Merger and Share Exchange

KRS tit. XXIII, ch. 271B, subtit. 11

in effect

KRS 271B.11-010 Merger

271B.11-010. Merger (1) One (1) or more corporations may merge into another corporation if the board of directors of each corporation adopts and its shareholders (if required by KRS 271B.11-030) approve a plan of merger. (2) The plan of merger shall set forth: (a) The name of each corporation planning to merge and the name of the surviving corporation into which each other corporation plans to merge; (b) The terms and conditions of the merger; and (c) The manner and basis of converting the shares of each corporation into shares, obligations, or other securities of the surviving or any other corporation or into cash or other property in whole or part. (3) The plan of merger may set forth: (a) Amendments to the articles of incorporation of the surviving corporation; and (b) Other provisions relating to the merger. Effective: January 1, 1989 History: Created 1988 Ky. Acts ch. 23, sec. 114, effective January 1, 1989.

KRS 271B.11-020 Share exchange

271B.11-020. Share exchange (1) A corporation may acquire all of the outstanding shares of one (1) or more classes or series of another corporation if the board of directors of each corporation adopts and its shareholders (if required by KRS 271B.11-030) approve the exchange. (2) The plan of exchange shall set forth: (a) The name of the corporation whose shares will be acquired and the name of the acquiring corporation; (b) The terms and conditions of the exchange; and (c) The manner and basis of exchanging the shares to be acquired for shares, obligations, or other securities of the acquiring or any other corporation or for cash or other property in whole or part. (3) The plan of exchange may set forth other provisions relating to the exchange. (4) This section shall not limit the power of a corporation to acquire all or part of the shares of one (1) or more classes or series of another corporation through a voluntary exchange or otherwise. Effective: January 1, 1989 History: Created 1988 Ky. Acts ch. 23, sec. 115, effective January 1, 1989.

KRS 271B.11-025 Change of status from or to a public benefit corporation -- Conditions for

271B.11-025. Change of status from or to a public benefit corporation -- Conditions for (1) Notwithstanding any other provisions of this chapter, a corporation that is not a public benefit corporation shall not, without the approval of ninety percent (90%) of the outstanding shares of each class of the stock of the corporation of which there are outstanding shares, whether voting or nonvoting: (a) Amend its articles of incorporation to elect to be a public benefit corporation; or (b) Merge with or into another entity if, as a result of the merger, the shares in the corporation would become, or be converted into or exchanged for the right to receive, shares or other equity interests in a domestic or foreign public benefit corporation or similar entity. The restrictions of this section shall not apply prior to the time that the corporation has received payment for any of its capital stock. (2) Any stockholder of a corporation that is not a public benefit corporation who: (a) Holds shares of stock of the corporation immediately prior to the effective time of: 1. An amendment to the corporation's articles of incorporation to become a public benefit corporation; or 2. A merger that would result in the conversion of the corporation's stock into, or exchange of the corporation's stock for the right to receive, shares or other equity interests in a domestic or foreign public benefit corporation or similar entity; and (b) Has not voted in favor of the amendment, merger, or consolidation or consented thereto in writing; shall be entitled to exercise dissenters' rights under Subtitle 13 of this chapter. (3) Notwithstanding any other provisions of this chapter, a corporation that is a public benefit corporation shall not, without the approval of two-thirds (2/3) of the outstanding shares of each class of the stock of the corporation of which there are outstanding shares, whether voting or nonvoting: (a) Amend its articles of incorporation to delete the election to be a public benefit corporation; or (b) Merge with or into another entity if, as a result of the merger, the shares in the corporation would become, or be converted into or exchanged for the right to receive, shares or other equity interests in a domestic or foreign corporation that is not a public benefit corporation or similar entity and the articles of incorporation of which does not contain the identical public benefit or public benefits as the public benefit corporation identified in its articles of incorporation. Effective: June 29, 2017 History: Created 2017 Ky. Acts ch. 28, sec. 3, effective June 29, 2017.

KRS 271B.11-030 Action on plan

271B.11-030. Action on plan (1) After adopting a plan of merger or share exchange, the board of directors of each corporation party to the merger, and the board of directors of the corporation whose shares will be acquired in the share exchange, shall submit the plan of merger (except as provided in subsection (7) of this section) or share exchange for approval by its shareholders. (2) For a plan of merger or share exchange to be approved: (a) The board of directors shall recommend the plan of merger or share exchange to the shareholders, unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders with the plan; and (b) The shareholders entitled to vote shall approve the plan. (3) The board of directors may condition its submission of the proposed merger or share exchange on any basis. (4) The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with KRS 271B.7-050. The notice shall also state that the purpose, or one (1) of the purposes, of the meeting is to consider the plan of merger or share exchange and contain or be accompanied by a copy or summary of the plan. (5) Unless this chapter, the articles of incorporation, or the board of directors (acting pursuant to subsection (3) of this section) require a greater vote or vote by voting groups, the plan of merger or share exchange to be authorized shall be approved by each voting group entitled to vote separately on the plan by a majority of all the votes entitled to be cast on the plan by that voting group. (6) Separate voting by voting groups shall be required: (a) On a plan of merger if the plan contains a provision that, if contained in a proposed amendment to articles of incorporation, would require action by one (1) or more separate voting groups on the proposed amendment under KRS 271B.10-040; and (b) 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. (7) Action by the shareholders of the surviving corporation on a plan of merger shall not be required if: (a) The articles of incorporation of the surviving corporation will not differ (except for amendments enumerated in KRS 271B.10-020) from its articles before the merger; (b) Each shareholder of the surviving corporation whose shares were outstanding immediately before the effective date of the merger will hold the same number of shares, with identical designations, preferences, limitations, and relative rights, immediately after; (c) The number of voting shares outstanding immediately after the merger, plus the number of voting shares issuable as a result of the merger (either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger) will not exceed by more than twenty percent (20%) the total number of voting shares of the surviving corporation outstanding immediately before the merger; and (d) The number of participating shares outstanding immediately after the merger, plus the number of participating shares issuable as a result of the merger (either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger), will not exceed by more than twenty percent (20%) the total number of participating shares outstanding immediately before the merger. (8) As used in subsection (7) of this section: (a) "Participating shares" means shares that entitle their holders to participate without limitation in distributions. (b) "Voting shares" means shares that entitle their holders to vote unconditionally in elections of directors. (9) 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. Effective: January 1, 1989 History: Created 1988 Ky. Acts ch. 23, sec. 116, effective January 1, 1989.

KRS 271B.11-040 Merger of subsidiary

271B.11-040. Merger of subsidiary (1) A parent corporation owning at least ninety percent (90%) of the outstanding shares of each class of a subsidiary corporation may merge the subsidiary into itself without approval of the shareholders of the parent or subsidiary. (2) The board of directors of the parent shall adopt a plan of merger that sets forth: (a) The names of the parent and subsidiary; and (b) The manner and basis of converting the shares of the subsidiary into shares, obligations, or other securities of the parent or any other corporation or into cash or other property in whole or part. (3) The parent shall mail a copy or summary of the plan of merger to each shareholder of the subsidiary who does not waive the mailing requirement in writing. (4) The parent shall not deliver articles of merger to the Secretary of State for filing until at least thirty (30) days after the date it mailed a copy of the plan of merger to each shareholder of the subsidiary who did not waive the mailing requirement. (5) Articles of merger under this section shall not contain amendments to the articles of incorporation of the parent corporation (except for amendments enumerated in KRS 271B.10-020). Effective: January 1, 1989 History: Created 1988 Ky. Acts ch. 23, sec. 117, effective January 1, 1989.

KRS 271B.11-050 Articles of merger or share exchange

271B.11-050. Articles of merger or share exchange (1) After a plan of merger or share exchange is approved by the shareholders, or adopted by the board of directors if shareholder approval is not required, the surviving or acquiring corporation shall deliver to the Secretary of State for filing articles of merger or share exchange setting forth: (a) The names of the parties to the merger or share exchange; (b) The name of the surviving corporation, if a merger, or the name of the acquiring corporation, if a share exchange; (c) If a merger, the information required by KRS 271B.11-010(2)(c); (d) If a merger, any amendment to the articles of incorporation of the surviving corporation; (e) If a share exchange, the information required by KRS 271B.11-020(2)(c); (f) If shareholder approval was not required, a statement to that effect; and (g) If approval of the shareholders of one (1) or more corporations party to the merger or share exchange was required: 1. The designation, number of outstanding shares, and number of votes entitled to be cast by each voting group entitled to vote separately on the plan as to each corporation; and 2. Either the total number of votes cast for and against the plan by each voting group entitled to vote separately on the plan or the total number of undisputed votes cast for the plan separately by each voting group and a statement that the number cast for the plan by each voting group was sufficient for approval by that voting group. (2) A merger or share exchange shall take effect upon the effective date of the articles of merger or share exchange. Effective: June 24, 2015 History: Amended 2015 Ky. Acts ch. 34, sec. 9, effective June 24, 2015. -- Created 1988 Ky. Acts ch. 23, sec. 118, effective January 1, 1989. Legislative Research Commission Note (6/24/2015). During codification, the Reviser of Statutes has corrected a manifest clerical or typographical error in subsection (1)(e) of this statute from the way it appeared in 2015 Ky. Acts ch. 34, sec. 9 by changing a citation to "KRS 271B.11-020(c)" to read "KRS 271B.11-020(2)(c)." None of the text of the subsection was changed.

KRS 271B.11-060 Effect of merger or share exchange

271B.11-060. Effect of merger or share exchange (1) When a merger takes effect: (a) Every other corporation party to the merger shall merge into the surviving corporation and the separate existence of every corporation, except the surviving corporation, shall cease; (b) The title to all property, whether real, personal, or intangible, owned by each corporation party to the merger shall be vested in the surviving corporation without reversion or impairment; (c) The surviving corporation shall have all liabilities of each corporation party to the merger; (d) A proceeding pending against any corporation party to the merger may be continued as if the merger did not occur or the surviving corporation may be substituted in the proceeding for the corporation whose existence ceased; (e) The articles of incorporation of the surviving corporation shall be amended to the extent provided in the articles of merger; and (f) The shares of each corporation party to the merger that are to be converted into shares, obligations, or other securities of the surviving or any other corporation or into cash or other property shall be converted, and the former holders of the shares shall be entitled only to the rights provided in the articles of merger or to their rights under Subtitle 13. (2) When a share exchange takes effect, the shares of each acquired corporation shall be exchanged as provided in the articles of share exchange, and the former holders of the shares shall be entitled only to the exchange rights provided in the articles of share exchange or to their rights under Subtitle 13. Effective: June 24, 2015 History: Amended 2015 Ky. Acts ch. 34, sec. 10, effective June 24, 2015. -- Amended 2012 Ky. Acts ch. 81, sec. 91, effective July 12, 2012. -- Created 1988 Ky. Acts ch. 23, sec. 119, effective January 1, 1989.

KRS 271B.11-070 Merger or share exchange with foreign corporation

271B.11-070. Merger or share exchange with foreign corporation (1) One (1) or more foreign corporations may merge or enter into a share exchange with one (1) or more domestic corporations if: (a) In a merger, the merger is permitted by the law of the state or country under whose law each foreign corporation is incorporated and each foreign corporation complies with that law in effecting the merger; (b) In a share exchange, the corporation whose shares will be acquired is a domestic corporation, whether or not a share exchange is permitted by the law of the state or country under whose law the acquiring corporation is incorporated; (c) The foreign corporation complies with KRS 271B.11-050 if it is the surviving corporation of the merger or acquiring corporation of the share exchange; and (d) Each domestic corporation complies with the applicable provisions of KRS 271B.11-010 to 271B.11-040 and, if it is the surviving corporation of the merger or acquiring corporation of the share exchange, with KRS 271B.11- 050. (2) Upon the merger or share exchange taking effect, the surviving foreign corporation of a merger and the acquiring foreign corporation of a share exchange shall be deemed: (a) To appoint the Secretary of State as its agent for service of process in a proceeding to enforce any obligation or the rights of dissenting shareholders of each domestic corporation party to the merger or share exchange; (b) To agree that it will promptly pay to the dissenting shareholders of each domestic corporation party to the merger or share exchange the amount, if any, to which they are entitled under Subtitle 13; and (c) To have agreed, to the extent required by Section 200 of the Kentucky Constitution, that the courts of this Commonwealth shall retain jurisdiction over that part of the corporate property within the limits of this Commonwealth in all matters which may arise, as if the transaction had not taken place. (3) This section shall not limit the power of a foreign corporation to acquire all or part of the shares of one (1) or more classes or series of a domestic corporation through a voluntary exchange or otherwise. Effective: January 1, 1989 History: Created 1988 Ky. Acts ch. 23, sec. 120, effective January 1, 1989.

KRS 271B.11-080 Merger of domestic or foreign limited liability companies or limited partnerships with domestic corporations -- Shareholder's liability following merger

271B.11-080. Merger of domestic or foreign limited liability companies or limited partnerships with domestic corporations -- Shareholder's liability following merger (1) One (1) or more domestic or foreign limited liability companies or limited partnerships may merge with one (1) or more domestic corporations if: (a) The merger is permitted by the laws of the state or country under whose law each foreign limited liability company or limited partnership is incorporated, organized, or formed, and each foreign limited liability company or limited partnership complies with those laws in effecting the merger; (b) Each domestic limited liability company party to the merger complies with the applicable provisions of the Kentucky Revised Statutes; (c) Each domestic limited partnership party to the merger complies with the applicable provisions of KRS Chapter 362; (d) Each domestic corporation complies with the applicable provisions of KRS 271B.11-010 to 271B.11-040. (2) The plan of merger shall set forth: (a) The name of each constituent business entity that is a party to the merger and the name of the surviving business entity into which each constituent business entity proposes to merge; (b) The terms and conditions of the proposed merger, including but not limited to, a statement which sets forth whether limited liability is retained by the surviving business entity; (c) The manner and basis of converting the shares in each corporation and the interests in each business entity that is a party to the merger into interests, shares, or other securities or obligations, as the case may be, of the surviving entity, or of any other business entity, or, in whole or in part, into cash or other property; (d) The amendments to the articles of organization of a limited liability company, or articles of incorporation of a corporation or certificate of limited partnership, as the case may be, of the surviving business entity as are desired to be effected by the merger, or that no changes are desired; (e) Other provisions relating to the proposed merger that are deemed necessary or desirable. (3) The business entity surviving from the merger shall deliver to the Secretary of State for filing articles of merger duly executed by each constituent business entity setting forth: (a) The name and jurisdiction of formation or organization of each constituent business entity which is to merge; (b) The plan of merger; (c) The name of the surviving business entity; (d) A statement that the plan of merger was duly authorized and approved by each constituent business entity in accordance with the laws applicable to such business entity; and (e) If the surviving entity is not a business entity organized under the laws of this Commonwealth, a statement that the surviving business entity: 1. Agrees that it may be served with process in this Commonwealth in any proceeding for enforcement of any obligation of any constituent business entity party to the merger that was organized under the laws of this Commonwealth, as well as for enforcement of any obligation of the surviving business entity arising from the merger; and 2. Appoints the Secretary of State as its agent for service of process in any such proceeding. The surviving entity shall specify the address to which a copy of the process shall be mailed to it by the Secretary of State. (4) The articles of merger filed by the surviving entity in accordance with this section shall also be deemed to have been filed for any domestic limited liability company party to the merger in accordance with the applicable sections of the Kentucky Revised Statutes and for any domestic limited partnership party to the merger in accordance with KRS Chapter 362. (5) Upon merger taking effect, if the surviving entity in the merger is a foreign limited partnership, limited liability company, or corporation, the surviving entity shall be deemed: (a) To appoint the Secretary of State as its agent for service of process in a proceeding to enforce any obligation or the rights of dissenting shareholders of each domestic corporation party to the merger; (b) To agree that it will promptly pay to the dissenting shareholders of each domestic corporation party to the merger the amount, if any, to which they are entitled under Subtitle 13 of KRS Chapter 271B; and (c) To agree, to the extent required by Section 200 of the Constitution, that the courts of this Commonwealth shall retain jurisdiction over that part of the corporate property within the limits of this Commonwealth in all matters which may arise, as if the transaction has not taken place. (6) If a domestic or foreign limited liability company or limited partnership is the surviving entity of a merger, the surviving domestic or foreign limited liability company or limited partnership shall be considered a surviving corporation for purposes of KRS 271B.11-060(1). (7) A partner or, in the case of a limited partnership, a general partner who becomes a shareholder of a corporation as a result of a merger shall remain liable as a partner or general partner, as the case may be, for an obligation incurred by the partnership or limited partnership before the merger takes effect. The partner's or general partner's liability for all obligations of the corporation incurred before the merger takes effect shall be that of a shareholder as provided in this chapter. A limited partner who becomes a shareholder as a result of a merger shall remain liable only as a limited partner for an obligation incurred by the limited partnership before the merger takes effect. Effective: July 15, 1998 History: Amended 1998 Ky. Acts ch. 341, sec. 8, effective July 15, 1998. -- Created 1994 Ky. Acts ch. 389, sec. 111, effective July 15, 1994. Legislative Research Commission Note (3/24/95). Under KRS 7.136(1)(h), the word "or" has been added to subsection (1) of this statute before the phrase "more domestic corporations." The use of the plural in this phrase and the use of the adjective "each" in paragraph (d) of subsection (1) make it clear from context that the omission of the word "or" constitutes a manifest clerical or typographical error.

Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38545Fetched: 10/20/2026