2023 Laws of Puerto Rico › TITLE FOURTEEN - Private Corporations (§§ 1 — 4084) › Subtitle 5 - General Corporations Act (2009) › Chapter 230 - Merger or Consolidation (§§ 3731 — 3746) › § 3738 - Domestic stock and nonstock corporations

(a) One (1) or more nonstock corporations of the Commonwealth, whether or not organized for profit, may merge or consolidate with one (1) or more stock corporations organized under the Commonwealth, whether or not organized for profit. The constituent corporations may merge into a single corporation, which may be any one of the constituent corporations, or they may consolidate into a new corporation established by the consolidation, pursuant to an agreement of merger or consolidation, as the case may be, executed and approved in accordance with this section.
The surviving constituent corporation or the new corporation may be organized for profit or not organized for profit and may be a stock corporation or a nonstock corporation.
(b) The board of directors of each stock corporation which desires to merge or consolidate and the governing body of each nonstock corporation which desires to merge or consolidate shall adopt a resolution approving an 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) such other provisions or facts required or permitted by this subtitle to be stated in a certificate of incorporation as can be stated in the case of a merger or consolidation, stated in such altered form as the circumstances of the case require;
(4) the manner, if any, of converting the shares of stock of a stock corporation and the membership interests of a nonstock corporation into shares or other securities of a stock corporation or membership interests of a nonstock corporation surviving or resulting from such merger or consolidation or of cancelling some or all of such shares or membership interests, and, if any shares of any such stock corporation or membership interests of any such nonstock corporation 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 surviving or resulting from such merger or consolidation 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 or membership interests of any such nonstock corporation are to receive in exchange for, or upon conversion of such shares or membership interests, and the surrender of any certificates evidencing them. Such 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 any stock corporation or membership interests of any nonstock corporation surviving or resulting from such merger or consolidation, and
(5) such other details or provisions as are deemed desirable.
In such merger or consolidation the membership interests of a constituent nonstock corporation may be treated in various ways so as to convert such membership interests into interests of value, other than shares of stock, in the surviving or resulting stock corporation or into shares of stock in the surviving or resulting stock corporation, voting or nonvoting, or into creditor interests or any other interests of value equivalent to their membership interests in their nonstock corporation. The voting rights of members of a constituent nonstock corporation need not be considered an element of value in measuring the reasonable equivalence of the value of the interests received in the surviving stock corporation by members of a constituent nonstock corporation; nor need the voting rights of shares of stock in a constituent stock corporation be considered as an element of value in measuring the equivalence of the value of the interests in the surviving or resulting nonstock corporations received by stockholders of a constituent stock corporation. The voting or nonvoting shares of a stock corporation may be converted into a membership interest (voting or nonvoting) whether life, general, special or other kinds of membership interest however designated, into creditor interests or participating interests, in the nonstock corporation surviving or resulting from such merger or consolidation of a stock corporation and a nonstock corporation. 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) In the case of constituent stock corporations, the agreement required by subsection (b) of this section shall be adopted, approved, certified, executed, and acknowledged by each constituent corporation as provided in § 3731 of this title. In the case of constituent nonstock corporations, shall be adopted, approved, certified, executed and acknowledged by each of said constituent corporations as provided in § 3736 of this title. 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 § 3736 of this title with respect to the merger of stock corporations of the Commonwealth. Insofar as they may be applicable, the provisions set forth in the last sentence of § 3731(c) of this title shall apply to a merger under this section, and the reference therein to “stockholder” shall be deemed to include “member” hereunder.
(d) Section 3731(e) of this title shall apply to a merger under this section, if the surviving corporation is a corporation organized under the laws of the Commonwealth. Subsection (d) and the second sentence of subsection (c) of § 3731 of this title shall apply to any constituent stock corporation party to a merger or consolidation under this section. Section 3731(e) of this title shall apply to any constituent stock corporation party to a merger under this section.
(e) Nothing in this section shall be deemed to authorize the merger of a charitable nonstock corporation into a stock corporation, if the charitable status of such nonstock corporation would thereby be lost or impaired; but a stock corporation may be merged into a charitable nonstock corporation which shall continue as the surviving corporation.
History —Dec. 16, 2009, No. 164, § 10.08.