2018 Tennessee Code
Title 48 - Corporations and Associations
Nonprofit Corporations
Chapter 61 - Mergers, Membership Exchanges, Entity Conversions, and For-Profit Conversions
§ 48-61-102. Permitted mergers -- Plan of Merger.
(a) Subject to the limitations on public benefit corporations in § 48-61-122, one (1) or more domestic nonprofit corporations may merge with one (1) or more domestic or foreign nonprofit corporations or eligible entities pursuant to a plan of merger, or two (2) or more foreign nonprofit corporations or domestic or foreign eligible entities may merge into a new domestic nonprofit corporation to be created in the merger in the manner provided in this chapter. The merger shall result in a single survivor.
(b) A foreign nonprofit corporation, or a foreign eligible entity, may be a party to a merger with a domestic nonprofit corporation, or may be created by the terms of the plan of merger, only if the merger is permitted by the organic law of the foreign nonprofit corporation or eligible entity. If the organic law of a domestic eligible entity does not prohibit a merger with a domestic nonprofit corporation but does not provide procedures for the approval of a merger, a plan of merger may be adopted and approved, and the merger effectuated, in accordance with the procedures in this chapter. For the purposes of applying this chapter:
(1) The eligible entity, its members or interest holders, eligible interests, and organic documents, taken together shall be deemed to be a domestic nonprofit corporation, members, memberships, charter and bylaws, respectively and vice versa, as the context may require; and
(2) If the business and affairs of the eligible entity are managed by a group of persons that is not identical to the members or interest holders, that group shall be deemed to be the board of directors.
(c) The plan of merger must be in the form of an organic document and set forth:
(1) The name of each domestic or foreign nonprofit corporation or eligible entity planning to merge and the name of each domestic or foreign nonprofit corporation or eligible entity that shall survive the merger;
(2) The terms and conditions of the merger;
(3) The manner and basis of converting the memberships of each merging domestic or foreign nonprofit corporation and eligible interests of each merging domestic or foreign eligible entity into memberships or other securities, eligible interests, obligations, rights to acquire memberships, other securities or eligible interests, cash, other property, or any combination of the foregoing;
(4) The charter of any domestic or foreign business corporation or nonprofit corporation, or the organic documents of any domestic or foreign unincorporated entity, to be created by the merger, or if a new domestic or foreign nonprofit corporation or unincorporated entity is not to be created by the merger, any amendments to the survivor's charter and bylaws or organic documents; and
(5) Any other provision required or permitted by the organic law under which any party to the merger is organized or by which it is governed, or by the charter or organic documents of any such party.
(d) The plan of merger may set forth any other provisions relating to the merger.
(e) Terms of a plan of merger may be made dependent on facts objectively ascertainable outside the plan in accordance with § 48-51-301(j).
(f) The plan of merger may also include a provision that the plan may be amended prior to filing articles of merger, but if the members of a domestic nonprofit corporation that is a party to the merger are required or permitted to vote on the plan, the plan must provide that subsequent to approval of the plan by such members the plan may not be amended to change the following:
(1) The amount or kind of memberships or other securities, eligible interests, obligations, rights to acquire memberships, other securities, or eligible interests, cash, or other property to be received under the plan by the members of or owners of eligible interests in any party to the merger;
(2) The charter of any corporation, or the organic documents of any unincorporated entity, that will survive or be created as a result of the merger, except for changes permitted by § 48-60-102 or by comparable provisions of the organic laws of any such foreign corporation or domestic or foreign unincorporated entity; or
(3) Any of the other terms or conditions of the plan if the change would adversely affect such members in any material respect.
(g) Property held in trust or for charitable purposes under the laws of this state by a domestic or foreign eligible entity shall not be diverted by a merger from the objects for which it was donated, granted, or devised, unless and until the eligible entity obtains a court order specifying the disposition of the property to the extent required by and pursuant to § 35-15-413 or enters into a nonjudicial settlement agreement pursuant to § 35-15-111.
