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Business Law Title Ix

The document discusses the requirements for mergers and consolidations between corporations according to Title IX of the Corporation Code. It outlines the steps that must be taken which include creating a plan approved by shareholders, filing articles of merger or consolidation with the SEC, and obtaining a certificate of merger or consolidation from the SEC. Upon completion of these steps, the constituent corporations will be merged into a single corporation which will have the combined rights, privileges and property of the pre-existing companies.

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69 views2 pages

Business Law Title Ix

The document discusses the requirements for mergers and consolidations between corporations according to Title IX of the Corporation Code. It outlines the steps that must be taken which include creating a plan approved by shareholders, filing articles of merger or consolidation with the SEC, and obtaining a certificate of merger or consolidation from the SEC. Upon completion of these steps, the constituent corporations will be merged into a single corporation which will have the combined rights, privileges and property of the pre-existing companies.

Uploaded by

rachel banana hammock
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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TITLE IX

MERGER AND CONSOLIDATION

G/R:
A corporation is not liable for the debts of the selling corporation when the former buys the latter’s assets.

Exception:
When any of the following is present: (1) the buyer explicitly or implicitly assumes the debts, (2) the
negotiation signifies a consolidation or merger of the corporations, (3) the buyer just carries on the
corporation of the seller, and (4) the transaction is falsely participated with to escape liability.

SEC. 75. Plan of Merger or Consolidation


The board of directors or trustees of each corporation, participating the merger or consolidation, must
create a plan consisting of the following:
a. Name of the constituent corporations.
b. Terms and mode of merger or consolidation.
c. If merger: Statement of revisions in the articles of incorporation of the continuing corporation.
If consolidation: All declarations required in the presentation of the articles of incorporation.
d. Other necessary provisions regarding the proposed merger or consolidation.

Merger
-one or more living corporations are subsumed by the other and then carries on the merged business.

Insert: Carla Mendoza’s File

Steps to Accomplish a Merger or Consolidation


1. Plan of merger or consolidation.
– Prepared by the board of participating corporation.
Merger: plan includes revision, if vital, to the article of incorporation of the continuing
corporation.
Consolidation: plan includes all declaration required in the articles of incorporation.

2. Compliance of plan to stockholders or members of each corporation for approbation.


– A meeting between all stockholders is conducted at least 21 days after sending the
notice that consists of the summary of the plan. A vote of 2/3 of the stockholders (2/3 of
outstanding capital stock) is necessary. Appropriate appraisal right is respected.

3. Articles of merger or consolidation.


– Execution of the agreement by the officers.
4. Compliance of articles of merger or consolidation to SEC for approbation.

5. Setting up a hearing if upon the investigation, the complied merger or consolidation seems to be
conflicting with existing laws.

6. Issuance of certificate of merger or consolidation by the SEC.

Note: Merger and Consolidation is only effective upon Step 6.

SEC. 79. Effects of Merger or Consolidation


a. Constituent corporation will be a single corporation.
Merger: single corporation is the continuing corporation consigned in the plan of merger.
Consolidation: single corporation is the consolidated corporation consigned in the plan of
consolidation.
b. All the separate existence of consistent corporation, aside from the continuing and consolidated
corporation, shall be terminated.
c. Continuing and consolidated corporation will possess the rights, privileges, immunities, and
powers subjected to all the responsibilities of a corporation created under this Code.
d. Continuing and consolidated corporation will possess the rights, privileges, immunities, and
franchises (including all properties, receivables, and subscriptions of each constituent
corporation.
e. Continuing and consolidated corporation will carry all the responsibilities of the constituent
corporation; including the pending actions and proceedings if there is.

Note: In merger of two or more existing corporations


-only one corporation survives and continues the integrated business; the rest are dissolved but
not liquidated.

Note: Issuance of certificate of merger bears the SEC’s approbation and marks the time when the
effect of a merger takes place.

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