2023 Laws of Puerto Rico › TITLE FOURTEEN - Private Corporations (§§ 1 — 4084) › Subtitle 5 - General Corporations Act (2009) › Chapter 230 - Merger or Consolidation (§§ 3731 — 3746) › § 3735 - Merger or consolidation of domestic corporations and joint-stock or other associations

(a) The term “joint-stock association”, as used in this section, includes any association of the kind commonly known as a joint-stock association and any trust or enterprise having members or having outstanding shares of stock or other evidences of financial or beneficial interest therein, whether established by agreement, by law or otherwise, without including a limited liability corporation, partnership or company. The term “stockholder”, as used in this section, includes every member of such joint-stock association or holder of a share of stock or other evidence of financial or beneficial interest therein.
(b) One (1) or more corporations of the Commonwealth may merge or consolidate with one (1) or more joint-stock associations, except for those organized under the laws of a state of the United States of America, the District of Columbia or any other foreign jurisdiction which forbids such merger or consolidation. Such corporation or corporations and such joint-stock association or associations may merge into a single corporation, or joint-stock association, which may be any one of such corporations or joint-stock associations, or they may consolidate into a new corporation or joint-stock association organized under the laws of the Commonwealth, pursuant to an agreement of merger or consolidation, as the case may be, executed and approved in accordance with this section. If the surviving or resulting entity is a corporation, it may be a stock corporation or a nonstock corporation, whether or not for profit.
(c) Each such corporation and joint-stock association shall enter into a written agreement of merger or consolidation. The agreement shall state:
(1) The terms and conditions of the merger or consolidation;
(2) the mode of carrying the same into effect;
(3) the manner, if any, of converting the shares of stock of each stock corporation, the interest of members of each nonstock corporation, and the shares, membership or financial or beneficial interests in each of the joint-stock associations into shares or other securities of a stock corporation or membership interests of a nonstock corporation or into shares, memberships or financial or beneficial interests of the joint-stock association surviving or resulting from such merger or consolidation, or of cancelling some or all of such shares, memberships or financial or beneficial interests, and, if any shares of any such stock corporation, any membership interests of any such nonstock corporation or any shares, memberships or financial or beneficial interests in any such joint-stock association are not to remain outstanding, to be converted solely into shares or other securities of the stock corporation or membership interests of the nonstock corporation or into shares, memberships or financial or beneficial interests of the joint-stock association surviving or resulting or to be cancelled, the cash, property, rights or securities of any other corporation or entity which the holders of shares of any such stock corporation, membership interests of any such nonstock corporation, or shares, memberships or financial or beneficial interests of any such joint-stock association are to receive in exchange for, or upon conversion of such shares, membership interests or shares, memberships or financial or beneficial interests, and the surrender of any certificates evidencing them, which cash, property, rights or securities of any other corporation or entity may be in addition to or in lieu of shares or other securities of the stock corporation or membership interests of the nonstock corporation or shares, memberships or financial or beneficial interests of the joint-stock association surviving or resulting from such merger or consolidation, and
(4) such other details or provisions as are deemed desirable, including, without limiting the generality of the foregoing, a provision for the payment of cash in lieu of the issuance of fractional shares where the surviving or resulting entity from a merger is a corporation. There shall also be set forth in the agreement such other matters or provisions as shall then be required to be set forth in certificates of incorporation or documents required to establish and maintain a joint-stock association by the laws of the Commonwealth and that can be stated in the case of such merger or consolidation. Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of such agreement, but may not be dependent upon the control of the constituent corporations or its affiliates, provided that the manner in which such facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation. The term “facts”, as used in the preceding sentence, includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(d) The agreement shall be adopted, approved, certified, executed and acknowledged by each of the stock or nonstock corporations in the same manner as is provided in § 3731 or 3736 of this title, respectively, and in the case of the joint-stock associations in accordance with their articles of association or other instrument containing the provisions by which they are organized or regulated or in accordance with the laws of the jurisdiction under which they are established, as the case may be. Where the surviving or resulting entity is a corporation, the agreement shall be filed and recorded, and shall become effective for all purposes of the laws of the Commonwealth when and as provided in § 3731 of this title with respect to the merger or consolidation of corporations of the Commonwealth. In lieu of filing the agreement of merger or consolidation, where the surviving or resulting entity is a corporation it may file with the Department of State a certificate of merger or consolidation, executed in accordance with § 3503 of this title, which states:
(1) The name and domicile of each of the constituent entities;
(2) that an agreement of merger or consolidation has been approved, adopted, certified, executed and acknowledged by each of the constituent entities in accordance with this subsection;
(3) the name of the surviving or resulting corporation;
(4) in the case of a merger, such amendments or changes in the certificate of incorporation of the surviving corporation, if any, as are desired to be effected by the merger, or, if no such amendments or changes are desired, a statement that the certificate of incorporation of the surviving corporation shall be its certificate of incorporation;
(5) in the case of a consolidation, that the certificate of incorporation of the resulting corporation shall be as is set forth in an attachment to the certificate;
(6) that the executed agreement of consolidation or merger is on file at the registered office of the surviving or resulting corporation and the address thereof, and
(7) that a copy of the agreement of consolidation or merger shall be furnished by the surviving or resulting corporation, on request and without cost, to any stockholder of any constituent entity.
(e) Subsections (d), (e) and (f) of § 3731, §§ 3740—3743, inclusive, and § 3787, all of this title shall, insofar as they are applicable, apply to mergers or consolidations between corporations and joint-stock associations; the word “corporation” where applicable, as used in those sections, being deemed to include joint-stock associations as defined in this section. Where the surviving or resulting entity is a corporation, the personal liability, if any, of any stockholder of a joint-stock association existing at the time of such merger or consolidation shall not be thereby extinguished. The personal liability shall remain personal to such stockholder and shall not become the liability of any subsequent transferee of any share of stock in such surviving or resulting corporation or of any other stockholder of such surviving or resulting corporation.
Nothing in this section shall be deemed to authorize the merger of a charitable nonstock corporation or charitable joint-stock association into a stock corporation or joint-stock association if the charitable status of such nonstock corporation or joint-stock association would be thereby lost or impaired; but a stock corporation or joint-stock association may be merged into a charitable nonstock corporation or charitable joint-stock association which shall continue as the surviving corporation or joint-stock association.
History —Dec. 16, 2009, No. 164, § 10.05.