§ 10A-5A-10.05 — Merger

Alabama § 10A-5A-10.05

• Jurisdiction: Alabama
• Title 10A: Alabama Business and Nonprofit Entities Code
• Ch. 5A: Alabama Limited Liability Company Law of 2014
• Art. 10: Conversions and Mergers

Text

(a) A limited liability company may merge with one or more other constituent organizations pursuant to this section, Sections 10A-5A-10.06 through 10A-5A-10.08, and a plan of merger, if:
(1) the governing statute of each of the other organizations authorizes the merger;
(2) the merger is not prohibited by the law of a jurisdiction that enacted any of those governing statutes; and
(3) each of the other organizations complies with its governing statute in effecting the merger.
(b) A plan of merger must be in writing and must include:
(1) the name, type of organization, and mailing address of the principal office of each constituent organization, the jurisdiction of the governing statute of each constituent organization, and the respective unique identifying number or other designation as assigned by the Secretary of State, if any, of each constituent organization;
(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the unique identifying number or other designation as assigned by the Secretary of State, if any, of the surviving organization, the jurisdiction of the governing statute of the surviving organization, and, if the surviving organization is to be created pursuant to the merger, a statement to that effect;
(3) the terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration as allowed by subsection (c);
(4) if the surviving organization is to be created pursuant to the merger, the surviving organization’s organizational documents; and
(5) if the surviving organization is not to be created pursuant to the merger, any amendments to be made by the merger to the surviving organization’s organizational documents.
(c) In connection with a merger, rights or securities of or interests in a constituent organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the surviving organization, 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 organization or may be cancelled.
(d) In addition to the requirements of subsection (b), a plan of merger may:
(1) provide that (i) a constituent organization or any other 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, a limited liability company 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-5A-10.02(d)(1)), the limited liability company 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;
(2) provide (i) for the appointment, at or after the time at which the plan of merger is adopted by the members of a constituent limited liability company in accordance with the requirements of Section 10A-5A-10.06, of one or more persons (which may include the surviving or resulting entity or any officer, manager, representative, or agent thereof) as representative of the members of a constituent limited liability company, including those whose transferable interest 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 members 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 members under the plan of merger, on the terms and subject to the conditions set forth in the plan of merger, (ii) that any appointment pursuant to clause (i) of this Section 10A-5A-10.02(d)(2) shall be irrevocable and binding on all members from and after the adoption of the plan of merger by the requisite vote of the members pursuant to Section 10A-5A-10.06, and (iii) that any provision adopted pursuant to this Section 10A-5A-10.02(d)(2) 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; and
(3) contain any other provision not prohibited by law.
(e) At the time of the approval of the plan of merger in accordance with Section 10A-5A-10.06, 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.

Legislative History

(Act 2014-144, p. 265, §1; Act 2019-94, §2; Act 2025-281, §5.)