CHAPTER 19. MERGER
IC 23-17-19
Chapter 19. Merger
IC 23-17-19-1
Authorization; plan; required provisions; optional provisions
Sec. 1. (a) Subject to the limitations in section 2 of this chapter,nonprofit corporations may merge into a business or nonprofitcorporation if the plan of merger is approved under section 3 of thischapter.
(b) A plan of merger must set forth the following:
(1) The name of the following:
(A) Each corporation planning to merge.
(B) The surviving corporation into which each corporationplans to merge.
(2) The terms and conditions of the planned merger.
(3) The manner and basis, if any, of converting thememberships of each public benefit or religious corporationinto memberships of the surviving or other corporation.
(4) If the merger involves a mutual benefit corporation, themanner and basis, if any, of converting memberships of eachmerging corporation into:
(A) memberships, obligations, or securities of the survivingor any other corporation; or
(B) cash or other property in whole or part.
(c) The plan of merger may set forth the following:
(1) Amendments to or a restatement of the articles ofincorporation or bylaws of the surviving corporation to beeffected by the planned merger.
(2) Other provisions relating to the planned merger.
(3) A delayed effective date.
As added by P.L.179-1991, SEC.1.
IC 23-17-19-2
Mergers without prior approval; conditions
Sec. 2. (a) Without the prior approval of the circuit court orsuperior court of the county where the corporation's principal officeor, if the principal office is not located in Indiana, the corporation'sregistered office, is located in a proceeding that the attorney generalhas been given written notice, a public benefit or religiouscorporation may only merge with the following:
(1) A public benefit or religious corporation.
(2) A foreign corporation that would qualify under this articleas a public benefit or religious corporation.
(3) A wholly-owned foreign or domestic business or mutualbenefit corporation if the public benefit or religious corporationis the surviving corporation and continues to be a public benefitor religious corporation after the merger.
(4) A business or mutual benefit corporation if the followingconditions are met:
(A) On or before the effective date of the merger, assets with
a value equal to the greater of the fair market value of the nettangible and intangible assets, including goodwill, of thepublic benefit corporation or the fair market value of thepublic benefit corporation if the corporation were to beoperated as a business concern are transferred or conveyedto a person who would have received the corporation's assetsunder IC 23-17-22-6(a)(5) and IC 23-17-22-6(a)(6) had thecorporation dissolved.
(B) The business or mutual benefit corporation returns,transfers, or conveys any assets held by the business ormutual benefit corporation upon condition requiring return,transfer, or conveyance, that occurs by reason of the merger,in accordance with the condition.
(C) The merger is approved by a majority of directors of thepublic benefit or religious corporation who are not and willnot become:
(i) members in;
(ii) shareholders in; or
(iii) officers, employees, agents, or consultants of;
the surviving corporation.
(D) The requirements of section 8 of this chapter are met.
(b) At least twenty (20) days before consummation of any mergerof a public benefit corporation or a religious corporation undersubsection (a)(4), notice, including a copy of the proposed plan ofmerger, must be delivered to the attorney general.
(c) Without the prior written consent of the attorney general or ofthe circuit court or superior court of the county where:
(1) the corporation's principal office is located; or
(2) if the principal office is not located in Indiana, thecorporation's registered office is located;
in a proceeding in which the attorney general has been given notice,a member of a public benefit or religious corporation may not receiveor keep anything as a result of a merger other than a membership ormembership in the surviving public benefit or religious corporation.The court shall approve the transaction if the transaction is in thepublic interest.
As added by P.L.179-1991, SEC.1.
IC 23-17-19-3
Approval of mergers
Sec. 3. (a) Unless this article, articles of incorporation, bylaws, orthe board of directors or members acting under subsection (c) requirea greater vote or voting by class, a plan of merger to be adopted mustbe approved as follows:
(1) By the board of directors.
(2) By the members, if any, by a majority of the votes cast.
(3) In writing by a person whose approval is required by articlesof incorporation authorized under IC 23-17-17-1 for anamendment to articles of incorporation or bylaws.
(b) If a corporation does not have members, a merger must be
approved by a majority of the directors in office at the time themerger is approved. In addition, the corporation shall provide noticeof any directors meeting at which the approval is to be obtainedunder IC 23-17-15-3. The notice must also state that the purpose ofthe meeting is to consider the proposed merger.
(c) Unless articles of incorporation provide otherwise, a proposedmerger and plan of merger must be initiated by a board of directors.The board of directors may condition the submission of the proposedmerger on receipt of a higher percentage of affirmative votes of themembers or on another basis.
(d) If a board of directors seeks to have the plan approved by themembers at a membership meeting, the corporation shall give noticeto the corporation's members of the proposed membership meetingunder IC 23-17-10-5. The notice must also state that the purpose ofthe meeting is to consider the plan of merger and contain or beaccompanied by a copy or summary of the plan. The copy orsummary of the plan for members of the surviving corporation mustinclude a provision that, if contained in a proposed amendment toarticles of incorporation or bylaws, would entitle members to vote onthe provision. The copy or summary of the plan for members of thedisappearing corporation must include a copy or summary of thearticles of incorporation and bylaws that will be in effectimmediately after the merger takes effect.
(e) If a board of directors seeks to have a plan approved by themembers by written consent or written ballot, the material solicitingthe approval must contain or be accompanied by a copy or summaryof the plan. The copy or summary of the plan for members of thesurviving corporation must include a provision that, if contained ina proposed amendment to the articles of incorporation or bylaws,would entitle members to vote on the provision. The copy orsummary of the plan for members of the disappearing corporationmust include a copy or summary of the articles and bylaws that willbe in effect immediately after the merger takes effect.
(f) Voting by a class of members is required on a plan of mergerif the plan contains a provision that, if contained in a proposedamendment to articles of incorporation or bylaws, would entitle theclass of members to vote as a separate voting group on the proposedamendment under IC 23-17-17-6 or IC 23-17-18-2. The plan isapproved by a class of members by a majority of the votes cast by theclass.
(g) After a merger is adopted and before articles of merger arefiled, the planned merger may be abandoned subject to anycontractual rights without further action by members or other personswho approved the plan:
(1) under the procedure set forth in the plan of merger; or
(2) if a procedure is not set forth, in the manner determined bythe board of directors.
As added by P.L.179-1991, SEC.1. Amended by P.L.1-1992,SEC.127; P.L.96-1993, SEC.13.
IC 23-17-19-4
Articles of merger; contents; effective date; filing
Sec. 4. (a) After a plan of merger is approved by the board ofdirectors and if required by section 3 of this chapter by the membersand any other persons, the surviving or acquiring corporation shalldeliver to the secretary of state articles of merger setting forth thefollowing:
(1) The plan of merger.
(2) If approval of members was not required, a statement to thateffect and a statement that the plan was approved by a sufficientvote of the board of directors.
(3) If approval by members was required, the following:
(A) The designation, number of memberships outstanding,number of votes entitled to be cast by each class entitled tovote separately on the plan, and number of votes of eachclass indisputably voting on the plan.
(B) Either the total number of votes cast for and against theplan by each class entitled to vote separately on the plan orthe total number of undisputed votes cast for the plan byeach class and a statement that the number cast for the planby each class was sufficient for approval by that class.
(4) If approval of the plan by a person other than the membersor the board of directors is required under section 3(a)(3) of thischapter, a statement that the approval was obtained.
(b) Unless a delayed effective date is specified, a merger takeseffect when the articles of merger are 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 a merging corporationhas real property 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 plan of merger sets forth amendments to the articles ofincorporation of the surviving corporation that change the survivingcorporation's corporate name, a file-stamped copy of the articles ofmerger may be filed for record with the county recorder of eachcounty in Indiana in which the surviving corporation has realproperty at the time the merger becomes effective. A failure to recorda copy of the articles of merger under this subsection does not affectthe validity of the merger or the change in corporate name.
As added by P.L.179-1991, SEC.1.
IC 23-17-19-5
Effect of mergers
Sec. 5. (a) When a merger takes effect the following occur:
(1) Another corporation party to the merger merges into thesurviving corporation and the separate existence of everycorporation except the surviving corporation ceases.
(2) The title to real property and other property owned by eachcorporation party to the merger is vested in the survivingcorporation without reversion or impairment subject to any
conditions to which the property was subject before the merger.
(3) The surviving corporation has all liabilities and obligationsof each corporation party to the merger.
(4) A proceeding pending against a corporation party to themerger may be continued as if the merger did not occur or thesurviving corporation may be substituted in the proceeding forthe corporation whose existence ceased.
(5) The articles of incorporation and bylaws of the survivingcorporation are amended to the extent provided in the plan ofmerger.
(b) After a merger takes effect as provided in this article, anyterms of the plan of merger that are not included in the articles ofincorporation shall be considered to be contract rights only and notpart of the governing document of the corporation.
As added by P.L.179-1991, SEC.1.
IC 23-17-19-6
Foreign corporations
Sec. 6. (a) Except as provided in section 2 of this chapter, foreignbusiness or nonprofit corporations may merge with domesticnonprofit corporations if the following conditions are met:
(1) The merger is permitted by the law of the state or countryunder whose laws each foreign corporation is incorporated andeach foreign corporation complies with that law in effecting themerger.
(2) The foreign corporation complies with section 4 of thischapter if the foreign corporation is the surviving corporationof the merger.
(3) Each domestic nonprofit corporation complies with sections1 through 3 of this chapter and, if the domestic nonprofitcorporation is the surviving corporation of the merger, withsection 4 of this chapter.
(b) Upon the merger taking effect, the surviving foreign businessor nonprofit corporation is considered to have irrevocably appointedthe secretary of state as the agent for service of process for thebusiness or corporation in any proceeding brought against thebusiness or corporation.
As added by P.L.179-1991, SEC.1.
IC 23-17-19-7
Bequests, devises, gifts, grants, or premises
Sec. 7. A bequest, devise, gift, grant, or promise contained in awill or other instrument of donation, subscription, or conveyancethat:
(1) is made to a constituent corporation; and
(2) takes effect or remains payable after the merger;
inures to the surviving corporation unless a will or other instrumentotherwise specifically provides.
As added by P.L.179-1991, SEC.1.
IC 23-17-19-8
Compliance with related provisions
Sec. 8. A domestic business corporation that is a party to a mergerwith a nonprofit corporation under this chapter shall comply with allapplicable requirements of IC 23-1 relating to mergers except wheninconsistent with this chapter. A domestic business corporation thatis the survivor of a merger with a nonprofit corporation is subject toIC 23-1 after the merger.
As added by P.L.179-1991, SEC.1.