Title Ix Merger and Consolidation
Title Ix Merger and Consolidation
Title Ix Merger and Consolidation
in the strict legal sense, the mere sale of all its property by a corporation and the
distribution of its assets do not work a dissolution of the corporation inasmuch as
possession of property is not essential to corporate existence
but if in the agreement, a new corporation expressly acquired the assets and properties
and assumed the obligations and liabilities of an old corporation which it succeeded, the
former cannot excuse itself from said obligations and liabilities on the argument that said
two corporations are distinct and separate
the sale of assets for stock, if followed by dissolution has the effect of a merger
2. lease of assets – a corporation without being dissolved, leases its property to another
corporation for which the lessor merely receives rental paid by the lessee
3. sale of stock – the purpose of a holding company is to acquire a sufficient amount of the
stock of another corporation for the purpose of control
the acquiring corporation Is called the parent or holding company
subsidiary corporation – the corporation whose stocks are acquired
in these three cases of corporate combination, the legal identity of each corporation is retained
4. merger – two or more corporations unite, one corporation which remains in being,
absorbing or merging in itself the other which disappears as a separate corporation
5. consolidation – two or more corporation unite, giving rise to a new corporate body and
dissolving the constituent corporations as separate corporations
Procedure for affecting a plan of merger or consolidation
1. approval of plan - 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 mode of carrying the same into
effect
c. A statement of the changes, if any, in the articles of incorporation of the
surviving corporation in 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
d. Such other provisions with respect to the proposed merger or consolidation as are
deemed necessary or desirable
2. Submission to stockholders or members for 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
Even the holders of non-voting shares or non-voting members as the case may be are
entitled to vote on the plan
Right of appraisal : Any dissenting stockholder may exercise the right of appraisal
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