporations with or into one (1) or more foreign corporations must be consummated solely according to the requirements of this section.
As added by P.L.178-2002, SEC.100. Amended by P.L.178-2005, SEC.6.