13.1-721 - Effect of merger or share exchange. - Virginia Statutes

§ 13.1-721. Effect of merger or share exchange.

A. When a merger becomes effective:

1. The domestic or foreign corporation or eligible entity that is designatedin the plan of merger as the survivor continues or comes into existence asthe case may be;

2. The separate existence of every domestic or foreign corporation oreligible entity that is merged into the survivor ceases;

3. Property owned by, and, except to the extent that assignment would violatea contractual prohibition on assignment by operation of law, every contractright possessed by, each domestic or foreign corporation or eligible entitythat merges into the survivor is vested in the survivor without reversion orimpairment;

4. All liabilities of each domestic or foreign corporation or eligible entitythat is merged into the survivor are vested in the survivor;

5. The name of the survivor may, but need not be, substituted in any pendingproceeding for the name of any party to the merger whose separate existenceceased in the merger;

6. The articles of incorporation or organic document of the survivor isamended to the extent provided in the plan of merger;

7. The articles of incorporation or organic document of a survivor that iscreated by the merger becomes effective; and

8. The shares of each domestic or foreign corporation that is a party to themerger, and the eligible interests in an eligible entity that is a party tothe merger, that are to be converted under the plan of merger into shares,other securities, eligible interests, obligations, rights to acquiresecurities, other securities, or eligible interests, cash, other property orany combination of the foregoing, are converted, and the former holders ofsuch shares or eligible interests are entitled only to the rights provided tothem in the plan of merger or to any rights they may have under Article 15 (§13.1-729 et seq.) of this chapter or the organic law of the eligible entity.

B. When a share exchange becomes effective, the shares of each domestic orforeign corporation that are to be exchanged for shares and other securities,eligible interests, obligations, rights to acquire shares, other securities,eligible interests, cash, other property or any combination of the foregoing,are entitled only to the rights provided to them in the plan of shareexchange or to any rights they may have under Article 15 (§ 13.1-729 et seq.)of this chapter.

C. Upon a merger becoming effective, a foreign corporation or a foreigneligible entity that is the survivor of the merger is deemed to:

1. Appoint the clerk of the Commission as its agent for service of process ina proceeding to enforce the rights of shareholders of each domesticcorporation that is a party to the merger who exercise appraisal rights; and

2. Agree that it will promptly pay the amount, if any, to which suchshareholders are entitled under Article 15 (§ 13.1-729 et seq.) of thischapter.

D. No corporation that is required by law to be a domestic corporation, may,by merger, cease to be a domestic corporation, but every such corporation,even though a corporation of some other state, the United States or anothercountry, shall also be a domestic corporation of the Commonwealth.

(Code 1950, § 13.1-74; 1956, c. 428; 1962, c. 44; 1975, c. 500; 1985, c. 522;2005, c. 765.)