CHAPTER 40. MERGER AND SHARE EXCHANGE
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 anothercorporation if the board of directors of each corporation adopts andits shareholders (if required by section 3 of this chapter) approve aplan of merger.
(b) The plan of merger must set forth:
(1) the name of each corporation planning to merge and thename of the surviving corporation into which each othercorporation plans to merge;
(2) the terms and conditions of the merger; and
(3) the manner and basis of converting the shares of eachcorporation into shares, obligations, or other securities of thesurviving or any other corporation or into cash or other propertyin whole or in part.
(c) The plan of merger may set forth:
(1) amendments to the articles of incorporation of the survivingcorporation; 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 sharesof one (1) or more classes or series of another corporation if theboard of directors of each corporation adopts and its shareholders (ifrequired 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 acquiredand 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 beacquired for shares, obligations, or other securities of theacquiring or any other corporation or for cash or other propertyin whole or in part.
(c) The plan of exchange may set forth other provisions relatingto the exchange.
(d) This section does not limit the power of a corporation toacquire all or part of the shares of one (1) or more classes or seriesof 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, theboard of directors of each corporation party to the merger, and the
board of directors of the corporation whose shares will be acquiredin the share exchange, shall submit the plan of merger (except asprovided in subsection (g)) or share exchange for approval by itsshareholders.
(b) For a plan of merger or share exchange to be approved:
(1) the board of directors must recommend the plan of mergeror share exchange to the shareholders, unless the board ofdirectors determines that because of conflict of interest or otherspecial circumstances it should make no recommendation andcommunicates the basis for its determination to the shareholderswith the plan; and
(2) the shareholders entitled to vote must approve the plan.
(c) The board of directors may condition its submission of theproposed merger or share exchange on any basis.
(d) The corporation shall notify each shareholder, whether or notentitled to vote, of the proposed shareholders' meeting in accordancewith 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 mergeror share exchange and must contain or be accompanied by a copy orsummary of the plan.
(e) Unless this article, the articles of incorporation, or the boardof directors (acting under subsection (c)) requires a greater vote ora vote by voting groups, the plan of merger or share exchange to beauthorized must be approved by each voting group entitled to voteseparately on the plan by a majority of all the votes entitled to be caston 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, ifcontained in a proposed amendment to articles of incorporation,would require action by one (1) or more separate voting groupson the proposed amendment under IC 23-1-38-4; or
(2) on a plan of share exchange by each class or series of sharesincluded in the exchange, with each class or series constitutinga separate voting group.
(g) Action by the shareholders of the surviving corporation on aplan of merger is not required if:
(1) the articles of incorporation of the surviving corporationwill not differ (except for amendments enumerated inIC 23-1-38-2) from its articles before the merger;
(2) each shareholder of the surviving corporation whose shareswere outstanding immediately before the effective date of themerger will hold the same proportionate number of sharesrelative to the number of shares held by all such shareholders(except for shares of the surviving corporation received solelyas a result of the shareholder's proportionate shareholdings inthe other corporations party to the merger), with identicaldesignations, preferences, limitations, and relative rights,immediately after;
(3) the number of voting shares outstanding immediately afterthe merger, plus the number of voting shares issuable as a result
of the merger (either by the conversion of securities issuedpursuant to the merger or the exercise of rights and warrantsissued pursuant to the merger), will not exceed by more thantwenty percent (20%) the total number of voting shares(adjusted to reflect any forward or reverse share split thatoccurs under the plan of merger) of the surviving corporationoutstanding immediately before the merger; and
(4) the number of participating shares outstanding immediatelyafter the merger, plus the number of participating sharesissuable as a result of the merger (either by the conversion ofsecurities issued pursuant to the merger or the exercise of rightsand warrants issued pursuant to the merger), will not exceed bymore than twenty percent (20%) the total number ofparticipating shares (adjusted to reflect any forward or reverseshare split that occurs under the plan of merger) outstandingimmediately before the merger.
(h) As used in subsection (g):
(1) "Participating shares" means shares that entitle their holdersto participate without limitation in distributions.
(2) "Voting shares" means shares that entitle their holders tovote unconditionally in elections of directors.
(i) After a merger or share exchange is authorized, and at any timebefore articles of merger or share exchange are filed, the plannedmerger or share exchange may be abandoned (subject to anycontractual rights), without further shareholder action, in accordancewith the procedure set forth in the plan of merger or share exchangeor, if none is set forth, in the manner determined by the board ofdirectors.
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 subsidiarycorporation may merge the subsidiary and the parent corporationwithout approval of the shareholders of the parent or subsidiary.
(b) If the parent corporation will be the surviving corporation, theboard of directors of the parent shall adopt a plan of merger that setsforth:
(1) the names of the parent and subsidiary; and
(2) the manner and basis of converting the shares of thesubsidiary into shares, obligations, or other securities of theparent or any other corporation or into cash or other property inwhole or in part.
(c) The parent shall mail a copy or summary of the plan of mergerto each shareholder of the subsidiary who does not waive the mailingrequirement in writing.
(d) The parent may not deliver articles of merger to the secretaryof 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 subsidiarywho did not waive the mailing requirement.
(e) The articles of incorporation of the parent corporation that arein effect immediately before the effective date of the mergerconstitute the articles of incorporation of the surviving corporation,and articles of merger under this section may not containamendments to the articles of incorporation of the parent corporation(except for amendments enumerated in IC 23-1-38-2). If thesubsidiary is a domestic corporation and will be the survivingcorporation of a merger with a parent that is a foreign corporation,the articles of incorporation of the parent corporation that will beinherited by the subsidiary upon the effective date of the merger shallbe delivered to the secretary of state for filing together with thearticles of merger to be delivered for filing under section 5(a) of thischapter.
(f) If the parent corporation will not be the surviving corporation,the board of directors of the parent shall adopt a plan of merger thatsets forth:
(1) the names of the parent and subsidiary; and
(2) the manner and basis of converting the shares of the parentinto shares of the surviving corporation.
(g) A plan adopted under subsection (f) must ensure that eachshareholder of the parent corporation whose shares were outstandingimmediately before the effective date of the merger will hold thesame proportionate number of shares relative to the number of sharesheld by all such shareholders (except for shares of the survivingcorporation received solely as a result of the shareholder'sproportionate shareholdings in any other corporations besides theparent which are parties to the merger), with identical designations,preferences, limitations, and relative rights, of the survivingcorporation immediately after that effective date. If the plan providesthat the shareholders of the subsidiary (other than the parent) will notbe shareholders of the surviving corporation immediately after thateffective date, the plan must also set forth the manner and basis ofconverting the shares of the subsidiary held by such shareholders intoobligations or other securities of the surviving corporation or shares,obligations, or other securities of any other corporation or into cashor 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 shareexchange
Sec. 5. (a) After a plan of merger or share exchange is approvedby the shareholders, or adopted by the board of directors ifshareholder approval is not required, the surviving or acquiringcorporation shall deliver to the secretary of state for filing articles ofmerger 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 thateffect;
(3) if approval of the shareholders of one (1) or morecorporations party to the merger or share exchange wasrequired:
(A) the designation, number of outstanding shares, andnumber of votes entitled to be cast by each voting groupentitled to vote separately on the merger or share exchangeas to each corporation; and
(B) either the total number of votes cast for and against themerger or share exchange by each voting group entitled tovote separately on the merger or share exchange or the totalnumber of undisputed votes cast for the merger or shareexchange separately by each voting group and a statementthat the number cast for the merger or share exchange byeach voting group was sufficient for approval by that votinggroup.
(b) Unless a delayed effective date is specified, a merger or shareexchange takes effect when the articles of merger or share exchangeare filed.
(c) The surviving corporation resulting from a merger may, afterthe merger has become effective, file for record with the countyrecorder of each county in Indiana in which the corporation has realproperty at the time of the merger, the title to which will betransferred by the merger, a file-stamped copy of the articles ofmerger. If the articles of merger set forth amendments to the articlesof incorporation of the surviving corporation that change itscorporate name, a file-stamped copy of the articles of merger may befiled for record with the county recorder of each county in Indiana inwhich the surviving or acquiring corporation has any real property atthe time the merger becomes effective. A failure to record a copy ofthe articles of merger under this subsection does not affect thevalidity 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 thesurviving corporation and the separate existence of everycorporation except the surviving corporation ceases;
(2) the title to all real estate and other property owned by eachcorporation party to the merger is vested in the survivingcorporation without reversion or impairment;
(3) the surviving corporation has all liabilities of eachcorporation party to the merger;
(4) a proceeding pending against any corporation party to themerger may be continued as if the merger did not occur or the
surviving corporation may be substituted in the proceeding forthe corporation whose existence ceased;
(5) the articles of incorporation of the surviving corporation areamended to the extent provided in the plan of merger; and
(6) the shares of each corporation party to the merger that are tobe converted into shares, obligations, or other securities of thesurviving or any other corporation or into cash or other propertyare converted and the former holders of the shares are entitledonly to the rights provided in the articles of merger or to theirrights under IC 23-1-44.
(b) When a share exchange takes effect, the shares of eachacquired corporation are exchanged as provided in the plan and theformer holders of the shares are entitled only to the exchange rightsprovided in the articles of share exchange or to their rights underIC 23-1-44.
(c) After a merger or share exchange takes effect as provided inthis section, any terms of the plan of merger or plan of shareexchange that are not included in the articles of incorporation shallbe considered to be contract rights only, and not part of thegoverning 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 participatein a merger or a share exchange with one (1) or more domesticcorporations if:
(1) in a merger, the merger is permitted by the law of the stateor country under whose law each foreign corporation isincorporated and each foreign corporation complies with thatlaw in effecting the merger;
(2) in a share exchange, the corporation whose shares will beacquired in the share exchange is a domestic corporation,whether or not a share exchange is permitted by the law of thestate or country under whose law the acquiring corporation isincorporated;
(3) the foreign corporation complies with section 5 of thischapter if it is the surviving corporation of the merger oracquiring corporation of the share exchange; and
(4) each domestic corporation complies with the applicableprovisions of sections 1 through 4 of this chapter and, if it is thesurviving corporation of the merger or acquiring corporation ofthe share exchange, with section 5 of this chapter.
(b) Upon the merger or share exchange taking effect, the survivingforeign corporation of a merger and the acquiring foreign corporationof a share exchange is deemed:
(1) to appoint the secretary of state as its agent for service ofprocess in a proceeding to enforce any obligation or the rightsof dissenting shareholders of each domestic corporation party
to the merger or share exchange; and
(2) to agree that it will promptly pay to the dissentingshareholders of each domestic corporation party to the mergeror share exchange the amount, if any, to which they are entitledunder IC 23-1-44.
(c) This section does not limit the power of a foreign corporationto acquire all or part of the shares of one (1) or more classes or seriesof 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 otherbusiness entity; plan of merger; conditions for merger to becomeeffective; merger of other business entities
Sec. 8. (a) As used in this section, "other business entity" meansa limited liability company, limited liability partnership, limitedpartnership, business trust, real estate investment trust, or any otherentity that is formed under the requirements of applicable law and isnot otherwise subject to section 1 of this chapter.
(b) As used in this section, "surviving entity" means thecorporation, limited liability company, limited liability partnership,limited partnership, business trust, real estate investment trust, or anyother entity that is in existence immediately after consummation ofa merger under this section.
(c) One (1) or more domestic corporations may merge with or intoone (1) or more other business entities formed, organized, orincorporated under the laws of Indiana or any other state, the UnitedStates, a foreign country, or a foreign jurisdiction if the followingrequirements are met:
(1) Each domestic corporation that is a party to the mergercomplies with the applicable provisions of this chapter.
(2) Each domestic other business entity that is a party to themerger complies with the requirements of applicable law.
(3) The merger is permitted by the laws of the state, country, orjurisdiction under which each other business entity that is aparty to the merger is formed, organized, or incorporated, andeach other business entity complies with the laws in effectingthe merger.
(4) The merging entities approve a plan of merger that sets forththe following:
(A) The name of each domestic corporation and the nameand jurisdiction of formation, organization, or incorporationof each other business entity planning to merge, and thename of the surviving or resulting domestic corporation orother business entity into which each other domesticcorporation 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 eachdomestic corporation that is a party to the merger and thepartnership interests, shares, obligations, or other securities
of each other business entity that is a party to the merger intopartnership interests, interests, shares, obligations, or othersecurities of the surviving entity or any other domesticcorporation or other business entity or, in whole or in part,into cash or other property, and the manner and basis ofconverting rights to acquire the shares of each domesticcorporation that is a party to the merger and rights to acquirepartnership interests, interests, shares, obligations, or othersecurities of each other business entity that is a party to themerger into rights to acquire partnership interests, interests,shares, obligations, or other securities of the surviving entityor 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 namesand business addresses of the general partners of thesurviving entity.
(E) If a limited liability company is to be the surviving entityand management of the limited liability company is vestedin one (1) or more managers, the names and businessaddresses of the managers.
(F) All statements required to be set forth in the plan ofmerger by the laws under which each other business entitythat is a party to the merger is formed, organized, orincorporated.
(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 ofincorporation of the surviving entity, and the amendments orrestatement will be effective at the effective date of themerger.
(B) Any other provisions relating to the merger.
(d) One (1) or more other business entities may merge with or intoone (1) or more other business entities formed, organized, orincorporated under the laws of Indiana or under the laws of anotherjurisdiction, if the following requirements are met:
(1) Each business entity that is a party to the merger complieswith the applicable provisions of this chapter.
(2) Merger is permitted by the laws of the jurisdiction underwhich each other entity that is a party to the merger is formed,organized, or incorporated, and each other business entitycomplies with the laws in effecting the merger.
(3) The merging entities approve a plan of merger that sets forththe following:
(A) The name and jurisdiction of formation, organization, orincorporation of each other business entity intending tomerge, and the name of the surviving or resulting otherbusiness entity into which each other business entity plansto 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 thesurviving entity or other business entity, in whole or in part,into cash or other property, and the manner and basis ofconverting rights to acquire partnership interests, shares,obligations, or other securities of the surviving entity or anyother business entity, in whole or in part, into cash or otherproperty.
(D) If a partnership is to be the surviving entity, the namesand business addresses of the general partners of thesurviving entity.
(E) If a limited liability company is to be the surviving entityand management of the limited liability company is vestedin one (1) or more managers, the names and businessaddresses of the managers.
(F) All statements required to be set forth in the plan ofmerger by the laws under which each other business entitythat is a party to the merger is formed, organized, orincorporated.
(4) The plan of merger may set forth any other provisionsrelated to the merger.
(e) The plan of merger required by subsection (c)(4) must beadopted and approved by each domestic corporation that is a party tothe merger in the same manner as is provided in this chapter.
(f) Notwithstanding subsection (c)(4), if the surviving entity is apartnership, a shareholder of a domestic corporation that is a party tothe merger does not, as a result of the merger, become a generalpartner of the surviving entity, and the merger does not becomeeffective under this chapter, unless:
(1) the shareholder specifically consents in writing to becomea general partner of the surviving entity; and
(2) written consent is obtained from each shareholder who, asa result of the merger, would become a general partner of thesurviving entity.
A shareholder providing written consent under this subsection isconsidered to have voted in favor of the plan of merger for purposesof this chapter.
(g) This section, to the extent applicable, applies to the merger ofone (1) or more domestic corporations with or into one (1) or moreother business entities.
(h) Notwithstanding any other law, a merger consisting solely ofthe merger of one (1) or more domestic corporations with or into one(1) or more foreign corporations must be consummated solelyaccording to the requirements of this section.
As added by P.L.178-2002, SEC.100. Amended by P.L.178-2005,SEC.6.