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H.B. 29 Enrolled

             1     

BUSINESS ENTITY MERGERS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: Jerry W. Stevenson

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Utah Revised Business Corporation Act to address mergers.
             10      Highlighted Provisions:
             11          This bill:
             12          .    clarifies that a corporation may merge with other business entities; and
             13          .    makes technical and conforming amendments.
             14      Money Appropriated in this Bill:
             15          None
             16      Other Special Clauses:
             17          None
             18      Utah Code Sections Affected:
             19      AMENDS:
             20          16-10a-1101, as last amended by Laws of Utah 2010, Chapter 378
             21          16-10a-1107, as last amended by Laws of Utah 2008, Chapter 364
             22     
             23      Be it enacted by the Legislature of the state of Utah:
             24          Section 1. Section 16-10a-1101 is amended to read:
             25           16-10a-1101. Merger.
             26          (1) [One or more domestic corporations] A domestic corporation may merge into
             27      another [domestic corporation] entity if:
             28          (a) the board of directors of [each] the domestic corporation adopts and its
             29      shareholders, if required by Section 16-10a-1103 , approve the plan of merger[.]; and


             30          (b) any other entity that plans to merge approves the plan of merger as provided by the
             31      statutes governing the entity.
             32          (2) The plan of merger referred to in Subsection (1) shall set forth:
             33          (a) the name of each [corporation] entity planning to merge and the name of the
             34      surviving [corporation] entity into which each other [corporation] entity plans to merge;
             35          (b) the terms and conditions of the merger;
             36          (c) the manner and basis of converting the [shares of each corporation into shares,]
             37      ownership interests in each entity, in whole or part, into:
             38          (i) ownership interests, obligations, or other securities of the surviving [or any other
             39      corporation or into] entity or another entity; or
             40          (ii) cash or other property [in whole or part]; and
             41          (d) any amendments to the articles of incorporation or organization of the surviving
             42      [corporation] entity to be effected by the merger.
             43          (3) The plan of merger may set forth other provisions relating to the merger.
             44          Section 2. Section 16-10a-1107 is amended to read:
             45           16-10a-1107. Merger or share exchange with foreign corporations.
             46          (1) [One or more domestic corporations may merge] A domestic corporation may
             47      merge with a foreign entity or enter into a share exchange with [one or more foreign
             48      corporations] a foreign corporation if:
             49          (a) in a merger, the merger is permitted by the law of the state or country under whose
             50      law [each] the foreign [corporation] entity is incorporated or organized and [each] the foreign
             51      [corporation] entity complies with that law in effecting the merger;
             52          (b) in a share exchange, the corporation whose shares will be acquired is a domestic
             53      corporation, whether or not a share exchange is permitted by the law of the state or country
             54      under whose law the acquiring corporation is incorporated;
             55          (c) the foreign corporation complies with Section 16-10a-1105 if it is the surviving
             56      corporation of the merger or the acquiring corporation of the share exchange, and provides, in
             57      addition to the information required by Section 16-10a-1105 , the address of its principal office;


             58      and
             59          (d) [each] the domestic corporation complies with:
             60          (i) the applicable provisions of Sections 16-10a-1101 through 16-10a-1104 ; and[,]
             61          (ii) if it is the surviving corporation of the merger [with], Section 16-10a-1105 .
             62          (2) Upon the merger or share exchange taking effect, the surviving foreign
             63      [corporation] entity of a merger and the acquiring foreign corporation of a share exchange shall
             64      either:
             65          (a) agree that service of process in a proceeding to enforce the rights of shareholders of
             66      each domestic corporation that is a party to the merger who exercise appraisal rights may be
             67      made in the manner provided in Section 16-17-301 ;
             68          (b) promptly pay to the dissenting shareholders of each domestic corporation party to
             69      the merger or share exchange the amount, if any, to which they are entitled under Part 13,
             70      Dissenters' Rights; and
             71          (c) comply with Part 15, Authority of Foreign Corporation to Transact Business, if it is
             72      to transact business in this state.
             73          (3) Service effected pursuant to Subsection (2) is perfected at the earliest of:
             74          (a) the date the foreign [corporation] entity receives the process, notice, or demand;
             75          (b) the date shown on the return receipt, if signed on behalf of the foreign [corporation]
             76      entity; or
             77          (c) five days after mailing.
             78          (4) Subsection (2) does not prescribe the only means, or necessarily the required
             79      means, of serving a surviving foreign [corporation] entity of a merger or an acquiring foreign
             80      corporation in a share exchange.
             81          (5) This section does not limit the power of a foreign corporation to acquire all or part
             82      of the shares of one or more classes or series of a domestic corporation through a voluntary
             83      exchange of shares or otherwise.


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