Revised Corporation Code: Title IX – Merger and Consolidation

TITLE IX – MERGER AND CONSOLIDATION

Section 75. Plan of Merger or Consolidation. – Two or more corporations may merge into a single corporation which shall be one of the constituent corporations or may consolidate into a new single corporation which shall be consolidated corporation.

The board of directors or trustees of each corporation, party to the merger or consolidation, shall approve a plan of merger or consolidation setting forth the following:

• (a) The names of the corporations proposing to merge or consolidate, hereinafter referred to as the constituent corporations;
• (b) The terms of the merger or consolidation and the more of carrying the same into effect;
• (c) A statement of the changes, if any, in the articles of incorporation of the surviving corporation in the case of merger; and, in case of consolidation, all the statements required to be set forth in the articles of incorporation for corporations organized under this Code; and,
• (d) Such other provisions with respect to the proposed merger or consolidation as are deemed necessary or desirable.

Section 76. Stockholder’s or Member’s Approval. – Upon approval by a majority vote of each of the board of directors or trustees of the constituent corporations of the plan of merger or consolidation, the same shall be submitted for approval by the stockholders or members of each of such corporations at separate corporate meetings duly called for the purpose. Notice of such meetings shall be given to all stockholders or members of the respective corporations in the same manner as giving notice of the regular or special meetings under Section 49 of this Code. The notice shall state the purpose of the meeting and include a copy or a summary of the plan of merger or consolidation.

The affirmative vote of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock of each corporation in the case of stock corporations or at least two-thirds (2/3) of the members in the case of nonstock corporations shall be necessary for the approval of such plan. Any dissenting stockholder may exercise the right of appraisal in accordance with this Code: Provided, That if after the approval by the stockholders of such plan, the board of directors decides to abandon the plan, the right of appraisal shall be extinguished.

Any amendment to the plan of merger or consolidation may be made: Provide, That such amendment is approved by a majority vote of the respective boards of directors or trustees of all the constituent corporations. Such plan, together with any amendment, shall be considered as the agreement of merger or consolidation.

Section 77. Articles of Merger or Consolidation. – After the approval by the stockholders or members as required by the preceding section, articles of merger or articles of consolidation shall be executed by each of the constituent corporations, to be signed by the president or vice president and certified by the secretary or assistant secretary setting forth:

• (a) The plan of merger or the plan of consolidation;
• (b) As to stock corporations, the number of shares outstanding, or in the case of nonstock corporations, the number of members;
• (c) As to each corporation, the number of shares or members for or against such plan, respectively;
• (d) The carrying amounts and fair values of the assets and liabilities of the respective companies as of the agreed cut-off date;
• (e) The method to be used in the merger or consolidation of accounts of the companies;
• (f) The provisional or pro forma values, as merged or consolidated, using the accounting method; and
• (g) Such other information as may be prescribed by the Commission.

Section 78. Effectivity of Merger or Consolidation. – The articles of merger or of consolidation, signed and certified as required by this Code, shall be submitted to the Commission for its approval: Provided, That in the case of merger or consolidation of banks or banking institutions, loan associations, trust companies, insurance companies, public utilities, educational institutions, and other special corporations governed by special laws, the favorable recommendation of the appropriate government agency shall first be obtained. If the Commission is satisfied that the merger or consolidation of the corporations concerned is consistent with the provisions of this Code and existing laws, it shall issue a certificate approving the articles and plan of merger or of consolidation, at which time the merger or consolidation shall be effective.

If upon investigation, the Commission has reason to believe that the proposed merger or consolidation is contrary to or inconsistent with the provisions of this Code or existing laws, it shall set a hearing to give the corporations concerned the opportunity to be heard. Written notice of the date, time, and place of hearing shall be given to each constituent corporations at least two (2) weeks before said hearing. The Commission shall thereafter proceed as provided in this Code.

Section 79. Effects of Merger or Consolidation. – The merger or consolidation shall have the following effects:

• (a) The constituent corporations shall become a single corporation which, in case of merger, shall be surviving corporation designated in the plan of merger; and, in case of consolidation, shall be the consolidated corporation designation in the plan of consolidation;
• (b) The separate existence of the constituent corporations shall cease, except that of the surviving or the consolidated corporation;
• (c) The surviving or the consolidated corporation shall process all the rights, privileges, immunities, and powers and shall be subject to all the duties and liabilities of a corporation organized under this Code;
• (d) The surviving or consolidated corporation shall possess all the rights, privileges, immunities and franchise of each constituent corporation; and all real or personal property, all receivables due on whatever account, including subscriptions to shares and other choses in action, and every other interest of, belonging to, or due to each constituent corporation, shall be deemed transferred to and vested in such surviving or consolidated corporation without further act or deed; and, (e) The surviving or consolidated corporation shall be responsible for all the liabilities and obligations of each constituent corporation as though such surviving or consolidated corporation had itself incurred such liabilities or obligations; and any pending claim, action or proceeding brought by or against any constituent corporation may be prosecuted by or against the surviving or consolidated corporation. The rights of creditors or liens upon the property of such constituent corporations shall not be impaired by the merger or consolidation.

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