AL Code § 10A-1-8.02 (2021)
2021 Code of Alabama|Title 10A - Alabama Business and Nonprofit Entities Code.|Chapter 1 - General Provisions.|Article 8 - Conversions and Mergers.|Section 10A-1-8.02 - Mergers of Entities.

Section 10A-1-8.02Mergers of entities. (a) A merger of two or more entities, whether the other entity or entities are the same or another form of entity, may be accomplished as provided in this section. (1) CORPORATIONS. a. In the case of a corporation, other than a nonprofit corporation, that is a party to a merger, a plan of merger must be approved in accordance with the procedures and by the stockholder vote required by Article 11 of Chapter 2A. If the governing documents of the corporation provide for approval of a merger by less than all of the corporation's stockholders, approval of the merger shall constitute corporate action subject to appraisal rights pursuant to Article 13 of Chapter 2A, as applicable. No merger of a corporation into a general or limited partnership may be effected without the consent in writing of each stockholder who will have personal liability with respect to the surviving entity, notwithstanding any provision in the governing documents of the corporation that is a party to the merger providing for less than unanimous stockholder approval for the conversion. b. In the case of a nonprofit corporation that is a party to the merger, a plan of merger must be approved by all the nonprofit corporation's members entitled to vote thereon, if it is a nonprofit corporation with members with voting rights, or as otherwise provided in the nonprofit corporation's governing documents; but in no case may the governing documents provide for approval by less than a majority of the members entitled to vote thereon. If the nonprofit corporation has no members, or no members entitled to vote thereon, the plan of merger must be approved by a unanimous vote of the board of directors of the nonprofit corporation, except as otherwise provided in the governing documents; but in no case may the governing documents provide for approval by less than a majority of the board of directors. (2) LIMITED PARTNERSHIPS. In the case of a limited partnership that is a party to the merger, a plan of merger must be approved in writing by all of the partners or as otherwise provided in the partnership agreement. No merger of a limited partnership with a general partnership in which the general partnership is the surviving entity may be effected without the consent in writing of each limited partner who will have personal liability with respect to the surviving entity, notwithstanding any provision in the limited partnership agreement of the merging limited partnership providing for approval of the merger by less than all partners. (3) LIMITED LIABILITY COMPANIES. In the case of a limited liability company that is a party to the merger, a plan of merger must be approved in writing by all of the limited liability company's members or as otherwise provided in the limited liability company's governing documents. No merger of a limited liability company with a general or limited partnership that is the surviving entity may be effected without the consent in writing of each member who will have personal liability with respect to the surviving entity, notwithstanding any provision in the governing documents of the merging limited liability company providing for less than unanimous member approval for a merger. (4) GENERAL PARTNERSHIPS, INCLUDING LIMITED LIABILITY PARTNERSHIPS. In the case of a general partnership that is a party to the merger, a plan of merger must be approved in writing by all of the partners or as otherwise provided in the partnership agreement. No merger of a limited liability partnership into a general or limited partnership may be effected without the consent in writing of each partner who will have personal liability with respect to the surviving entity, notwithstanding any provision in the partnership agreement of the limited liability partnership providing for less than unanimous partner approval for a merger. All general partnerships, other than a general partnership that is created pursuant to the merger, that are parties to a merger must have on file with the Secretary of State a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership prior to delivering the statement of merger to the Secretary of State for filing. (5) REAL ESTATE INVESTMENT TRUST. In the case of a real estate investment trust that is a party to the merger, a plan of merger must be approved in writing by all of the trust's shareholders or as otherwise provided in the trust's declaration of trust, but in no case may the vote required for shareholder approval be set at less than a majority of all the votes entitled to be cast. No merger of a real estate investment trust with a general or limited partnership that is to be the surviving entity may be effected without the consent in writing of each shareholder who will have personal liability with respect to the surviving entity, notwithstanding any provision in the declaration of trust of the converting real estate investment trust providing for less than unanimous shareholder approval for the merger. (6) OTHER ENTITY. In the case of an entity other than a corporation, limited partnership, limited liability company, general partnership, or real estate investment trust that is a party to the merger, a plan of merger must be approved in writing by all owners of the entity. No merger of any entity shall be effected without the consent in writing of any owner who has limited liability as an owner of an entity party to the merger, and who will have personal liability with respect to the surviving entity. (b) The plan of merger must be in writing, and: (1) must include the following: a. the name, type of entity, and mailing address of the principal office of each entity that is a party to the merger, the jurisdiction of the governing statute of each entity that is a party to the merger, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each entity that is a party to the merger; b. the name, type of entity, and mailing address of the principal office of the surviving entity and, if the surviving entity is to be created pursuant to the merger, the surviving entity's organizational documents; c. the terms and conditions of the merger, including the manner and basis for converting the interests in each entity that is a party to the merger into any combination of money, interests in the surviving entity, and other consideration as allowed by subsection (c); and d. if the surviving entity is not to be created pursuant to the merger, any amendments to be made by the merger to the surviving entity's organizational documents; and (2) may include other provisions relating to the merger not prohibited by law. (c) In connection with a merger, rights or securities of or interests in a merged entity may be exchanged for or converted into cash, property, or rights or securities of or interests in the surviving entity, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another entity or may be cancelled. (d) After a plan of merger is approved and before the merger takes effect, the plan may be amended or abandoned as provided in the plan, or if the plan does not provide for amendment or abandonment, in the same manner as required for the approval of the plan of merger originally. (e) After each entity has approved the plan of merger, the entities must deliver to the Secretary of State for filing a statement of merger signed on behalf of each entity as provided by its governing statute which must include: (1) the name, type of entity, and mailing address of the principal office of each entity that is a party to the merger, the jurisdiction of the governing statute of each entity that is a party to the merger, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each entity that is a party to the merger; (2) the name, type of entity, and mailing address of the principal office of the surviving entity, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving entity, the jurisdiction of the governing statute of the surviving entity, and, if the surviving entity is created pursuant to the merger, a statement to that effect; (3) for each entity other than a general partnership, the date of the filing of the certificate of formation, if any, and all prior amendments and the filing office or offices, if any, where such is filed; (4) for each general partnership, the date of the filing of the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, if any, and all prior amendments and the filing office or offices, if any, where such is filed; (5) the date the merger is effective under the governing statute of the surviving entity; (6) if the surviving entity is to be created pursuant to the merger, (i) if it will be a filing entity, its certificate of formation; or (ii) if it will be a non-filing entity, any document that creates the entity that is required to be in a public writing or in the case of a general partnership, its statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable; (7) if the surviving entity is a domestic entity that exists before the merger, any amendments provided for in the plan of merger for the organizational documents that created the domestic entity that are required to be in a public writing, or in the case of a general partnership, its statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable; (8) a statement as to each entity that the merger was approved as required by the entity's governing statute; (9) a statement that a copy of the plan of merger will be furnished by the surviving entity, on request and without cost, to any owner of any entity which is a party to the merger; (10) if the surviving entity is a foreign entity not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-1-8.04; and (11) any additional information required by the governing statute of any entity that is a party to the merger. (f) Prior to the statement of merger being delivered for filing to the Secretary of State in accordance subsection (e), all parties to the merger that are general partnerships, other than a general partnership that is created pursuant to the merger, must have on file with the Secretary of State a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership. (g) If all of the entities that are parties to the merger are domestic entities, the merger becomes effective on the effective date determined in accordance with Article 4. If one or more parties to the merger is a foreign entity, or a foreign entity created by the merger is the surviving entity, the merger shall become effective at the later of: (1) when all documents required to be filed in foreign jurisdictions to effect the merger have become effective, or (2) the effective date determined in accordance with Article 4. (h) When a merger becomes effective: (1) the surviving entity continues or, in the case of a surviving entity created pursuant to the merger, comes into existence; (2) each entity that merges into the surviving entity ceases to exist as a separate entity; (3) except as provided in the plan of merger, all property owned by, and every contract right possessed by, each merging entity that ceases to exist vests in the surviving entity without transfer, reversion, or impairment and the title to any property and contract rights vested by deed or otherwise in the surviving entity shall not revert, be in any way impaired, or be deemed to be a transfer by reason of the merger; (4) all debts, obligations, and other liabilities of each merging entity, other than the surviving entity, are debts, obligations, and liabilities of the surviving entity, and neither the rights of creditors, nor any liens upon the property of any entity that is a party to the merger, shall be impaired by the merger; (5) an action or proceeding, pending by or against any merging entity that ceases to exist continues as if the merger had not occurred and the name of the surviving entity may, but need not be substituted in any pending proceeding for the name of any merging entity whose separate existence ceased in the merger; (6) except as prohibited by law other than this chapter or as provided in the plan of merger, all the rights, privileges, franchises, immunities, powers, and purposes of each merging entity, other than the surviving entity, vest in the surviving entity; (7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect; (8) except as otherwise agreed, if a merged entity ceases to exist, the merger does not dissolve the merged entity; (9) if the surviving entity is created pursuant to the merger: (i) if it is a general partnership, the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership becomes effective; or (ii) if it is an entity other than a partnership, the organizational documents that create the entity become effective; (10) the interests in a merging entity that are to be converted in accordance with the terms of the merger into interests, obligations, rights to acquire interests, cash, other property, or any combination of the foregoing, are converted as provided in the plan of merger, and the former holders of interests are entitled only to the rights provided to them by those terms or to any appraisal or dissenters' rights they may have under the governing statute governing the merging entity; (11) if the surviving entity exists before the merger: (i) except as provided in the plan of merger, all the property and contract rights of the surviving entity remain its property and contract rights without transfer, reversion, or impairment; (ii) the surviving entity remains subject to all its debts, obligations, and other liabilities; and (iii) except as provided by law other than this chapter or the plan of merger, the surviving entity continues to hold all of its rights, privileges, franchises, immunities, powers, and purposes. (12) Service of process in an action or proceeding against a surviving foreign entity to enforce an obligation of a domestic entity that is a party to a merger may be made by registered mail addressed to the surviving entity at the address set forth in the statement of merger or by any method provided by the Alabama Rules of Civil Procedure. Any notice or demand required or permitted by law to be served on a domestic entity may be served on the surviving foreign entity by registered mail addressed to the surviving entity at the address set forth in the statement of merger or in any other manner similar to the procedure provided by the Alabama Rules of Civil Procedure for the service of process. (13)a. An owner of an entity with limited liability protection remains liable, if at all, for an obligation incurred prior to the merger by an entity that ceases to exist as a result of the merger only to the extent, if any, that the owner would have been liable under the laws applicable to owners of the form of entity that ceased to exist if the merger had not occurred. b. An owner with limited liability protection who, as a result of the merger, becomes an owner without limited liability protection of the surviving entity is liable for an obligation of the surviving entity incurred after merger to the extent provided for by the laws applicable to the surviving entity. (14) An owner without limited liability protection of an entity that ceases to exist as a result of a merger and who as a result of the merger becomes an owner of a surviving entity with limited liability protection remains liable for an obligation of the entity that ceases to exist incurred before the merger takes effect only to the extent, if any, that the owner would have been liable if the merger had not occurred. (i) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any merged entity owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate, however, shall be entitled to collect a filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the surviving entity's title to such real property. (Act 2000-211, p. 279, §3; §10-15-4; amended and renumbered by Act 2009-513, p. 967, §71; Act 2014-293, p. 1052, §1; Act 2018-125, §3; Act 2019-94, §2; Act 2020-73, §7.)