17550-17556
CORPORATIONS CODE
SECTION 17550-17556
17550. (a) The following entities may be merged pursuant to this chapter: (1) Two or more limited liability companies into one limited liability company. (2) One or more limited liability companies and one or more other business entities into one of those other business entities. (3) One or more limited liability companies and one or more other business entities into one limited liability company. (b) Notwithstanding this section, the merger of any number of limited liability companies with any number of other business entities may be effected only if the other business entities that are organized in California are authorized by the laws under which they are organized to effect the merger, and: (1) If a limited liability company is the surviving limited liability company, the foreign other business entities are not prohibited by the laws under which they are organized from effecting that merger. (2) If a foreign limited liability company or foreign other business entity is the survivor of the merger, the laws of the jurisdiction under which the survivor is organized authorize that merger. Notwithstanding the foregoing sentence, if one or more domestic corporations is also a party to the merger, the merger may be effected only if, with respect to any foreign other business entity that is a corporation, the foreign corporation is authorized by the laws under which it is organized to effect that merger. 17551. (a) Each limited liability company and other business entity that desires to merge shall approve an agreement of merger. The agreement of merger shall be approved by the vote of a majority in interest of the members of each constituent limited liability company, or such greater percentage of the voting interests of members as may be specified in the articles of organization or written operating agreement of that constituent limited liability company. Notwithstanding the previous sentence, if the members of any constituent limited liability company become personally liable for any obligations of a constituent limited liability company or constituent other business entity as a result of the merger, the principal terms of the agreement of merger shall be approved by all of the members of the constituent limited liability company, unless the agreement of merger provides that all members will have the dissenters' rights provided in Chapter 13 (commencing with Section 17600). The agreement of merger shall be approved on behalf of each constituent other business entity by those persons required to approve the merger by the laws under which it is organized. Other persons, including a parent of a constituent limited liability company, may be parties to the agreement of merger. The agreement of merger shall state: (1) The terms and conditions of the merger. (2) The name and place of organization of the surviving limited liability company or surviving other business entity, and of each disappearing limited liability company and disappearing other business entity. The agreement of merger may change the name of the surviving limited liability company, which new name may be the same as or similar to the name of a disappearing domestic or foreign limited liability company, subject to Section 17052. (3) The manner of converting the interests of each of the constituent limited liability companies into interests, shares, or other securities of the surviving limited liability company or surviving other business entity. If interests of any of the constituent limited liability companies are not to be converted solely into interests, shares, or other securities of the surviving limited liability company or surviving other business entity, the agreement of merger shall state the cash, property, rights, interests, or securities that the holders of the interests are to receive in exchange for the interests, that cash, property, rights, interests, or securities may be in addition to or in lieu of interests, shares, or other securities of the surviving limited liability company or surviving other business entity, or that the interests are canceled without consideration. (4) The amendments to the articles of organization of the surviving limited liability company, if applicable, to be effected by the merger, if any. (5) Any other details or provisions as are required by the laws under which any constituent other business entity is organized, including, if a domestic corporation is a party to the merger, subdivision (b) of Section 1113. (6) Any other details or provisions that are desired, including, without limitation, a provision for the treatment of fractional interests. (b) Each interest of the same class of any constituent limited liability company, other than an interest in another constituent limited liability company, that is being canceled and that is held by a constituent limited liability company or its parent or a limited liability company of which the constituent limited liability company is a parent, unless all members of the class consent, shall be treated equally with respect to any distribution of cash, property, rights, interests, or securities. Notwithstanding this subdivision, except in a merger of a limited liability company with a limited liability company in which it controls at least 90 percent of the membership interests entitled to vote with respect to the merger, the nonredeemable interests of a constituent limited liability company may be converted only into nonredeemable interests or securities of the surviving limited liability company or other business entity or a parent if a constituent limited liability company or a constituent other business entity or its parent owns, directly or indirectly, prior to the merger, interests of another constituent limited liability company or interests or securities of a constituent other business entity representing more than 50 percent of the interests or securities entitled to vote with respect to the merger of the other constituent limited liability company or constituent other business entity, or more than 50 percent of the voting power, as defined in Section 194.5, of a constituent other business entity that is a domestic corporation unless all of the members of the class consent. The provisions of this subdivision do not apply to any transaction if the commissioner has approved the terms and conditions of the transaction and the fairness of those terms and conditions pursuant to Section 25142. (c) Notwithstanding its prior approval, an agreement of merger may be amended prior to the filing of the certificate of merger or the agreement of merger as provided in Section 17552 if the amendment is approved by the members of each constituent limited liability company in the same manner as required for approval of the original agreement of merger and, if the amendment changes any of the principal terms of the agreement of merger, the amendment is approved by each of the constituent other business entities in the same manner as required for approval of the original agreement of merger. (d) A merger may be abandoned by the members of a constituent limited liability company in the same manner as required for approval of the agreement of merger, subject to the contractual rights, if any, of third parties, including other constituent limited liability companies and constituent other business entities, at any time before the merger is effective. (e) An agreement of merger approved in accordance with subdivision (a) may effect any amendment to the operating agreement of any constituent limited liability company or effect the adoption of a new operating agreement for a constituent limited liability company if it is the surviving limited liability company in the merger. Any amendment to an operating agreement or adoption of a new operating agreement made pursuant to the foregoing sentence shall be effective at the effective time or date of the merger. Notwithstanding the above provisions of this subdivision, if a greater number of members is required to approve an amendment to the operating agreement of the constituent limited liability company than is required to approve the agreement of merger pursuant to subdivision (a), and the number of members that approve the agreement of merger is less than the number of members required to approve an amendment to the operating agreement of the constituent limited liability company, any amendment to the operating agreement or adoption of a new operating agreement of the surviving limited liability company made pursuant to the first sentence of this subdivision shall be effective only if the agreement of merger is approved by the number of members required to approve an amendment to the operating agreement of the constituent limited liability company. (f) The surviving limited liability company or surviving other business entity shall keep the agreement of merger at the office referred to in subdivision (a) of Section 17057 or at the business address specified in paragraph (5) of subdivision (a) of Section 17552, as applicable. Upon the request of a member of a constituent limited liability company or a holder of shares, interests, or other securities of a constituent other business entity, a manager or, if no managers have been elected, any member of the surviving limited liability company or a person with authority to do so on behalf of the surviving other business entity shall promptly deliver to the member or the holder of shares, interests, or other securities, at the expense of the surviving limited liability company or surviving other business entity, a copy of the agreement of merger. A waiver by a member or holder of shares, interests, or other securities of the rights provided in this subdivision shall be unenforceable. 17552. (a) If the surviving entity is a limited liability company or an other business entity (other than a corporation in a merger in which a domestic corporation is a constituent party), after approval of a merger by the constituent limited liability companies and any constituent other business entities, the constituent limited liability companies or constituent other business entities shall file a certificate of merger in the office of, and on a form prescribed by, the Secretary of State. The certificate of merger shall be executed and acknowledged by each domestic constituent limited liability company by all of the managers of the limited liability company, unless a lesser number is specified in the articles of organization or the operating agreement of the constituent limited liability company, and by each constituent foreign limited liability company and each constituent other business entity by those persons required to execute the certificate or agreement of merger by the laws under which the constituent foreign limited liability company or other business entity is organized. The certificate of merger shall set forth all of the following: (1) The names and the Secretary of State's file numbers, if any, of each of the constituent limited liability companies and constituent other business entities, separately identifying the disappearing limited liability companies and disappearing other business entities and the surviving limited liability company or surviving other business entity. (2) If a vote of the members was required under Section 17551, a statement setting forth the total number of outstanding interests of each class entitled to vote on the merger and that the principal terms of the agreement of merger were approved by a vote of the number of interests of each class that equaled or exceeded the vote required, specifying each class entitled to vote and the percentage vote required of each class. (3) If the surviving entity is a limited liability company and not an other business entity, any change required to the information set forth in the articles of organization of the surviving limited liability company resulting from the merger, including any change in the name of the surviving limited liability company resulting from the merger. The filing of a certificate of merger setting forth any changes to the articles of organization of the surviving limited liability company shall have the effect of the filing of an amendment to the articles of organization by the surviving limited liability company, and the surviving limited liability company need not file a certificate of amendment under Section 17054 to reflect those changes. (4) The future effective date or time (which shall be a date or time certain not more than 90 days subsequent to the date of filing) of the merger, if the merger is not to be effective upon the filing of the certificate of merger with the office of the Secretary of State. (5) If the surviving entity is an other business entity or a foreign limited liability company, the full name, type of entity, legal jurisdiction in which the entity was organized and by whose laws its internal affairs are governed, and the address of the principal place of business of the entity. (6) Any other information required to be stated in the certificate of merger by the laws under which each constituent other business entity is organized, including, if a domestic corporation is a party to the merger, paragraph (2) of subdivision (g) of Section 1113. If the surviving entity is a foreign limited liability company in a merger in which a domestic corporation is a disappearing other business entity, a copy of the agreement of merger and attachments as required under paragraph (1) of subdivision (g) of Section 1113 shall be filed at the same time as the filing of the certificate of merger. (b) If the surviving entity is a domestic corporation or a foreign corporation in a merger in which a domestic corporation is a constituent party, after approval of the merger by the constituent limited liability companies and constituent other business entities, the surviving corporation shall file in the office of the Secretary of State a copy of the agreement of merger and attachments required under paragraph (1) of subdivision (g) of Section 1113. The certificate of merger shall be executed and acknowledged by each domestic constituent limited liability company by all of the managers of the limited liability company unless a lesser number is specified in the articles of organization or the operating agreement of the domestic constituent limited liability company. (c) A certificate of merger, or the agreement of merger, as is applicable under subdivisions (a) or (b), shall have the effect of the filing of a certificate of cancellation of articles of organization for each disappearing limited liability company and no disappearing limited liability company need file a certificate of cancellation of articles of organization under Section 17356 as a result of the merger. (d) If a disappearing other business entity is a foreign corporation qualified to transact intrastate business in this state, the filing of the certificate of merger or the agreement of merger shall automatically surrender its right to transact intrastate business. 17553. (a) Unless a future effective date or time is provided in the certificate of merger or in any agreement of merger required to be filed under Section 17552, in which event the merger shall be effective at that future effective date or time (which shall be a date or time certain not more than 90 days subsequent to the date of filing), a merger shall be effective upon the filing of the certificate of merger, or the agreement of merger, as is applicable under subdivision (a) or (b), in the office of the Secretary of State. (b) (1) For all purposes, a copy of the certificate of merger duly certified by the Secretary of State is conclusive evidence of the merger of (A) the constituent limited liability companies (either by themselves or together with constituent other business entities) into the surviving other business entity, or (B) the constituent limited liability companies or the constituent other business entities, or both, into the surviving limited liability company. (2) In a merger in which the surviving entity is a corporation in a merger in which a domestic corporation and a domestic limited liability company are parties to the merger, a copy of an agreement of merger certified on or after the effective date by an official having custody thereof has the same force in evidence as the original and, except as against the state, is conclusive evidence of the performance of all conditions precedent to the merger, the existence on the effective date of the surviving corporation, and the performance of the conditions necessary to the adoption of any amendment to the articles of incorporation of the surviving corporation, if applicable, contained in the agreement of merger. 17554. (a) Upon a merger of limited liability companies or limited liability companies and other business entities pursuant to this chapter, the separate existence of the disappearing limited liability companies and disappearing other business entities ceases and the surviving limited liability company or surviving other business entity shall succeed, without other transfer, act, or deed, to all the rights and property, whether real, personal, or mixed, of each of the disappearing limited liability companies and disappearing other business entities and shall be subject to all the debts and liabilities of each in the same manner as if the surviving limited liability company or surviving other business entity had itself incurred them. (b) All rights of creditors and all liens upon the property of each of the constituent limited liability companies and constituent other business entities shall be preserved unimpaired and may be enforced against the surviving limited liability company or the surviving other business entity to the same extent as if the debt, liability, or duty that gave rise to that lien had been incurred or contracted by it, provided that such liens upon the property of a disappearing limited liability company or disappearing other business entity shall be limited to the property affected thereby immediately prior to the time the merger is effective. (c) Any action or proceeding pending by or against any disappearing limited liability company or disappearing other business entity may be prosecuted to judgment, that shall bind the surviving limited liability company or surviving other business entity, or the surviving limited liability company or surviving other business entity may be proceeded against or be substituted in the disappearing limited liability company's or disappearing other business entity's place. (d) If a partnership is a party to a merger nothing in this chapter is intended to affect the liability a general partner of a disappearing partnership may have in connection with the debts and liabilities of the disappearing partnership existing prior to the time the merger is effective. 17554.5. (a) Upon merger pursuant to this chapter, a surviving domestic or foreign limited liability company or other business entity shall be deemed to have assumed the liability of each disappearing domestic or foreign limited liability company or other business entity that is taxed under Part 10 (commencing with Section 17001) of, or under Part 11 (commencing with Section 23001) of, Division 2 of the Revenue and Taxation Code for the following: (1) To prepare and file, or to cause to be prepared and filed, tax and information returns otherwise required of that disappearing entity as specified in Chapter 2 (commencing with Section 18501) of Part 10.2 of Division 2 of the Revenue and Taxation Code. (2) To pay any tax liability determined to be due. (b) If the surviving entity is a domestic limited liability company, domestic corporation, or registered limited liability partnership or a foreign limited liability company, foreign limited liability partnership, or foreign corporation that is registered or qualified to do business in California, the Secretary of State shall notify the Franchise Tax Board of the merger. 17555. (a) The merger of any number of domestic limited liability companies with any number of foreign limited liability companies or foreign other business entities shall be required to comply with Section 17550. (b) If the surviving entity is a domestic limited liability company or a domestic other business entity, the merger proceedings with respect to that limited liability company or other business entity and any domestic disappearing limited liability company shall conform to the provisions of this chapter governing the merger of domestic limited liability companies, but if the surviving entity is a foreign limited liability company or a foreign other business entity, then, subject to the requirements of subdivision (d) and Chapter 13 (commencing with Section 17600), with respect to any domestic constituent corporation, Section 1113 and Chapters 12 (commencing with Section 1200) and 13 (commencing with Section 1300) of Division 1 of Title 1, and with respect to any domestic constituent limited partnership, Article 7.6 (commencing with Section 15679.1) of Chapter 3 and Article 11.5 (commencing with Section 15911.20) of Chapter 5.5 of Title 2, the merger proceedings may be in accordance with the laws of the state or place of organization of the surviving limited liability company or surviving other business entity. (c) If the surviving entity is a domestic limited liability company or domestic other business entity, other than a domestic corporation, a certificate of merger shall be filed as provided in subdivision (a) of Section 17552 and thereupon, subject to subdivision (a) of Section 17553, the merger shall be effective as to each domestic constituent limited liability company and domestic constituent other business entity. If the surviving entity is a domestic corporation, the agreement of merger with attachments shall be filed as provided in subdivision (b) of Section 17552, and thereupon, subject to subdivision (a) of Section 17553, the merger shall be effective as to each domestic constituent limited liability company and domestic constituent other business entity unless another effective date is provided for in Chapter 11 (commencing with Section 1100) of Division 1 of Title 1, with respect to any constituent corporation or any constituent other business entity. (d) If the surviving entity is a foreign limited liability company or foreign other business entity, the merger shall become effective in accordance with the laws of the jurisdiction in which the surviving limited liability company or surviving other business entity is organized; but the merger shall be effective as to any domestic disappearing limited liability company as of the time of effectiveness in the foreign jurisdiction upon the filing in this state of a certificate of merger or agreement of merger as provided in Section 17552. (e) If a merger described in subdivision (c) or (d) also includes a foreign disappearing limited liability company previously registered for the transaction of intrastate business in this state pursuant to Section 17451, the filing of the certificate of merger or agreement of merger, as applicable, automatically has the effect of a cancellation of registration for that foreign limited liability company pursuant to Section 17456 without the necessity of the filing of a certificate of cancellation. (f) The provisions of subdivision (b) of Section 17551 and Chapter 13 (commencing with Section 17600) apply to the rights of the members of any of the constituent limited liability companies that are domestic limited liability companies and of any domestic limited liability company that is a parent of any foreign constituent limited liability company. (g) If the surviving entity is a foreign limited liability company or foreign other business entity, the surviving entity shall file the following with the Secretary of State: (1) An agreement that it may be served in this state in a proceeding for the enforcement of an obligation of any constituent entity and in a proceeding to enforce the rights of any holder of a dissenting interest or dissenting shares in a constituent domestic limited liability company or domestic other business entity. (2) An irrevocable appointment of the Secretary of State as its agent for service of process, and an address to which process may be forwarded. (3) An agreement that it will promptly pay the holder of any dissenting interest or dissenting share in a constituent domestic limited liability company or domestic other business entity the amount to which that person is entitled under California law. 17556. Whenever a domestic or foreign limited liability company or other business entity having any real property in this state merges with another limited liability company or other business entity pursuant to the laws of this state or of the state or place in which any constituent limited liability company or constituent other business entity was organized, and the laws of the state or place of organization (including this state) of any disappearing limited liability company or disappearing other business entity provide substantially that the making and filing of the agreement of merger or certificate of merger vests in the surviving limited liability company or surviving other business entity all the real property of any disappearing limited liability company and disappearing other business entity, the filing for record in the office of the county recorder of any county in this state in which any of the real property of the disappearing limited liability company or disappearing other business entity is located of either of the documents specified in subdivision (a) or (b) shall evidence record ownership in the surviving limited liability company or surviving other business entity of all interest of the disappearing limited liability company or disappearing other business entity in and to the real property located in that county. (a) A certificate of merger certified by the Secretary of State, or any other certificate as may be prescribed by the Secretary of State. (b) A copy of the agreement of merger or certificate of merger, certified by the Secretary of State or an authorized public official of the state or place pursuant to the laws of which the merger is effected.