2023 Florida Statutes › Title XXXVI - Business Organizations › Chapter 607 - Florida Business Corporation Act › Part I - General Provisions (Ss. 607.0101-607.193) › 607.1106 - Effect of merger or share exchange.

607.1106 Effect of merger or share exchange.—
(1) When a merger becomes effective:
(a) The domestic or foreign eligible entity that is designated in the plan of merger as the survivor continues or comes into existence, as the case may be;
(b) The separate existence of every domestic or foreign eligible entity that is a party to the merger, other than the survivor, ceases;
(c) All real property and other property, including any interest therein and all title thereto, owned by, and every contract right possessed by, each domestic or foreign eligible entity that is a party to the merger, other than the survivor, become the property and contract rights of and become vested in the survivor, without transfer, reversion, or impairment;
(d) All debts, obligations, and other liabilities of each domestic or foreign eligible entity that is a party to the merger, other than the survivor, become debts, obligations, and liabilities of the survivor;
(e) The name of the survivor may be, but need not be, substituted in any pending proceeding for the name of any party to the merger whose separate existence ceased in the merger;
(f) Neither the rights of creditors nor any liens upon the property of any corporation party to the merger shall be impaired by such merger;
(g) If the survivor is a domestic eligible entity, the articles of incorporation and bylaws or the organic rules of the survivor are amended to the extent provided in the plan of merger;
(h) The articles of incorporation and bylaws or the organic rules of a survivor that is a domestic eligible entity and is created by the merger become effective;
(i) The shares, obligations, and other securities (and the rights to acquire shares, obligations, or other securities) of each domestic or foreign corporation party to the merger, and the eligible interests in any other eligible entity that is a party to the merger, that are to be converted in accordance with the terms of the merger into shares or other securities; eligible interests; obligations; rights to acquire shares, other securities, or eligible interests; cash; other property; or any combination of the foregoing, are converted, and the former holders of such shares, obligations, other securities, and eligible interests (and the rights to acquire shares, obligations, other securities, or other eligible interests) are entitled only to the rights provided to them by those terms of the merger or to any rights they may have under s. 607.1302 or under the organic law governing the eligible entity;
(j) Except as provided by law or the plan of merger, all the rights, privileges, franchises, and immunities of each eligible entity that is a party to the merger, other than the survivor, become the rights, privileges, franchises, and immunities of the survivor; and
(k) If the survivor exists before the merger:
1. All the property and contract rights of the survivor remain its property and contract rights without transfer, reversion, or impairment;
2. The survivor remains subject to all of its debts, obligations, and other liabilities; and
3. Except as provided by law or the plan of merger, the survivor continues to hold all of its rights, privileges, franchises, and immunities.
(2) When a share exchange becomes effective, the shares, eligible interests, and rights to acquire shares or eligible interests in the acquired eligible entity that are to be exchanged in accordance with the terms of the share exchange for:
(a) Shares or other securities;
(b) Eligible interests;
(c) Obligations;
(d) Rights to acquire shares, other securities, or eligible interests;
(e) Cash;
(f) Other property; or
(g) Any combination of the foregoing
are entitled only to the rights provided to them by the terms of the share exchange, or to any rights they may have under s. 607.1302 or the organic law governing the acquired eligible entity.
(3) Except as otherwise provided in the articles of incorporation of a domestic corporation or the organic law governing or organic rules of a domestic or foreign eligible entity, the effect of a merger or share exchange on interest holder liability is as follows:
(a) A person who becomes subject to new interest holder liability in respect of an eligible entity as a result of a merger or share exchange shall have that new interest holder liability only in respect of interest holder liabilities that arise after the merger or share exchange becomes effective.
(b) If a person had interest holder liability with respect to a party to the merger or the acquired eligible entity before the merger or share exchange becomes effective with respect to shares or eligible interests of such party or acquired entity which were exchanged in the merger or share exchange, which were canceled in the merger, or the terms and conditions of which relating to interest holder liability were amended pursuant to the merger:
1. The merger or share exchange does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the merger or share exchange becomes effective.
2. The provisions of the organic law governing any eligible entity for which the person had that prior interest holder liability shall continue to apply to the collection or discharge of any interest holder liabilities preserved by subparagraph 1. as if the merger or share exchange had not occurred.
3. The person shall have such rights of contribution from other persons as are provided by the organic law governing the eligible entity for which the person had that prior interest holder liability with respect to any interest holder liabilities preserved by subparagraph 1. as if the merger or share exchange had not occurred.
4. The person shall not, by reason of such prior interest holder liability, have interest holder liability with respect to any interest holder liabilities that arise after the merger or share exchange becomes effective.
(c) If a person has interest holder liability both before and after a merger becomes effective with unchanged terms and conditions with respect to the eligible entity that is the survivor by reason of owning the same shares or eligible interests before and after the merger becomes effective, the merger has no effect on such interest holder liability.
(d) A share exchange has no effect on interest holder liability related to shares or eligible interests of the acquired eligible entity that were not exchanged in the share exchange.
(4) Upon a merger becoming effective, a foreign eligible entity that is the survivor of the merger is deemed to:
(a) Appoint the secretary of state as its agent for service of process in a proceeding to enforce the rights of shareholders of each domestic corporation that is a party to the merger who exercise appraisal rights; and
(b) Agree that it will promptly pay any amount that the shareholders are entitled to under ss. 607.1301-607.1340.
(5) Except as provided in the organic law governing a party to a merger or in its articles of incorporation or organic rules, the merger does not give rise to any rights that an interest holder, governor, or third party would have upon a dissolution, liquidation, or winding up of that party. The merger does not require a party to the merger to wind up its affairs and does not constitute or cause its dissolution or termination.
(6) Property held for a charitable purpose under the law of this state by a domestic or foreign eligible entity immediately before a merger becomes effective may not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred except and only to the extent permitted by or pursuant to the laws of this state addressing cy pres or dealing with nondiversion of charitable assets.
(7) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance which is made to an eligible entity that is a party to a merger that is not the survivor and which takes effect or remains payable after the merger inures to the survivor.
(8) A trust obligation that would govern property if the property is directed to be transferred to a nonsurviving eligible entity will apply to property that is to be transferred instead to the survivor after a merger becomes effective.
History.—s. 114, ch. 89-154; s. 4, ch. 2004-378; s. 139, ch. 2019-90; s. 32, ch. 2020-32.