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2005 California Corporations Code Sections 15678.1-15678.10 Article 7.5. Merger
CORPORATIONS CODESECTION 15678.1-15678.10
15678.1. The following entities may be merged pursuant to this article: (a) Two or more limited partnerships into one limited partnership. (b) One or more limited partnerships and one or more other business entities into one of those other business entities. (c) One or more limited partnerships and one or more other business entities into one limited partnership. Notwithstanding this section, the merger of any number of limited partnerships with any number of other business entities may be effected only if the other business entities that are organized in California are authorized by the laws under which they are organized to effect the merger, and (1) if a limited partnership is the surviving limited partnership, the foreign other business entities are not prohibited by the laws under which they are organized from effecting that merger, and (2) if a foreign limited partnership or foreign other business entity is the survivor of the merger, the laws of the jurisdiction under which the survivor is organized authorize that merger. Notwithstanding the first sentence of this paragraph, if one or more domestic corporations is also a party to the merger described in that sentence, the merger may be effected only if, with respect to any foreign other business entity which is a corporation, the foreign corporation is authorized by the laws under which it is organized to effect that merger. 15678.2. (a) Each limited partnership and other business entity which desires to merge shall approve an agreement of merger. The agreement of merger shall be approved by all general partners of each constituent limited partnership and the principal terms of the merger shall be approved by a majority in interest of each class of limited partners of each constituent limited partnership, unless a greater approval is required by the partnership agreement of the constituent limited partnership. Notwithstanding the previous sentence, if the limited partners of any constituent limited partnership become personally liable for any obligations of a constituent limited partnership or constituent other business entity as a result of the merger, the principal terms of the agreement of merger shall be approved by all of the limited partners of the constituent limited partnership, unless the agreement of merger provides that all limited partners will have the dissenters' rights provided in Article 7.6 (commencing with Section 15679.1). The agreement of merger shall be approved on behalf of each constituent other business entity by those persons required to approve the merger by the laws under which it is organized. Other persons, including a parent of a constituent limited partnership, may be parties to the agreement of merger. The agreement of merger shall state: (1) The terms and conditions of the merger. (2) The name and place of organization of the surviving limited partnership or surviving other business entity, and of each disappearing limited partnership and disappearing other business entity, and the agreement of merger may change the name of the surviving limited partnership, which new name may be the same as or similar to the name of a disappearing domestic or foreign limited partnership, subject to Section 15612. (3) The manner of converting the partnership interests of each of the constituent limited partnerships into interests, shares, or other securities of the surviving limited partnership or surviving other business entity, and if partnership interests of any of the constituent limited partnerships are not to be converted solely into interests, shares, or other securities of the surviving limited partnership or surviving other business entity, the cash, property, rights, interests, or securities which the holders of the partnership interests are to receive in exchange for the partnership interests, which cash, property, rights, interests, or securities may be in addition to or in lieu of interests, shares, or other securities of the surviving limited partnership or surviving other business entity, or that the partnership interests are canceled without consideration. (4) Any other details or provisions as are required by the laws under which any constituent other business entity is organized, including, if a domestic corporation is a party to the merger, subdivision (b) of Section 1113. (5) Any other details or provisions that are desired, including, without limitation, a provision for the treatment of fractional partnership interests. (b) Each limited partnership interest of the same class of any constituent limited partnership (other than a limited partnership interest in another constituent limited partnership that is being canceled and that is held by a constituent limited partnership or its parent or a limited partnership of which the constituent limited partnership is a parent) shall, unless all limited partners of the class consent, be treated equally with respect to any distribution of cash, property, rights, interests, or securities. Notwithstanding this subdivision (b), except in a merger of a limited partnership with a limited partnership in which it controls at least 90 percent of the limited partnership interests entitled to vote with respect to the merger, the nonredeemable limited partnership interests of a constituent limited partnership may be converted only into nonredeemable interests or securities of the surviving limited partnership or other business entity or a parent if a constituent limited partnership or a constituent other business entity or its parent owns, directly or indirectly, prior to the merger, limited partnership interests of another constituent limited partnership or interests or securities of a constituent other business entity representing more than 50 percent of the interests or securities entitled to vote with respect to the merger of the other constituent limited partnership or constituent other business entity or more than 50 percent of the voting power, as defined in Section 194.5, of a constituent other business entity which is a domestic corporation, unless all of the limited partners of the class consent. This subdivision shall apply only to constituent limited partnerships with over 35 limited partners. (c) Notwithstanding its prior approval, an agreement of merger may be amended prior to the filing of the certificate of merger or the agreement of merger, as provided in Section 15678.4, if the amendment is approved by the general partners of each constituent limited partnership in the same manner as required for approval of the original agreement of merger and, if the amendment changes any of the principal terms of the agreement of merger, the amendment is approved by the limited partners of each constituent limited partnership in the same manner and to the same extent as required for the approval of the original agreement of merger, and by each of the constituent other business entities. (d) The general partners of a constituent limited partnership may, in their discretion, abandon a merger, subject to the contractual rights, if any, of third parties, including other constituent limited partnerships and constituent other business entities, without further approval by the limited partnership interests, at any time before the merger is effective. (e) An agreement of merger approved in accordance with subdivision (a) may (1) effect any amendment to the partnership agreement of any constituent limited partnership or (2) effect the adoption of a new partnership agreement for a constituent limited partnership if it is the surviving limited partnership in the merger. Any amendment to a partnership agreement or adoption of a new partnership agreement made pursuant to the foregoing sentence shall be effective at the effective time or date of the merger. Notwithstanding the above provisions of this subdivision, if a greater number of limited partners is required to approve an amendment to the partnership agreement of a constituent limited partnership than is required to approve the agreement of merger pursuant to subdivision (a), and the number of limited partners that approve the agreement of merger is less than the number of limited partners required to approve an amendment to the partnership agreement of the constituent limited partnership, any amendment to the partnership agreement or adoption of a new partnership agreement of that constituent limited partnership made pursuant to the first sentence of this subdivision shall be effective only if the agreement of merger provides that all of the limited partners shall have the dissenter's rights provided in Article 7.6 (commencing with Section 15679.1). (f) The surviving limited partnership or surviving other business entity shall keep the agreement of merger at the office referred to in subdivision (a) of Section 15614 or at the business address specified in paragraph (5) of subdivision (a) of Section 15678.4, as applicable, and, upon the request of a limited partner of a constituent limited partnership or a holder of shares, interests, or other securities of a constituent other business entity, the general partners of the surviving limited partnership or the authorized person of the surviving other business entity shall promptly deliver to the limited partner or the holder of shares, interests, or other securities, at the expense of the surviving limited partnership or surviving other business entity, a copy of the agreement of merger. A waiver by a partner or holder of shares, interests, or other securities of the rights provided in this subdivision shall be unenforceable. 15678.3. Subdivision (b) of Section 15678.2 shall not apply to any transaction if the commissioner has approved the terms and conditions of the transaction and the fairness of such terms and conditions pursuant to Section 25142. 15678.4. (a) If the surviving entity is a limited partnership or an other business entity (other than a corporation in a merger in which a domestic corporation is a constituent party), after approval of a merger by the constituent limited partnerships and any constituent other business entities, the constituent limited partnerships and constituent other business entities shall file a certificate of merger in the office of, and on a form prescribed by, the Secretary of State. The certificate of merger shall be executed and acknowledged by each domestic constituent limited partnership by all general partners (unless a lesser number is provided in the certificate of limited partnership of the domestic constituent limited partnership) and by each foreign constituent limited partnership by one or more general partners, and by each constituent other business entity by those persons required to execute the certificate of merger by the laws under which the constituent other business entity is organized. The certificate of merger shall set forth all of the following: (1) The names and the Secretary of State's file numbers, if any, of each of the constituent limited partnerships and constituent other business entities, separately identifying the disappearing limited partnerships and disappearing other business entities and the surviving limited partnership or surviving other business entity. (2) If a vote of the limited partners was required under Section 15678.2, a statement setting forth the total number of outstanding interests of each class entitled to vote on the merger and that the principal terms of the agreement of merger were approved by a vote of the number of interests of each class which equaled or exceeded the vote required, specifying each class entitled to vote and the percentage vote required of each class. (3) If the surviving entity is a limited partnership and not an other business entity, any change required to the information set forth in the certificate of limited partnership of the surviving limited partnership resulting from the merger, including any change in the name of the surviving limited partnership resulting from the merger. The filing of a certificate of merger setting forth any such changes to the certificate of limited partnership of the surviving limited partnership shall have the effect of the filing of a certificate of amendment by the surviving limited partnership, and the surviving limited partnership need not file a certificate of amendment under Section 15622 to reflect those changes. (4) The future effective date or time (which shall be a date or time certain not more than 90 days subsequent to the date of filing) of the merger, if the merger is not to be effective upon the filing of the certificate of merger with the office of the Secretary of State. (5) If the surviving entity is an other business entity or a foreign limited partnership, the full name, type of entity, legal jurisdiction in which the entity was organized and by whose laws its internal affairs are governed, and the address of the principal place of business of the entity. (6) Any other information required to be stated in the certificate of merger by the laws under which each constituent other business entity is organized, including, if a domestic corporation is a party to the merger, paragraph (2) of subdivision (g) of Section 1113. If the surviving entity is a foreign limited partnership in a merger in which a domestic corporation is a disappearing other business entity, a copy of the agreement of merger and attachments as required under paragraph (1) of subdivision (g) of Section 1113 shall be filed at the same time as the filing of the certificate of merger. (b) If the surviving entity is a domestic corporation or a foreign corporation in a merger in which a domestic corporation is a constituent party, after approval of the merger by the constituent limited partnerships and constituent other business entities, the surviving corporation shall file in the office of the Secretary of State a copy of the agreement of merger and attachments required under paragraph (1) of subdivision (g) of Section 1113. The certificate of merger shall be executed and acknowledged by each domestic constituent limited partnership by all general partners, unless a lesser number is provided in the certificate of limited partnership of the domestic constituent limited partnership. (c) A certificate of merger or the agreement of merger, as is applicable under subdivision (a) or (b), shall have the effect of the filing of a certificate of cancellation for each disappearing limited partnership, and no disappearing limited partnership need file a certificate of dissolution or a certificate of cancellation under Section 15623 as a result of the merger. (d) If a disappearing other business entity is a foreign corporation qualified to transact intrastate business in this state, a certificate of satisfaction of the Franchise Tax Board as required by Section 23334 of the Revenue and Taxation Code shall be filed with the certificate of merger or agreement of merger, as is applicable under subdivision (a) or (b). By the filing of the certificate of merger or agreement of merger, as is applicable, the foreign corporation shall automatically surrender its right to transact intrastate business. 15678.5. (a) Unless a future effective date or time is provided in a certificate of merger or the agreement of merger, if an agreement of merger is required to be filed under Section 15678.4, in which event the merger shall be effective at that future effective date or time, a merger shall be effective upon the filing of the certificate of merger or the agreement of merger, as is applicable, in the office of the Secretary of State. (b) (1) For all purposes, a copy of the certificate of merger duly certified by the Secretary of State is conclusive evidence of the merger of (A) the constituent limited partnerships (either by themselves or together with constituent other business entities) into the surviving other business entity, or (B) the constituent limited partnerships or the constituent other business entities, or both, into the surviving limited partnership. (2) In a merger in which the surviving entity is a corporation in a merger in which a domestic corporation and a domestic limited partnership are parties to the merger, a copy of an agreement of merger certified on or after the effective date by an official having custody thereof has the same force in evidence as the original and, except as against the state, is conclusive evidence of the performance of all conditions precedent to the merger, the existence on the effective date of the surviving corporation and the performance of the conditions necessary to the adoption of any amendment to the articles of incorporation of the surviving corporation, if applicable, contained in the agreement of merger. 15678.6. (a) Upon a merger of limited partnerships or limited partnerships and other business entities pursuant to this chapter, the separate existence of the disappearing limited partnerships and disappearing other business entities ceases and the surviving limited partnership or surviving other business entity shall succeed, without other transfer, act or deed, to all the rights and property, whether real, personal, or mixed, of each of the disappearing limited partnerships and disappearing other business entities and shall be subject to all the debts and liabilities of each in the same manner as if the surviving limited partnership or surviving other business entity had itself incurred them. (b) All rights of creditors and all liens upon the property of each of the constituent limited partnerships and constituent other business entities shall be preserved unimpaired and may be enforced against the surviving limited partnership or the surviving other business entity to the same extent as if the debt, liability or duty which gave rise to that lien had been incurred or contracted by it, provided that such liens upon the property of a disappearing limited partnership or disappearing other business entity shall be limited to the property affected thereby immediately prior to the time the merger is effective. (c) Any action or proceeding pending by or against any disappearing limited partnership or disappearing other business entity may be prosecuted to judgment, which shall bind the surviving limited partnership or surviving other business entity, or the surviving limited partnership or surviving other business entity may be proceeded against or be substituted in the disappearing limited partnership's or disappearing other business entity's place. (d) Nothing in this article is intended to affect the liability a general partner of a disappearing limited partnership may have in connection with the debts and liabilities of the disappearing limited partnership existing prior to the time the merger is effective. 15678.7. (a) The merger of any number of domestic limited partnerships with any number of foreign limited partnerships or foreign other business entities shall be required to comply with Section 15678.1. (b) If the surviving entity is a domestic limited partnership or a domestic other business entity, the merger proceedings with respect to that limited partnership or other business entity and any domestic disappearing limited partnership shall conform to the provisions of this chapter governing the merger of domestic limited partnerships, but if the surviving entity is a foreign limited partnership or a foreign other business entity, then, subject to the requirements of subdivision (d) and Article 7.6 (commencing with Section 15679.1) and, with respect to any domestic constituent corporation, Section 1113 and Chapters 12 (commencing with Section 1200) and 13 (commencing with Section 1300) of Division 1 of Title 1, the merger proceedings may be in accordance with the laws of the state or place of organization of the surviving limited partnership or surviving other business entity. (c) If the surviving entity is a domestic limited partnership or domestic other business entity, other than a domestic corporation, the certificate of merger shall be filed as provided in subdivision (a) of Section 15678.4, and thereupon, subject to subdivision (a) of Section 15678.5, the merger shall be effective as to each domestic constituent limited partnership and domestic constituent other business entity. If the surviving entity is a domestic corporation, the agreement of merger with attachments shall be filed as provided in subdivision (b) of Section 15678.4, and thereupon, subject to subdivision (a) of Section 15678.5, the merger shall be effective as to each domestic constituent limited partnership and domestic constituent other business entity unless another effective date is provided for in Chapter 11 (commencing with Section 1100) of Division 1 of Title 1, with respect to any constituent corporation or constituent limited partnership. (d) If the surviving entity is a foreign limited partnership or foreign other business entity, the merger shall become effective in accordance with the law of the jurisdiction in which the surviving limited partnership or surviving other business entity is organized, but shall be effective as to any domestic disappearing limited partnership as of the time of effectiveness in the foreign jurisdiction upon the filing in this state of a certificate of merger or agreement of merger as provided in Section 15678.4. (e) If a merger described in subdivision (c) or (d) also includes a foreign disappearing limited partnership previously registered for the transaction of intrastate business in this state pursuant to Section 15692, the filing of the certificate of merger or agreement of merger, as is applicable under Section 15678.4, automatically has the effect of a cancellation of registration for that foreign limited partnership pursuant to Section 15696 without the necessity of the filing of a certificate of cancellation. (f) The provisions of subdivision (b) of Section 15678.2 and Article 7.6 (commencing with Section 15679.1) apply to the rights of the limited partners of any of the constituent limited partnerships which are domestic limited partnerships and of any domestic limited partnership which is a parent of any foreign constituent limited partnership. 15678.8. Whenever a domestic or foreign limited partnership or other business entity having any real property in this state merges with another limited partnership or other business entity pursuant to the laws of this state or of the state or place in which any constituent limited partnership or constituent other business entity was organized, and the laws of the state or place of organization (including this state) of any disappearing limited partnership or disappearing other business entity provide substantially that the making and filing of the agreement of merger or certificate of merger vests in the surviving limited partnership or surviving other business entity all the real property of any disappearing limited partnership and disappearing other business entity, the filing for record in the office of the county recorder of any county in this state in which any of the real property of the disappearing limited partnership or disappearing other business entity is located of either (a) a certificate of merger certified by the Secretary of State, or other certificate prescribed by the Secretary of State, or (b) a copy of the agreement of merger or certificate of merger, certified by the Secretary of State or an authorized public official of the state or place pursuant to the laws of which the merger is effected, shall evidence record ownership in the surviving limited partnership or surviving other business entity of all interest of such disappearing limited partnership or disappearing other business entity in and to the real property located in that county. 15678.9. Recording of the certificate of merger in accordance with Section 15678.8 shall create, in favor of bona fide purchasers or encumbrancers for value, a conclusive presumption that the merger was validly completed. 15678.10. Upon merger pursuant to this article, a surviving domestic or foreign limited partnership or other business entity shall be deemed to have assumed the liability of each disappearing domestic or foreign limited partnership or other business entity that is taxed under Part 10 (commencing with Section 17001) of, or under Part 11 (commencing with Section 23001) of, Division 2 of the Revenue and Taxation Code for the following: (a) To prepare and file, or to cause to be prepared and filed, tax and information returns otherwise required of that disappearing entity as specified in Chapter 2 (commencing with Section 18501) of Part 10.2 of Division 2 of the Revenue and Taxation Code. (b) To pay any tax liability determined to be due.
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