§ 10A-1-8.02 — Mergers of Entities

Alabama § 10A-1-8.02

• Jurisdiction: Alabama
• Title 10A: Alabama Business and Nonprofit Entities Code
• Ch. 1: General Provisions
• Art. 8: Conversions and Mergers

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A merger of two or more entities, whether the other entity or entities are the same or another form of entity, may be accomplished as provided in this section.
(a) The plan of merger must be in writing, and:
(1) must include the following:
(A) the name, type of entity, and mailing address of the principal office of each entity that is a party to the merger, the jurisdiction of the governing statute of each entity that is a party to the merger, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each entity that is a party to the merger;
(B) the name, type of entity, and mailing address of the principal office of the surviving entity and, if the surviving entity is to be created pursuant to the merger, the surviving entity’s organizational documents;
(C) the terms and conditions of the merger, including the manner and basis for converting the interests in each entity that is a party to the merger into any combination of money, interests in the surviving entity, and other consideration as allowed by subsection (b); and
(D) if the surviving entity is not to be created pursuant to the merger, any amendments to be made by the merger to the surviving entity’s organizational documents;
(2) with respect to all entities other than nonprofit entities, a plan of merger may provide:
(A) that (i) any party to the plan of merger that fails to perform its obligations under the plan of merger in accordance with the terms and conditions of the plan of merger, or that otherwise fails to comply with the terms and conditions of the plan of merger, in each case, required to be performed or complied with prior to the time the merger becomes effective, or that otherwise fails to consummate, or fails to cause the consummation of, the merger (whether prior to a specified date, upon satisfaction or, to the extent permitted by law, waiver of all conditions to consummation set forth in the plan of merger, or otherwise) shall be subject, in addition to any other remedies available at law or in equity, to the penalties or consequences as are set forth in the plan of merger (which penalties or consequences may include an obligation to pay to the other party or parties to the plan of merger an amount representing, or based on the loss of, any premium or other economic entitlement the owners of the other party would be entitled to receive pursuant to the terms of the plan of merger if the merger were consummated in accordance with the terms of the plan of merger) and (ii) if, pursuant to the terms of the plan of merger, an entity is entitled to receive payment from another party to the plan of merger of any amount representing a penalty or consequence (as specified in clause (i) of this Section 10A-1-8.02(a)(2)(A)), the entity shall be entitled to enforce the other party’s payment obligation and, upon receipt of any payment, shall be entitled to retain the amount of the payment so received;
(B)(i) for the appointment, at or after the time at which the plan of merger is adopted by the owners of a domestic entity that is a party to the merger in accordance with the requirements of the statute governing that party, of one or more persons (which may include the surviving or resulting domestic entity or any officer, manager, representative or agent thereof) as representative of the owners of that domestic entity that is a party to the merger, including those whose ownership interests shall be cancelled, converted, or exchanged in the merger, and for the delegation to that person or persons of the sole and exclusive authority to take action on behalf of the owners pursuant to the plan of merger, including taking such actions as the representative determines to enforce (including by entering into settlements with respect to) the rights of the owners under the plan of merger, on the terms and subject to the conditions set forth in the plan of merger, and (ii) that any appointment pursuant to clause (i) of this Section 10A-1-8.02(a)(2)(B) shall be irrevocable and binding on all owners from and after the adoption of the plan of merger by the requisite vote of the owners pursuant to the statute governing that entity; and
(C) that any provision adopted pursuant to Section 10A-1-8.02(a)(2)(B) may not be amended after the merger has become effective or may be amended only with the consent or approval of persons specified in the plan of merger;
(3) a plan of merger may include other provisions relating to the merger not prohibited by law; and
(4) at the time of the approval of the plan of merger in accordance with subsection (c), the plan of merger is not required to contain or have attached thereto any disclosure letter, disclosure schedules, or similar documents or instruments contemplated by the plan of merger that modify, supplement, qualify, or make exceptions to representations, warranties, covenants, or conditions contained in the plan of merger.
(b) In connection with a merger, rights or securities of or interests in a merged entity may be exchanged for or converted into cash, property, or rights or securities of or interests in the surviving entity, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another entity, or may be cancelled.
(c) The plan of merger of an entity must be approved as follows:
(1) CORPORATIONS.
(A) If a corporation is governed by Chapter 2A and that corporation is a party to a merger, a plan of merger under subsection (a) must be approved in accordance with Chapter 2A. If the merger is a corporate action as described in Section 10A-2A-13.02, then the rights, obligations, and procedures under Article 13 of Chapter 2A shall be applicable to that merger.
(B) If a nonprofit corporation is governed by Chapter 3A and that corporation is a party to a merger, a plan of merger under subsection (a) must be approved in accordance with Chapter 3A.
(C) If a corporation is not governed by Chapter 2A or Chapter 3A and that corporation is a party to a merger, the plan of merger under subsection (a) must be approved in accordance with the law of the jurisdiction of formation of that corporation.
(2) LIMITED PARTNERSHIPS. In the case of a limited partnership that is a party to the merger, a plan of merger under subsection (a) must be approved in accordance with Chapter 9A.
(3) LIMITED LIABILITY COMPANIES. In the case of a limited liability company that is a party to the merger, a plan of merger under subsection (a) must be approved in accordance with Chapter 5A.
(4) GENERAL PARTNERSHIPS, INCLUDING LIMITED LIABILITY PARTNERSHIPS. In the case of a general partnership that is a party to the merger, a plan of merger under subsection (a) must be approved in accordance with Chapter 8A. All general partnerships, other than a general partnership that is created pursuant to the merger, that are parties to a merger must have on file with the Secretary of State a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership prior to delivering the statement of merger to the Secretary of State for filing.
(5) REAL ESTATE INVESTMENT TRUST. In the case of a real estate investment trust that is a party to the merger, a plan of merger under subsection (a) must be approved in writing by all of the trust’s shareholders or as otherwise provided in the trust’s declaration of trust, but in no case may the vote required for shareholder approval be set at less than a majority of all the votes entitled to be cast. No merger of a real estate investment trust with a general or limited partnership that is to be the surviving entity may be effected without the consent in writing of each shareholder who will have personal liability with respect to the surviving entity, notwithstanding any provision in the declaration of trust of the converting real estate investment trust providing for less than unanimous shareholder approval for the merger.
(6) OTHER ENTITY. In the case of an entity not specified in paragraphs (1) through (5) above, a plan of merger under subsection (a) must be approved in writing by all owners of that entity or, if the entity has no owners, then by all members of the governing authority of that entity.
(d) After each entity has approved the plan of merger pursuant to subsection (c), the entities must deliver to the Secretary of State for filing a statement of merger signed on behalf of each entity as provided by its governing statute which must include:
(1) the name, type of entity, and mailing address of the principal office of each entity that is a party to the merger, the jurisdiction of the governing statute of each entity that is a party to the merger, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each entity that is a party to the merger;
(2) the name, type of entity, and mailing address of the principal office of the surviving entity, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving entity, the jurisdiction of the governing statute of the surviving entity, and, if the surviving entity is created pursuant to the merger, a statement to that effect;
(3) for each general partnership, the date of the filing of the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, if any, and all prior amendments and the filing office or offices, if any, where such is filed;
(4) the date the merger is effective under the governing statute of the surviving entity;
(5) if the surviving entity is to be created pursuant to the merger, (i) if it will be a filing entity, its certificate of formation; or (ii) if it will be a non-filing entity, any document that creates the entity that is required to be in a public writing or in the case of a general partnership, its statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable;
(6) if the surviving entity is a domestic entity that exists before the merger, any amendments provided for in the plan of merger for the organizational documents that created the domestic entity that are required to be in a public writing, or in the case of a general partnership, its statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable;
(7) a statement as to each entity that the merger was approved as required by the entity’s governing statute;
(8) a statement that a copy of the plan of merger will be furnished by the surviving entity, on request and without cost, to any owner of any entity which is a party to the merger;
(9) if the surviving entity is a foreign entity not authorized to conduct activities and affairs in this state, the street and mailing address of an office for the purposes of Section 10A-1-8.04; and
(10) any additional information required by the governing statute of any entity that is a party to the merger.
(e) Prior to the statement of merger being delivered for filing to the Secretary of State in accordance with subsection (d), all parties to the merger that are general partnerships, other than a general partnership that is created pursuant to the merger, must have on file with the Secretary of State a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership.
(f) After a plan of merger is approved and before the merger takes effect, the plan may be amended or abandoned as provided in the plan, or if the plan does not provide for amendment or abandonment, in the same manner as required for the approval of the plan of merger originally.
(g) If all of the entities that are parties to the merger are domestic entities, the merger becomes effective on the effective date determined in accordance with Article 4. If one or more parties to the merger is a foreign entity, or a foreign entity created by the merger is the surviving entity, the merger shall become effective at the later of:
(1) when all documents required to be filed in foreign jurisdictions to effect the merger have become effective, or
(2) the effective date determined in accordance with Article 4.
(h) When a merger becomes effective:
(1) the surviving entity continues or, in the case of a surviving entity created pursuant to the merger, comes into existence;
(2) each entity that merges into the surviving entity ceases to exist as a separate entity;
(3) except as provided in the plan of merger, all property owned by, and every contract right possessed by, each merging entity that ceases to exist vests in the surviving entity without transfer, reversion, or impairment and the title to any property and contract rights vested by deed or otherwise in the surviving entity shall not revert, be in any way impaired, or be deemed to be a transfer by reason of the merger;
(4) all debts, obligations, and other liabilities of each merging entity, other than the surviving entity, are debts, obligations, and liabilities of the surviving entity, and neither the rights of creditors, nor any liens upon the property of any entity that is a party to the merger, shall be impaired by the merger;
(5) an action or proceeding, pending by or against any merging entity that ceases to exist continues as if the merger had not occurred and the name of the surviving entity may, but need not be substituted in any pending proceeding for the name of any merging entity whose separate existence ceased in the merger;
(6) except as prohibited by law other than this chapter or as provided in the plan of merger, all the rights, privileges, franchises, immunities, powers, and purposes of each merging entity, other than the surviving entity, vest in the surviving entity;
(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;
(8) except as otherwise agreed, if a merged entity ceases to exist, the merger does not dissolve the merged entity;
(9) if the surviving entity is created pursuant to the merger:
(A) if it is a general partnership, the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership becomes effective; or
(B) if it is an entity other than a partnership, the organizational documents that create the entity become effective;
(10) the interests in a merging entity that are to be converted in accordance with the terms of the merger into interests, obligations, rights to acquire interests, cash, other property, or any combination of the foregoing, are converted as provided in the plan of merger, and the former holders of interests are entitled only to the rights provided to them by those terms or to any appraisal or dissenters’ rights they may have under the governing statute governing the merging entity;
(11) if the surviving entity exists before the merger:
(A) except as provided in the plan of merger, all the property and contract rights of the surviving entity remain its property and contract rights without transfer, reversion, or impairment;
(B) the surviving entity remains subject to all its debts, obligations, and other liabilities; and
(C) except as provided by law other than this chapter or the plan of merger, the surviving entity continues to hold all of its rights, privileges, franchises, immunities, powers, and purposes.
(12) Service of process in an action or proceeding against a surviving foreign entity to enforce an obligation of a domestic entity that is a party to a merger may be made by registered mail addressed to the surviving entity at the address set forth in the statement of merger or by any method provided by the Alabama Rules of Civil Procedure. Any notice or demand required or permitted by law to be served on a domestic entity may be served on the surviving foreign entity by registered mail addressed to the surviving entity at the address set forth in the statement of merger or in any other manner similar to the procedure provided by the Alabama Rules of Civil Procedure for the service of process.
(13)(A) An owner of an entity with limited liability protection remains liable, if at all, for an obligation incurred prior to the merger by an entity that ceases to exist as a result of the merger only to the extent, if any, that the owner would have been liable under the laws applicable to owners of the form of entity that ceased to exist if the merger had not occurred.
(B) An owner with limited liability protection who, as a result of the merger, becomes an owner without limited liability protection of the surviving entity is liable for an obligation of the surviving entity incurred after merger to the extent provided for by the laws applicable to the surviving entity.
(14) An owner without limited liability protection of an entity that ceases to exist as a result of a merger and who as a result of the merger becomes an owner of a surviving entity with limited liability protection remains liable for an obligation of the entity that ceases to exist incurred before the merger takes effect only to the extent, if any, that the owner would have been liable if the merger had not occurred.
(i) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any merged entity owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate, however, shall be entitled to collect a filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the surviving entity’s title to such real property.
(j) Except as set forth in Section 10A-1-8.02(a)(4), for purposes of this Section 10A-1-8.02, a plan of merger, whether referred to as a plan of merger, an agreement of merger, a merger agreement, a plan and agreement of merger, an agreement and plan of merger, or otherwise, means a writing that includes the items required or allowed to be set forth therein and includes any agreement, instrument, or other document referenced therein or associated therewith that sets forth the terms and conditions of the merger.

Legislative History

(Act 2000-211, p. 279, §3; §10-15-4; amended and renumbered by Act 2009-513, p. 967, §71; Act 2014-293, p. 1052, §1; Act 2018-125, §3; Act 2019-94, §2; Act 2020-73, §7; Act 2023-503, §2; Act 2025-281, §1.)