Section 23-1-40-9 - Parent corporation merger with subsidiary; shareholder vote not required; amending organizational documents; requirements; articles of merger(a) As used in this section, "holding company" means a corporation that, from its incorporation until consummation of a merger governed by this section, was at all times a direct or indirect wholly owned subsidiary of the parent corporation and its shares of capital stock are issued in the merger.(b) For purposes of subsections (d)(7), (e), (f), and (g), "organizational documents" means:(1) if used in reference to a corporation, the articles of incorporation of the corporation; and(2) if used in reference to a limited liability company, the operating agreement of the limited liability company.(c) As used in this section, "parent corporation" means a domestic corporation that: (1) before a merger governed by this section, was owned by its shareholders; and(2) after the merger, the parent corporation or its successor becomes or remains a direct or indirect wholly owned subsidiary of a holding company.(d) Notwithstanding the requirements of section 3 of this chapter or IC 23-0.6-2-3, if the subsidiary of the parent corporation party to the merger is a limited liability company, and unless expressly required by a corporation's articles of incorporation, a vote of shareholders of a parent corporation is not necessary to authorize a merger with or into a single direct or indirect wholly owned subsidiary of the parent corporation if all the following apply:(1) As a result of the merger, the parent corporation or its successor becomes or remains a direct or indirect wholly owned subsidiary of the holding company.(2) The parent corporation and the direct or indirect wholly owned subsidiary of the parent corporation are the only parties to the merger.(3) Each share or fraction of a share of the capital stock of the parent corporation outstanding immediately before the effective time of the merger is converted in the merger into a share or an equal fraction of a share of capital stock of a holding company having the same:(A) designations, rights, powers, and preferences; and(B) qualifications, limitations, and restrictions; as the share of stock of the parent corporation being converted in the merger.
(4) The holding company and the parent corporation are domestic corporations and the direct or indirect wholly owned subsidiary that is the other party to the merger is a domestic corporation or domestic limited liability company.(5) The articles of incorporation and bylaws of the holding company immediately following the effective time of the merger contain provisions identical to the articles of incorporation and bylaws of the parent corporation immediately before the effective time of the merger. However, the following are not required to be identical under this subdivision: (A) Any provisions regarding: (i) the incorporator or incorporators;(ii) the corporate or entity name;(iii) the registered office and agent;(iv) the initial board of directors; or(v) the initial subscribers for shares.(B) Any provisions contained in any amendment to the articles of incorporation as were necessary to effect a change, exchange, reclassification, subdivision, combination, or cancellation of shares, if the change, exchange, reclassification, subdivision, combination, or cancellation has become effective.(6) The directors of the parent corporation become or remain the directors of the holding company upon the effective time of the merger.(7) Subject to subsections (e) and (f), the organizational documents of the surviving entity immediately following the effective time of the merger contain provisions identical in substance to the articles of incorporation of the parent corporation immediately before the effective time of the merger. However, subject to subsection (e), the following are not required to be identical under this subdivision: (A) Any provisions regarding: (i) the incorporator or incorporators;(ii) the corporate or entity name;(iii) the registered office and agent;(iv) the initial board of directors;(v) the initial subscribers for shares;(vi) references to members rather than shareholders;(vii) references to interests, units, or the like rather than shares; or(viii) references to managers, managing members, or other members of the governing body rather than directors.(B) Any provisions contained in any amendment to the articles of incorporation as were necessary to effect a change, exchange, reclassification, subdivision, combination, or cancellation of shares, if the change, exchange, reclassification, subdivision, combination, or cancellation has become effective.(8) The shareholders of the parent corporation do not recognize gain or loss for federal income tax purposes as determined by the board of directors of the parent corporation.(e) The organizational documents of the surviving entity must be amended in the merger to contain, if not contained in the organizational documents, provisions that require:(1) any act or transaction by or involving the surviving entity, other than the election or removal of: (A) directors or managers;(C) other members of the governing body of the surviving entity; that requires for its adoption under this article or its organizational documents that the approval of the shareholders or members of the surviving entity must, by specific reference to this section, require the approval of the shareholders of the holding company (or any successor by merger), by the same vote as is required by this article or by the organizational documents of the surviving entity. However, for purposes of this subdivision, any surviving entity that is not a corporation shall include in the amendment a requirement that the approval of the shareholders of the holding company be obtained for any act or transaction by or involving the surviving entity, other than the election or removal of directors or managers, managing members, or other members of the governing body of the surviving entity, which would require the approval of the shareholders of the surviving entity if the surviving entity were a corporation subject to this article;
(2) any amendment of the organizational documents of a surviving entity that is not a corporation, which amendment would, if adopted by a corporation subject to this article, be required to be included in the articles of incorporation of the corporation, must, by specific reference to this section, require the approval of the shareholders of the holding company (or any successor by merger), by the same vote as is required by this article or by the organizational documents of the surviving entity; and(3) the business and affairs of a surviving entity that is not a corporation must be managed by or under the direction of a board of directors, board of managers, or other governing body consisting of individuals who are subject to the same standards of conduct applicable to, and who are liable for breach of the standards of conduct to the same extent as, directors of a corporation subject to this article.(f) The organizational documents of the surviving entity may be amended in the merger: (1) to reduce the number of classes and shares of capital stock or other equity interests or units that the surviving entity is authorized to issue; and(2) to eliminate any provisions described in IC 23-1-33-6.(g) Nothing in subsection (e) or any provision of a surviving entity's organizational documents required by subsection (e) may be considered or construed to require approval of the shareholders of the holding company to elect or remove directors or managers, managing members, or other members of the governing body of the surviving entity.(h) From and after the effective time of a merger adopted by a parent corporation by action of its board of directors and without any vote of shareholders under this section: (1) to the extent the restrictions of IC 23-1-42 or IC 23-1-43 applied to the parent corporation or to any of its shareholders at the effective time of the merger, the restrictions must apply to the holding company and such shareholders immediately after the effective time of the merger as though the holding company were the parent corporation, and all shares of the holding company acquired in the merger shall for purposes of IC 23-1-42 and IC 23-1-43 be considered to have been acquired at the time that the shares of the parent corporation converted in the merger were acquired, and provided further that:(A) any shares that immediately before the effective time of the merger were not control shares within the meaning of IC 23-1-42 do not solely by reason of the merger become control shares of the holding company; and(B) any shareholder who immediately before the effective time of the merger was not an interested shareholder within the meaning of IC 23-1-43 does not solely by reason of the merger become an interested shareholder of the holding company;(2) if the corporate name of the holding company immediately following the effective time of the merger is the same as the corporate name of the parent corporation immediately before the effective time of the merger, the shares of capital stock of the holding company into which the shares of capital stock of the parent corporation are converted in the merger shall be represented by the share certificates that previously represented shares of capital stock of the parent corporation; and(3) to the extent a shareholder of the parent corporation immediately before the merger had standing to institute or maintain derivative litigation on behalf of the parent corporation, this section may not be considered or construed to limit or extinguish that standing.(i) If a plan of merger is adopted by a parent corporation by action of its board of directors and without any vote of shareholders under this section, the secretary or assistant secretary of the parent corporation shall certify in the articles of merger filed under section 5 of this chapter or IC 23-0.6-2-5 that the plan of merger has been adopted under this section and that the conditions specified in subsections (d), (e), and (f) have been satisfied.(j) After the requirements of subsection (i) are met, the articles of merger shall then be filed and become effective, in accordance with section 5 of this chapter or IC 23-0.6-2-5. The filing constitutes a representation by the person who executes the articles of merger that the facts stated in the articles of merger remain true immediately before the filing.Amended by P.L. 118-2017,SEC. 18, eff. 1/1/2018.Added by P.L. 119-2015, SEC. 15, eff. 7/1/2015.