CHAPTER 16 - Wyoming Business Corporation Act - Merger, Share Exchange, Consolidation and Conversion

Wyoming Business Corporation Act

Wyoming Business Corporation Act Wyoming Business Corporation Act Wyoming Business Corporation Act

ARTICLE 11 - MERGER, SHARE EXCHANGE, CONSOLIDATION AND CONVERSION

17-16-1101. Reserved

17-16-1102. Merger

(a) One (1) or more domestic business corporations may merge with one (1) or more domestic or foreign business corporations or eligible entities pursuant to a plan of merger, or two (2) or more foreign business corporations or domestic or foreign eligible entities may merge into a new domestic business corporation to be created in the merger in the manner provided in this chapter.

(b) A foreign business corporation, or a foreign eligible entity, may be a party to a merger with a domestic business corporation, or may be created by the terms of the plan of merger, only if the merger is permitted by the foreign business corporation or eligible entity. If Wyoming law does not otherwise provide procedures for the approval of a merger, a plan of merger may be adopted and approved, the merger effectuated, and appraisal rights exercised in accordance with the procedures in this article and article 13 of this chapter. For the purposes of applying this article and article 13 of this chapter:

(i) The eligible entity, its members or interest holders, eligible interests and organic documents taken together shall be deemed to be a domestic business corporation, shareholders, shares and articles of incorporation, respectively and vice versa as the context may require; and

(ii) If the business and affairs of the eligible entity are managed by a group of persons that is not identical to the members or interest holders, that group shall be deemed to be the board of directors.

(c) The plan of merger shall include:

(i) The name of each domestic or foreign business corporation or eligible entity that will merge and the name of the domestic or foreign business corporation or eligible entity that will be the survivor of the merger;

(ii) The terms and conditions of the merger;

(iii) The manner and basis of the disposition, if any, of the shares of each domestic or foreign business corporation and eligible interests of each domestic or foreign eligible entity;

(iv) The articles of incorporation of any domestic or foreign business or nonprofit corporation, or the organic documents of any domestic or foreign unincorporated entity, to be created by the merger, or if a new domestic or foreign business or nonprofit corporation or unincorporated entity is not to be created by the merger, any amendments to the survivor's articles of incorporation or organic documents; and

(v) Any other provisions required by the laws under which any party to the merger is organized or by which it is governed, or by the articles of incorporation or organic document of any party to the merger.

(d) The terms of the plan of merger may be made dependent on facts objectively ascertainable outside the plan.

(e) The plan of merger may also include a provision that the plan may be amended prior to filing articles of merger, but if the shareholders of a domestic corporation that is a party to the merger are required or permitted to vote on the plan, the plan must provide that subsequent to approval of the plan by the shareholders the plan may not be amended to change:

(i) The disposition of shares or other securities, eligible interests, obligations, rights to acquire shares, other securities or eligible interests, cash, or other property, if any, to be received under the plan by the shareholders of or owners of eligible interests in any party to the merger;

(ii) The articles of incorporation of any corporation, or the organic documents of any unincorporated entity, that will survive or be created as a result of the merger, except for changes permitted by W.S. 17-16-1005 or by comparable provisions of the organic laws of any such foreign corporation or domestic or foreign unincorporated entity; or

(iii) Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.

(f) Property held in trust or for charitable purposes under the laws of this state by a domestic or foreign eligible entity shall not be diverted by a merger from the objects for which it was donated, granted or devised, unless and until the eligible entity obtains an order of the district court specifying the disposition of the property to the extent required by and pursuant to the laws of this state.

17-16-1103. Share exchange

(a) Through a share exchange:

(i) A domestic corporation may acquire all of the shares of one (1) or more classes or series of shares of another domestic or foreign corporation, or all of the interests of one (1) or more classes or series of interests of a domestic or foreign other entity, in exchange for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, pursuant to a plan of share exchange; or

(ii) All of the shares of one (1) or more classes or series of shares of a domestic corporation may be acquired by another domestic or foreign corporation or other entity, in exchange for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, pursuant to a plan of share exchange.

(b) A foreign corporation or eligible entity, may be a party to a share exchange only if the share exchange is permitted by the organic law under which the corporation or other entity is organized or by which it is governed. If Wyoming law does not otherwise provide procedures for the approval of a share exchange, a plan of share exchange may be adopted and approved, and the share exchange effectuated, in accordance with the procedures, if any, for a merger. If Wyoming law does not otherwise provide procedures for the approval of either a share exchange or a merger, a plan of share exchange may be adopted and approved, the share exchange effectuated, and appraisal rights exercised, in accordance with the procedures in this article and article 13 of this chapter. For the purposes of applying this article and article 13 of this chapter:

(i) The other entity, its interest holders, interests and organic documents taken together shall be deemed to be a domestic business corporation, shareholders, shares and articles of incorporation, respectively and vice versa as the context may require; and

(ii) If the business and affairs of the other entity are managed by a group of persons that is not identical to the interest holders, that group shall be deemed to be the board of directors.

(c) The plan of exchange shall include:

(i) The name of each corporation or other entity whose shares or interests will be acquired and the name of the corporation or other entity that will acquire those shares or interests;

(ii) The terms and conditions of the share exchange;

(iii) The manner and basis of exchanging the shares of a corporation or interests in any other entity whose shares or interests will be acquired under the share exchange into shares or other securities, interests, obligations, rights to acquire shares, other securities or interests, cash, other property or any combination of the foregoing; and

(iv) Any other provisions required by the laws under which any party to the share exchange is organized or by the articles of incorporation or organic document of any party to the share exchange.

(d) Terms of a plan of share exchange may be made dependent on facts objectively ascertainable outside the plan.

(e) The plan of share exchange may also include a provision that the plan may be amended prior to filing articles of share exchange, but if the shareholders of a domestic corporation that is a party to the share exchange are required or permitted to vote on the plan, the plan shall provide that subsequent to approval of the plan by the shareholders the plan may not be amended to change:

(i) The amount or kind of shares or other securities, interests, obligations, rights to acquire shares, other securities or interests, cash, or other property to be issued by the corporation or to be received under the plan by the shareholders of or owners of interests in any party to the share exchange; or

(ii) Any of the other terms or conditions of the plan if the change would adversely affect the shareholders of the domestic corporation in any material respect.

(f) This section does not limit the power of a domestic corporation to acquire shares of another corporation or interests in another entity in a transaction other than a share exchange.

17-16-1104. Action on plan of merger or share exchange

(a) In the case of a domestic corporation that is a party to a merger or share exchange, the plan of merger or share exchange shall be adopted by the board of directors. After adopting a plan of merger or share exchange, the board of directors except as provided in subsection (g) of this section and W.S. 17-16-1105, shall submit the plan to the shareholders for their approval.? The board of directors shall also transmit to the shareholders a recommendation that the shareholders approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors shall transmit to the shareholders the basis for that determination.

(b) Reserved.

(c) The board of directors may condition its submission of the proposed merger or share exchange to the shareholders on any basis.

(d) If the plan of merger or share exchange is required to be approved by the shareholders and if the approval is to be given at a meeting, the corporation shall notify each shareholder, whether or not entitled to vote, of the shareholders' meeting at which the plan is to be submitted for approval. The notice shall state that the purpose, or one (1) of the purposes, of the meeting is to consider the plan and contain or be accompanied by a copy or summary of the plan. If the corporation is to be merged into an existing corporation or other entity, the notice shall also include or be accompanied by a copy or summary of the articles of incorporation or organizational documents of that corporation or other entity. If the corporation is to be merged into a corporation or other entity that is to be created pursuant to the merger, the notice shall include or be accompanied by a copy or a summary of the articles of incorporation or organizational documents of the new corporation or other entity.

(e) Unless the articles of incorporation or the board of directors acting pursuant to subsection (c) of this section require a greater vote or a greater number of votes to be present, approval of the plan of merger or share exchange requires the approval of the shareholders at a meeting at which a quorum exists, and, if any class or series of shares is entitled to vote as a separate group on the plan of merger or share exchange, the approval of each such separate voting group at a meeting at which a quorum of the voting group is present.

(f) Separate voting by voting groups is required:

(i) On a plan of merger by each class or series of shares that:

(A) Are to be converted under the plan of merger into other securities, interests, obligations, rights to acquire shares, other securities or interests, cash, other property, or any combination of the foregoing; or

(B) Would be entitled to vote as a separate group on a provision in the plan that, if contained in a proposed amendment to articles of incorporation, would require action by separate voting groups under W.S. 17-16-1004;

(ii) On a plan of share exchange by each class or series of shares included in the exchange, with each class or series constituting a separate voting group; and

(iii) On a plan of merger or share exchange, if the voting group is entitled under the articles of incorporation to vote as a voting group to approve a plan of merger or share exchange.

(g) Unless the articles of incorporation otherwise provide, approval by the corporation's shareholders of a plan of merger or share exchange is not required if:

(i) The corporation will survive the merger or is the acquiring corporation in a share exchange;

(ii) Except for amendments permitted by W.S. 17-16-1005, its articles of incorporation will not be changed;

(iii) Each shareholder of the corporation whose shares were outstanding immediately before the effective date of the merger or share exchange will hold the same number of shares, with identical preferences, limitations, and relative rights, immediately after the effective date of change; and

(iv) The issuance in the merger or share exchange of shares or other securities convertible into or rights exercisable for shares does not require a vote under W.S. 17-16-621(f).

(h) If as a result of a merger or share exchange one (1) or more shareholders of a domestic corporation would become subject to owner liability for the debts, obligations or liabilities of any other person or entity, approval of the plan of merger or share exchange shall require the execution, by each shareholder of the domestic corporation, of a separate written consent to become subject to owner liability.

(j) After a merger or share exchange is authorized, and at any time before articles of merger or share exchange are filed, the planned merger or share exchange may be abandoned, subject to any contractual rights, without further shareholder action, in accordance with the procedure set forth in the plan of merger or share exchange or, if none is set forth, in the manner determined by the board of directors.

17-16-1105. Merger between parent and subsidiary or between subsidiaries

(a) A domestic parent corporation that owns shares of a domestic or foreign subsidiary corporation that carry at least eighty percent (80%) of the voting power of each class and series of the outstanding shares of a subsidiary that have voting power may merge the subsidiary into itself or into another such subsidiary, or merge itself into the subsidiary, without approval of the board of directors or shareholders of the subsidiary, unless the articles of incorporation of any of the corporations otherwise provide, and unless, in the case of a foreign subsidiary, approval by the subsidiary's board of directors or shareholders is required by the laws under which the subsidiary is organized.

(b) If under subsection (a) of this section approval of a merger by the subsidiary's shareholders is not required, the parent corporation shall, within ten (10) days after the effective date of the merger, notify each of the subsidiary's shareholders that the merger has become effective.

(c) Except as provided in subsections (a) and (b) of this section, a merger between a parent and a subsidiary shall be governed by the provisions of this article applicable to mergers generally.

17-16-1106. Articles of merger or share exchange

(a) After a plan of merger or share exchange has been adopted and approved as required by this act, articles of merger or share exchange shall be executed on behalf of the surviving or acquiring corporation by any officer or other duly authorized representative. The articles shall set forth:

(i) The names of the parties to the merger or share exchange;

(ii) If the articles of incorporation of the survivor of a merger are amended, or if a new corporation is created as a result of a merger, the amendments to the survivor's articles of incorporation or the articles of incorporation of the new corporation;

(iii) If the plan of merger or share exchange required approval by the shareholders of a domestic corporation that was a party to the merger or share exchange, a statement that the plan was duly approved by the shareholders and, if voting by any separate voting group was required, by each such separate voting group, in the manner required by this act and the articles of incorporation;

(iv) If the plan of merger or share exchange did not require approval by the shareholders of a domestic corporation that was a party to the merger or share exchange, a statement to that effect; and

(v) As to each foreign corporation or eligible entity that was a party to the merger or share exchange, a statement that the participation of the foreign corporation or eligible entity was duly authorized as required by the organic law of the corporation or eligible entity.

(b) Articles of merger or share exchange shall be delivered to the secretary of state for filing by the survivor of the merger or the acquiring corporation in a share exchange, and shall take effect upon the effective time provided in W.S. 17-16-123. Articles of merger or share exchange filed under this section may be combined with any filing required under any other provision of Wyoming law if the combined filing satisfies the requirements of both this section and any other provision of Wyoming law.

17-16-1107. Effect of merger or share exchange

(a) When a merger becomes effective:

(i) The corporation or eligible entity that is designated in the plan of merger as the survivor continues or comes into existence, as the case may be and the separate existence of every corporation or eligible entity that is merged into the survivor ceases;

(ii) Reserved;

(iii) All property owned by, and every contract right possessed by, each corporation or eligible entity that merges into the survivor is vested in the survivor without reversion or impairment;

(iv) All liabilities of each corporation or eligible entity that is merged into the survivor are vested in the survivor;

(v) The name of the survivor may, 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;

(vi) The articles of incorporation or organic documents of the survivor are amended to the extent provided in the plan of merger;

(vii) The shares of each corporation that is a party to the merger, and the interests in an eligible entity that is a party to a merger, that are to be converted under the plan of merger into shares, eligible interests, obligations, rights to acquire securities, other securities, or eligible interests, cash, other property, or any combination of the foregoing, are converted, and the former holders of the shares or eligible interests are entitled only to the rights provided in the plan of merger or to any rights they may have under article 13 of this chapter or the organic law of the eligible entity; and

(viii) The articles of incorporation or organic documents of a survivor that is created by the merger become effective.

(b) When a share exchange becomes effective, the shares of each domestic corporation that are to be exchanged for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, are entitled only to the rights provided to them in the plan of share exchange or to any rights they may have under article 13 of this chapter.

(c) A person who becomes subject to owner liability for some or all of the debts, obligations or liabilities of any entity as a result of a merger or share exchange shall have owner liability only to the extent provided in the organic law of the entity and only for those debts, obligations and liabilities that arise after the effective time of the articles of merger or share exchange.

(d) Upon a merger becoming effective, a foreign corporation, or a foreign eligible entity, that is the survivor of the merger is deemed to:

(i) 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

(ii) Agree that it will promptly pay the amount, if any, to which such shareholders are entitled under article 13.

(e) The effect of a merger or share exchange on the owner liability of a person who had owner liability for some or all of the debts, obligations or liabilities of a party to the merger or share exchange shall be as follows:

(i) The merger or share exchange does not discharge any owner liability under the organic law of the entity in which the person was a shareholder or interest holder to the extent any owner liability arose before the effective time of the articles of merger or share exchange;

(ii) The person shall not have owner liability under the organic law of the entity in which the person was a shareholder or interest holder prior to the merger or share exchange for any debt, obligation or liability that arises after the effective time of the articles of merger or share exchange;

(iii) The provisions of the organic law of any entity for which the person had owner liability before the merger or share exchange shall continue to apply to the collection or discharge of any owner liability preserved by paragraph (i) of this subsection, as if the merger or share exchange had not occurred;

(iv) The person shall have whatever rights of contribution from other persons are provided by the organic law of the entity for which the person had owner liability with respect to any owner liability preserved by paragraph (i) of this subsection, as if the merger or share exchange had not occurred.

17-16-1108. Abandonment of a merger or share exchange

(a) Unless otherwise provided in a plan of merger or share exchange or in the laws under which a foreign business corporation or a domestic or foreign eligible entity that is a party to a merger or a share exchange is organized or by which it is governed, after the plan has been adopted and approved as required by this chapter, and at any time before the merger or share exchange has become effective, it may be abandoned by a domestic business corporation that is a party thereto without action by its shareholders in accordance with any procedures set forth in the plan of merger or share exchange or, if no such procedures are set forth in the plan, in the manner determined by the board of directors, subject to any contractual rights of other parties to the merger or share exchange.

(b) If a merger or share exchange is abandoned under subsection (a) of this section after articles of merger or share exchange have been filed with the secretary of state but before the merger or share exchange has become effective, a statement that the merger or share exchange has been abandoned in accordance with this section, executed on behalf of a party to the merger or share exchange by an officer or other duly authorized representative, shall be delivered to the secretary of state for filing prior to the effective date of the merger or share exchange. Upon filing, the statement shall take effect and the merger or share exchange shall be deemed abandoned and shall not become effective.

17-16-1110. Consolidation

(a) Any two (2) or more domestic corporations may consolidate into a new corporation pursuant to a plan of consolidation approved in the manner provided in this act.

(b) The board of directors of each corporation shall, by a resolution adopted by each board, approve a plan of consolidation setting forth:

(i) The names of the corporations proposing to consolidate, and the name of the new corporation into which they proposed to consolidate, which is hereinafter designated as the new corporation;

(ii) The terms and conditions of the proposed consolidation;

(iii) The manner and basis of converting the shares of each corporation into shares or other securities or obligations of the new corporation or of any other corporation or, in whole or in part, into cash or other property;

(iv) With respect to the new corporation, all of the statements required to be set forth in articles of incorporation for corporations organized under this act; and

(v) Such other provisions with respect to the proposed consolidation as are deemed necessary or desirable.

17-16-1111. Approval by shareholders; abandonment of plan

(a) The board of directors of each corporation, upon approving the plan of consolidation, shall, by resolution, direct that the plan be submitted to a vote at a meeting of shareholders, which may be either an annual or a special meeting. Written or printed notice shall be given to each shareholder of record whether or not entitled to vote at the meeting, not less than twenty (20) days before the meeting, in the manner provided in this act for the giving of notice of meetings of shareholders, and shall state that the purpose or one (1) of the purposes of the meeting is to consider the proposed plan of consolidation, whether the meeting be an annual or a special meeting. A copy of a summary of the plan of consolidation shall be included in or enclosed with the notice.

(b) At the shareholder's meeting for each corporation, a vote of the shareholders shall be taken on the proposed plan. The plan shall be approved upon receiving the affirmative vote of the holders of at least a majority of the shares entitled to vote. However, if any class of shares of each corporation is entitled to vote as a class, the plan shall be approved upon receiving the affirmative vote of the holders of at least a majority of the shares of each class of shares entitled to vote as a class. Any class of shares of each corporation shall be entitled to vote as a class if the plan contains any provision which, if contained in a proposed amendment to articles of incorporation, would entitle the class of shares to vote as a class.

(c) After approval by a vote of the shareholders of each corporation, and at any time prior to the filing of the articles of consolidation, the consolidation may be abandoned pursuant to provisions of the articles of consolidation, if any, set forth in the plan.

17-16-1112. Articles of consolidation

(a) Upon approval, articles of consolidation shall be delivered to the secretary of state for filing. The articles of consolidation shall set forth:

(i) The plan of consolidation;

(ii) As to each corporation the shareholders of which were required to vote on the plan, the number of shares outstanding, and, if the shares of any class are entitled to vote as a class, the designation and number of outstanding shares of each class;

(iii) As to each corporation the shareholders of which were required to vote on the plan, the number of shares voted for and against the plan, respectively, and, if the shares of any class are entitled to vote as a class, the number of shares of each class voted for and against the plan respectively.

17-16-1113. Effect of consolidation

(a) A consolidation becomes effective upon filing by the secretary of state, or on a later date, not more than thirty (30) days subsequent to filing the plan with the secretary of state, as shall be provided in the plan.

(b) When a consolidation takes effect:

(i) The several corporations party to the plan of consolidation are a single corporation, which is the new corporation provided for in the plan of consolidation;

(ii) The separate existence of all corporations party to the plan of consolidation except the new corporation ceases;

(iii) The new corporation has all the rights, privileges, immunities and powers and is subject to all the duties and liabilities of a corporation organized under this act;

(iv) The new corporation has all the rights, privileges, immunities and franchises, public or private, of each corporation party to the plan of consolidation. The title to all real estate and other property owned by each corporation party to the plan of consolidation is vested in the new corporation without reversion or impairment;

(v) The new corporation has all the liabilities and obligations of each corporation party to the plan of consolidation. Any claim existing or proceeding pending by or against any corporation party to the plan of consolidation may be continued as if the consolidation did not occur or the new corporation may be substituted for the corporation whose existence ceased.? Neither the rights of creditors nor any liens upon the property of any corporation party to the plan of consolidation shall be impaired by the consolidation;

(vi) The statements set forth in the articles of consolidation and which are required or permitted to be set forth in the articles of incorporation of corporations organized under this act shall be deemed to be the original articles of incorporation of the new corporation;

(vii) The shares of each corporation party to the plan of consolidation that are to be converted into shares, obligations or other securities of the new corporation or into cash or other property are converted, and the former holders of the shares are entitled only to the rights provided in the plan of consolidation or to their rights under article 13 of this act.

17-16-1114. Consolidation of domestic and foreign corporations

(a) One (1) or more foreign corporations and one (1) or more domestic corporations may be consolidated in the following manner, if the consolidation is permitted by the laws of the state under which each foreign corporation is organized:

(i) Each domestic corporation shall comply with the provisions of this act with respect to the consolidation of domestic corporations and each foreign corporation shall comply with the applicable provisions of the laws of the state under which it is organized;

(ii) If the new corporation in a consolidation is to be governed by the laws of any state other than Wyoming, it shall comply with the provisions of this act with respect to foreign corporations if it is to transact business in Wyoming, and in every case it shall file with the secretary of state of Wyoming:

(A) An agreement that it may be served with process in Wyoming in any proceeding for the enforcement of any obligation of any domestic corporation which is a party to such consolidation and in any proceeding for the enforcement of the rights of a dissenting shareholder of any such domestic corporation against the new corporation;

(B) An irrevocable appointment of the secretary of state of Wyoming as its agent to accept service of process in any such proceeding; and

(C) An agreement that it will promptly pay to the dissenting shareholders of any such domestic corporation the amount, if any, to which they shall be entitled under the provisions of this act with respect to the rights of dissenting shareholders.

17-16-1115. Conversion of corporation to limited liability company

(a) A domestic corporation may be converted to a domestic limited liability company pursuant to chapter 26 of this title.

(b) A foreign corporation may be converted to a domestic limited liability company pursuant to chapter 26 of this title.

(c) Repealed By Laws 2009, Ch. 115, 3.

(d) After the conversion is approved by the shareholders, the limited liability company shall file articles of organization which satisfy the requirements of W.S. 17-29-201 and include:

(i) A statement that the corporation was converted to a limited liability company;

(ii) Its former name;

(iii) The state of formation and the date of organization; and

(iv) A statement of the number of votes cast by the shareholders for and against conversion and if the vote is less than unanimous, the number or percentage required to approve the conversion under the articles of incorporation or bylaws.

(e) The conversion takes effect when the articles of organization are filed or at any later date specified in the articles.

17-16-1116. Effect of conversion

(a) Upon conversion:

(i) All property owned by the corporation remains in the limited liability company;

(ii) All obligations of the converting corporation continue as obligations of the resulting limited liability company; and

(iii) An action or proceeding pending against the converting corporation may be continued as if the conversion had not occurred.

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