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

(a) Two (2) or more corporations organized under the laws of the Commonwealth may merge into a single corporation, which may be any of the constituent corporations, or may consolidate into a new corporation, as stated in the agreement of merger or consolidation, as the case may be, in compliance with this section and approved as provided herein. For purposes of this subtitle, “domestic corporation” shall be deemed to be a corporation organized under the laws of the Commonwealth.
(b) The board of directors of each corporation which desires to merge or consolidate shall adopt a resolution approving an agreement of merger or consolidation and declaring its advisability. The agreement shall state:
(1) The terms and conditions of the merger or consolidation;
(2) the mode of carrying the same into effect;
(3) in case of a merger, the amendments or changes in the certificate of incorporation of the surviving corporation 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;
(4) in case of a consolidation, that the certificate of incorporation of the resulting corporation shall be as provided in an attachment to the agreement;
(5) the manner, if any, of converting the shares of each of the constituent corporations into shares or other securities of the corporation surviving or resulting from the merger or consolidation, or of cancelling some or all of such shares, and, if any shares of any of the constituent corporations are not to remain outstanding, to be converted solely into shares or other securities of the surviving or resulting corporation or to be cancelled, the cash, property, rights or securities of any other corporation or entity which the holders of such shares are to receive in exchange for, or upon conversion of such shares 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 surviving or resulting corporation, and
(6) such other details or provisions as are deemed desirable, including, without limiting of the foregoing, a provision for the payment of cash in lieu of the issuance or recognition of fractional shares, interests or rights, or any other agreement with respect thereto, as required by § 3585 of this title.
The agreement so adopted shall be executed and acknowledged in accordance with § 3503 of this title. Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of such agreement; 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.
(c) The agreement required by subsection (b) of this section shall be submitted to the stockholders of each constituent corporation at an annual or special meeting for the purpose of acting on the agreement. Due notice of the time, place and purpose of the meeting shall be mailed to each holder of stock, whether voting or nonvoting, of the corporation at the stockholder’s address as it appears on the records of the corporation, at least twenty (20) days prior to the date of the meeting. The notice shall contain a copy of the agreement or a brief summary thereof, as the directors shall deem advisable. At the meeting, the agreement shall be considered and a vote taken for its adoption or rejection. If a majority of the outstanding stock of the corporation entitled to vote thereon shall be voted for the adoption of the agreement, that fact shall be certified on the agreement by the Secretary or assistant Secretary of the corporation. If the agreement shall be so adopted and certified by each constituent corporation, it shall then be filed and shall become effective, in accordance with § 3503 of this title. In lieu of filing the agreement of merger or consolidation, the surviving or resulting corporation may file in the Department of State a certificate of merger or consolidation, executed in accordance with § 3503 of this title, which states:
(1) The name and place of incorporation of each of the constituent corporations;
(2) that an agreement of merger or consolidation has been approved, adopted, executed, and acknowledged by each of the constituent corporations 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, if any, in the certificate of incorporation of the surviving corporation 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 set forth in an attachment to the certificate;
(6) that the executed agreement of consolidation or merger is on file at an office of the surviving or resulting corporation, stating the address thereof, and
(7) that a copy of the agreement of consolidation or merger will be furnished by the surviving corporation, on request and without cost, to any stockholder of any constituent corporation.
(d) Any agreement of merger or consolidation may contain a provision that at any time prior to the time that the agreement (or a certificate in lieu thereof) filed with the Department of State becomes effective in accordance with § 3503 of this title, the agreement may be terminated by the board of directors of any constituent corporation notwithstanding approval of the agreement by the stockholders of all or any of the constituent corporations. In the event the agreement of merger or consolidation is terminated after the filing of the agreement (or a certificate in lieu thereof) with the Department of State but before the agreement has become effective, a certificate of termination of merger or consolidation shall be filed in accordance with § 3503 of this title. Any agreement of merger or consolidation may contain a provision that the boards of directors of the constituent corporations may amend the agreement at any time prior to the time that the agreement (or a certificate in lieu thereof) filed with the Department of State becomes effective in accordance with § 3503 of this title, provided, that an amendment made subsequent to the adoption of the agreement by the stockholders of any constituent corporation shall not:
(1) Change the amount or kind of shares, securities, cash, property or rights to be received in exchange for or on conversion of all or any of the shares of any class or series thereof of such constituent corporation;
(2) change any term of the certificate of incorporation of the surviving or resulting corporation to be effected by the merger or consolidation, or
(3) change any of the terms and conditions of the agreement if such alteration or change would adversely affect the holders of any class or series thereof of such constituent corporation. In the event the agreement of merger or consolidation is amended after the filing thereof with the Department of State but before the agreement has become effective, a certificate of amendment of merger or consolidation shall be filed in accordance with § 3503 of this title.
(e) In the case of a merger, the certificate of incorporation of the surviving corporation shall automatically be amended to the extent, if any, that changes in the certificate of incorporation are set forth in the agreement of merger.
(f) Notwithstanding the requirements of subsection (c) of this section, unless required by its certificate of incorporation, no vote of stockholders of a constituent corporation surviving a merger shall be necessary to authorize a merger if:
(1) The agreement of merger does not amend in any respect the certificate of incorporation of such constituent corporation;
(2) each share of stock of such constituent corporation outstanding immediately prior to the effective date of the merger is to be an identical outstanding or treasury share of the surviving corporation after the effective date of the merger, and
(3) either no shares of common stock of the surviving corporation and no shares, securities or obligations convertible into such stock are to be issued or delivered under the plan of merger, or the authorized unissued shares or the treasury shares of common stock of the surviving corporation to be issued or delivered under the plan of merger plus those initially issuable upon conversion of any other shares, securities or obligations to be issued or delivered under such plan do not exceed twenty percent (20%) of the shares of common stock of such constituent corporation outstanding immediately prior to the effective date of the merger.
No vote of stockholders of a constituent corporation shall be necessary to authorize a merger or consolidation if no shares of the stock of such corporation shall have been issued prior to the adoption by the board of directors of the resolution approving the agreement of merger or consolidation. If an agreement of merger is adopted by the constituent corporation surviving the merger, by action of its board of directors and without any vote of its stockholders pursuant to this subsection, the secretary or assistant secretary of that corporation shall certify on the agreement that the agreement has been adopted pursuant to this subsection and:
(A) If it has been adopted pursuant to clause (1) of this subsection, that the conditions specified in that sentence have been satisfied, or
(B) if it has been adopted pursuant to clause (2) of this subsection, that shares of stock of such corporation were issued prior to the adoption by the board of directors of the resolution approving the agreement of merger or consolidation. The agreement so adopted and certified shall then be filed and shall become effective, in accordance with § 3503 of this title. Such filing shall constitute a representation by the person who executes the agreement that the facts stated in the certificate remain true immediately prior to such filing.
History —Dec. 16, 2009, No. 164, § 10.01.