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

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

(a)        As used in thissection, "business entity" means a domestic business corporation(including a professional corporation as defined in G.S. 55B‑2), aforeign business corporation (including a foreign professional corporation asdefined in G.S. 55B‑16), a domestic or foreign nonprofit corporation, adomestic or foreign limited liability company, a domestic or foreign limitedpartnership, a registered limited liability partnership or foreign limitedliability partnership as defined in G.S. 59‑32, or any other partnershipas defined in G.S. 59‑36 whether or not formed under the laws of thisState.

(b)        One or moredomestic nonprofit corporations may merge with one or more unincorporatedentities and, if desired, one or more foreign nonprofit corporations, domesticbusiness corporations, or foreign business corporations if:

(1)        The merger ispermitted by the laws of the state or country governing the organization andinternal affairs of each of the other merging business entities;

(2)        Each mergingdomestic nonprofit corporation and each other merging business entity complywith the requirements of this section and, to the extent applicable, the lawsreferred to in subdivision (1) of this subsection; and

(3)        The merger complieswith G.S. 55A‑11‑02, if applicable.

(c)        Each mergingdomestic nonprofit corporation and each other merging business entity shallapprove a written plan of merger containing:

(1)        For each mergingbusiness entity, its name, type of business entity, and the state or countrywhose laws govern its organization and internal affairs;

(2)        The name of themerging business entity that shall survive the merger;

(3)        The terms andconditions of the merger;

(4)        The manner and basisfor converting the interests in each merging business entity into interests,obligations, or securities of the surviving business entity or into cash orother property in whole or in part; and

(5)        If the survivingbusiness entity is a domestic nonprofit corporation, any amendments to itsarticles of incorporation that are to be made in connection with the merger.

(c1)      The plan of mergermay contain other provisions relating to the merger.

(c2)      The provisions ofthe 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 factsobjectively ascertainable outside the plan of merger if the plan of merger setsforth the manner in which the facts will operate upon the affected provisions.The facts may include any of the following:

(1)        Statistical ormarket indices, market prices of any security or group of securities, interestrates, currency exchange rates, or similar economic or financial data.

(2)        A determination oraction by the domestic nonprofit corporation or by any other person, group, orbody.

(3)        The terms of, oractions taken under, an agreement to which the domestic nonprofit corporationis a party, or any other agreement or document.

(c3)      In the case of amerging domestic nonprofit corporation, approval of the plan of merger requiresthat 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 havepersonal liability for any existing or future obligation of the survivingbusiness entity solely as a result of holding an interest in the survivingbusiness entity, then in addition to the requirements of G.S. 55A‑11‑03,approval of the plan of merger by the domestic nonprofit corporation shallrequire the affirmative vote or written consent of the member. In the case ofeach other merging business entity, the plan of merger must be approved inaccordance with the laws of the state or country governing the organization andinternal affairs of such merging business entity.

(c4)      After a plan ofmerger has been approved by a domestic nonprofit corporation but before thearticles of merger become effective, the plan of merger (i) may be amended asprovided in the plan of merger, or (ii) may be abandoned (subject to anycontractual rights) as provided in the plan of merger or, if there is no suchprovision, as determined by the board of directors.

(d)        After a plan ofmerger has been approved by each merging domestic nonprofit corporation andeach other merging business entity as provided in subsection (c) of thissection, the surviving business entity shall deliver articles of merger to theSecretary of State for filing. The articles of merger shall set forth:

(1)        Repealed by SessionLaws 2005, c. 268, s. 45.

(2)        For each merging businessentity, its name, type of business entity, and the state or country whose lawsgovern its organization and internal affairs.

(3)        The name of themerging business entity that will survive the merger and, if the survivingbusiness entity is not authorized to transact business or conduct affairs inthis State, a designation of its mailing address and a commitment to file withthe Secretary of State a statement of any subsequent change in its mailingaddress.

(3a)      If the survivingbusiness entity is a domestic corporation, any amendment to its articles ofincorporation as provided in the plan of merger.

(4)        A statement that theplan of merger has been approved by each merging business entity in the mannerrequired by law.

(5)        Repealed by SessionLaws 2005, c. 268, s. 45.

If the plan of merger isamended after the articles of merger have been filed but before the articles ofmerger become effective, and any statement in the articles of merger becomesincorrect as a result of the amendment, the surviving business entity shalldeliver to the Secretary of State for filing prior to the time the articles ofmerger become effective an amendment to the articles of merger  correcting theincorrect statement. If the articles of merger are abandoned after the articlesof merger are filed but before the articles of merger become effective, thesurviving business entity shall deliver to the Secretary of State for filingprior to the time the articles of merger become effective an amendmentreflecting abandonment of the plan of merger.

Certificates of merger shallalso be registered as provided in G.S. 47‑18.1.

(e)        A merger takeseffect when the articles of merger become effective. When a merger takeseffect:

(1)        Each other mergingbusiness entity merges into the surviving business entity and the separateexistence of each merging business entity except the surviving business entityceases;

(2)        The title to allreal estate and other property owned by each merging business entity is vestedin the surviving business entity without reversion or impairment;

(3)        The survivingbusiness entity has all liabilities of each merging business entity;

(4)        A proceeding pendingby or against any merging business entity may be continued as if the merger didnot occur, or the surviving business entity may be substituted in theproceeding for a merging business entity whose separate existence ceases in themerger;

(5)        If a domesticnonprofit corporation is the surviving business entity, its articles ofincorporation shall be amended to the extent provided in the articles ofmerger;

(6)        The interests ineach merging business entity that are to be converted into interests,obligations, or securities of the surviving business entity or into the rightto receive cash or other property are thereupon so converted, and the formerholders of the interests are entitled only to the rights provided to them inthe plan of merger or, in the case of former holders of shares in a domesticbusiness corporation, any rights they may have under Article 13 of Chapter 55of the General Statutes; and

(7)        If the survivingbusiness entity is not a domestic business corporation, the surviving businessentity is deemed to agree that it will promptly pay to the dissentingshareholders of any merging domestic business corporation the amount, if any,to which they are entitled under Article 13 of Chapter 55 of the GeneralStatutes and otherwise to comply with the requirements of Article 13 as if itwere a surviving domestic business corporation in the merger.

The merger shall not affectthe liability or absence of liability of any holder of an interest in a mergingbusiness entity for any acts, omissions, or obligations of any merging businessentity made or incurred prior to the effectiveness of the merger. The cessationof separate existence of a merging business entity in the merger shall notconstitute a dissolution or termination of the merging business entity.

(e1)      If the survivingbusiness entity is not a domestic limited liability company, a domesticbusiness corporation, a domestic nonprofit corporation, or a domestic limitedpartnership, when the merger takes effect the surviving business entity isdeemed:

(1)        To agree that it maybe served with process in this State in any proceeding for enforcement of (i)any obligation of any merging domestic limited liability company, domesticbusiness corporation, domestic nonprofit corporation, domestic limitedpartnership, or other partnership as defined in G.S. 59‑36 that is formedunder the laws of this State, (ii) the rights of dissenting shareholders of anymerging domestic business corporation under Article 13 of Chapter 55 of theGeneral Statutes, and (iii) any obligation of the surviving business entityarising from the merger; and

(2)        To have appointedthe Secretary of State as its agent for service of process in any suchproceeding. Service on the Secretary of State of any such process shall be madeby delivering to and leaving with the Secretary of State, or with any clerkauthorized by the Secretary of State to accept service of process, duplicatecopies 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 inthe manner provided for in this section, the Secretary of State shallimmediately mail a copy of the process by registered or certified mail, returnreceipt requested, to the surviving business entity. If the surviving businessentity is authorized to transact business or conduct affairs in this State, theaddress for mailing shall be its principal office designated in the latestdocument filed with the Secretary of State that is authorized by law todesignate the principal office or, if there is no principal office on file, itsregistered office. If the surviving business entity is not authorized totransact business or conduct affairs in this State, the address for mailingshall be the mailing address designated pursuant to subdivision (3) ofsubsection (d) of this section.

(f)         This section doesnot apply to a merger that does not include a merging unincorporated entity. (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.)