Chapter 23B.11 RCW

MERGER AND SHARE EXCHANGE

Sections

23B.11.010Merger.
23B.11.020Share exchange.
23B.11.030Approval of plan of merger or share exchange.
23B.11.035Plan of merger or share exchangeSeparate voting group.
23B.11.040Merger of or into subsidiary.
23B.11.050Articles of merger or share exchange.
23B.11.060Effect of merger or share exchange.
23B.11.070Merger or share exchange with foreign corporation.
23B.11.080Merger.
23B.11.090Articles of merger.
23B.11.100MergerCorporation is surviving entity.
23B.11.110Merger with foreign and domestic entitiesEffect.


Merger.

(1) One or more corporations may merge into another corporation if the board of directors of each corporation adopts and its shareholders, if required by RCW 23B.11.030, approve a plan of merger.
(2) The plan of merger must 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.



Share exchange.

(1) A corporation may acquire all of the outstanding shares of one or more classes or series of another corporation if the board of directors of each corporation adopts and its shareholders, if required by RCW 23B.11.030, approve the exchange.
(2) The plan of exchange must 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;
(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 does not limit the power of a corporation to acquire all or part of the shares of one or more classes or series of another corporation through a voluntary exchange or otherwise.



Approval of plan of merger or share exchange.

(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 must recommend the plan of merger or share exchange to the shareholders unless (i) the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation or (ii) RCW 23B.08.245 applies, and in either case the board of directors communicates the basis for so proceeding to the shareholders; and
(b) The shareholders entitled to vote must approve the plan, except as provided in subsection (7) of this section.
(3) The board of directors may condition its submission of the proposed plan of merger or share exchange on any basis, including the affirmative vote of holders of a specified percentage of shares held by any group of shareholders not otherwise entitled under this title or the articles of incorporation to vote as a separate voting group on the proposed plan of merger or share exchange.
(4) The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with RCW 23B.07.050. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger or share exchange and must contain or be accompanied by a copy or summary of the plan.
(5) In addition to any other voting conditions imposed by the board of directors under subsection (3) of this section, the plan of merger must be approved by two-thirds of the voting group comprising all the votes entitled to be cast on the plan, and of each other voting group entitled under RCW 23B.11.035 or the articles of incorporation to vote separately on the plan, unless shareholder approval is not required under subsection (7) of this section. The articles of incorporation may require a greater or lesser vote than that provided in this subsection, or a greater or lesser vote by separate voting groups, so long as the required vote is not less than a majority of all the votes entitled to be cast on the plan of merger and of each other voting group entitled to vote separately on the plan. Separate voting by additional voting groups is required on a plan of merger under the circumstances described in RCW 23B.11.035.
(6) In addition to any other voting conditions imposed by the board of directors under subsection (3) of this section, the plan of share exchange must be approved by two-thirds of the voting group comprising all the votes entitled to be cast on the plan, and of each other voting group entitled under RCW 23B.11.035 or the articles of incorporation to vote separately on the plan. The articles of incorporation may require a greater or lesser vote than that provided in this subsection, or a greater or lesser vote by separate voting groups, so long as the required vote is not less than a majority of all the votes entitled to be cast on the plan of share exchange and of each other voting group entitled to vote separately on the plan. Separate voting by additional voting groups is required on a plan of share exchange under the circumstances described in RCW 23B.11.035.
(7) Approval by the shareholders of the surviving corporation on a plan of merger is not required if:
(a) The articles of incorporation of the surviving corporation will not differ, except for amendments enumerated in RCW 23B.10.020, from its articles of incorporation 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 the merger;
(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 the total number of voting shares of the surviving corporation authorized by its articles of incorporation 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 the total number of participating shares authorized by its articles of incorporation 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 approved, 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 approval, 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.



Plan of merger or share exchangeSeparate voting group.

(1) Except as otherwise required by subsection (3) of this section or otherwise permitted by subsection (4) of this section, the holders of the outstanding shares of a class or series are entitled to vote as a separate voting group on a proposed plan of merger or plan of share exchange if shareholder voting is otherwise required by this title and if, as a result of the proposed plan, holders of part or all of the class or series would hold or receive:
(a) Shares of any class or series of the surviving or acquiring corporation, or of any parent corporation of the surviving corporation, and either (i) that class or series has a greater number of authorized shares than the class or series held by the holders prior to the merger or share exchange, or (ii) the proposed plan effects a change in the number of shares held by the holders, or in the rights, preferences, or limitations of the shares they hold, or in the class or series of shares they hold, and such change adversely affects the holders;
(b) Shares of any class or series of the surviving or acquiring corporation, or of any parent corporation of the surviving corporation, and the holders who hold or receive shares of that class or series are adversely affected under the proposed plan, as compared to their circumstances prior to the proposed merger or share exchange, by the creation, existence, number of authorized shares, or rights or preferences with respect to distributions or to dissolution, of another class or series of shares of the surviving, acquiring, or parent corporation having rights or preferences with respect to distributions or to dissolution that are, or upon designation by the surviving, acquiring, or parent corporation's board of directors may be, prior, superior, or substantially equal to the shares of the class or series held or to be received by the holders in the proposed merger or share exchange; or
(c) Cash or any other form of consideration other than shares of the surviving or acquiring corporation or of any parent corporation of the surviving corporation, received upon redemption or cancellation of all or part of their shares pursuant to the proposed plan of merger or share exchange.
(2) If a proposed plan of merger or share exchange would affect only a series of a class of shares in one or more of the ways described in subsection (1) of this section, only the shares of that series are entitled to vote as a separate voting group on the proposed plan. A voting group entitled to vote separately under this section may never comprise a group of holders smaller than the holders of a single class or series authorized and designated as a class or series in the articles of incorporation, unless otherwise provided in the articles of incorporation or unless the board of directors conditions its submission of the proposed plan on a separate vote by one or more smaller voting groups.
(3) If a proposed plan of merger or share exchange, that would otherwise entitle two or more classes or series of shares to vote as separate voting groups under this section, would affect those two or more classes or series in the same or a substantially similar way, then instead of voting as separate voting groups, the shares of all similarly affected classes or series shall vote together as a single voting group on the proposed plan of merger or share exchange, unless otherwise provided in the articles of incorporation or unless the board of directors conditions its submission of the proposed plan on a separate vote by one or more classes or series. Holders of shares of two or more classes or series of shares who will, under a proposed plan, receive the same type of consideration in the form of shares of the surviving or acquiring corporation or of any parent corporation of the surviving corporation, cash or other form of consideration, or the same combination thereof, but in differing amounts resulting solely from application of provisions in the corporation's articles of incorporation governing distribution of consideration received in a merger or share exchange, are affected in the same or a substantially similar way and are not, by reason of receiving the same types or differing amounts of consideration, entitled to vote as separate voting groups on the proposed plan, unless the articles of incorporation expressly require otherwise or the board of directors conditions its submission of the proposed plan on a separate vote by one or more classes or series.
(4) A class or series of shares is entitled to the voting group rights granted by this section although the articles of incorporation generally describe the shares of the class or series as nonvoting shares. The articles of incorporation may, however, limit or deny the voting group rights granted by this section as to any class or series of issued or unissued shares, by means of a provision that makes explicit reference to the limitation or denial of voting group rights that would otherwise apply under this section.



Merger of or into subsidiary.

(1) A parent corporation owning at least ninety percent of the outstanding shares of each class of a subsidiary corporation may (a) merge the subsidiary into itself without approval of the shareholders of the parent or subsidiary, or (b) merge itself into the subsidiary without approval of the shareholders of the subsidiary. A merger of a parent corporation into its subsidiary otherwise will be governed by the provisions of chapter 23B.11 RCW applicable to mergers generally.
(2) The board of directors of the parent shall approve 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 or parent corporation, as applicable, into shares, obligations, or other securities of the surviving corporation or any other corporation or into cash or other property in whole or part.
(3) Within ten days after the corporate action becomes effective, the surviving corporation shall deliver a notice to each other shareholder of the subsidiary, which notice must include a copy of the plan of merger.
(4) Articles of merger under this section may not contain amendments to the articles of incorporation of the parent corporation, except for amendments enumerated in RCW 23B.10.020.



Articles of merger or share exchange.

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:
(1) The plan of merger or share exchange;
(2) If shareholder approval was not required, a statement to that effect; or
(3) If approval of the shareholders of one or more corporations party to the merger or share exchange was required, a statement that the merger or share exchange was duly approved by the shareholders pursuant to RCW 23B.11.030.



Effect of merger or share exchange.

(1) When a merger takes effect:
(a) Every other corporation party to the merger merges into the surviving corporation and the separate existence of every corporation except the surviving corporation ceases;
(b) The title to all real estate and other property owned by each corporation party to the merger is vested in the surviving corporation without reversion or impairment;
(c) The surviving corporation has 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 are amended to the extent provided in the plan of merger; and
(f) The former holders of the shares of every corporation party to the merger are entitled only to the rights provided in the articles of merger or to their rights under chapter 23B.13 RCW.
(2) When a share exchange takes effect, the shares of each acquired corporation are exchanged as provided in the plan, and the former holders of the shares are entitled only to the exchange rights provided in the articles of share exchange or to their rights under chapter 23B.13 RCW.



Merger or share exchange with foreign corporation.

(1) One or more foreign corporations may merge or enter into a share exchange with one 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 RCW 23B.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 RCW 23B.11.010 through 23B.11.040 and, if it is the surviving corporation of the merger or acquiring corporation of the share exchange, with RCW 23B.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 is deemed:
(a) To consent to service of process pursuant to RCW 23.95.450 in a proceeding to enforce any obligation or the rights of dissenting shareholders of each domestic corporation party to the merger or share exchange; and
(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 chapter 23B.13 RCW.
(3) This section does not limit the power of a foreign corporation to acquire all or part of the shares of one or more classes or series of a domestic corporation through a voluntary exchange or otherwise.

NOTES:

Effective dateContingent effective date2015 c 176: See note following RCW 23.95.100.



Merger.

(1) One or more domestic corporations may merge with one or more limited liability companies, partnerships, or limited partnerships if:
(a) The board of directors of each corporation adopts and the shareholders of each corporation approve, if approval would be necessary, the plan of merger as required by RCW 23B.11.030;
(b) The partners of each limited partnership approve the plan of merger as required by RCW 25.10.781;
(c) The partners of each partnership approve the plan of merger as required by RCW 25.05.375; and
(d) The members of each limited liability company approve, if approval is necessary, the plan of merger as required by RCW 25.15.421.
(2) The plan of merger must set forth:
(a) The name of each limited liability company, partnership, corporation, and limited partnership planning to merge and the name of the surviving limited liability company, partnership, corporation, or limited partnership into which each other limited liability company, partnership, corporation, or limited partnership plans to merge;
(b) The terms and conditions of the merger; and
(c) The manner and basis of converting the shares of each corporation, the member interests of each limited liability company, and the partnership interests in each partnership and each limited partnership into shares, limited liability company member interests, partnership interests, obligations, or other securities of the surviving limited liability company, partnership, corporation, or limited partnership, or into cash or other property, including shares, obligations, or securities of any other limited liability company, partnership, or corporation, and partnership interests, obligations, or securities of any other limited partnership, in whole or in part.
(3) The plan of merger may set forth:
(a) Amendments to the articles of incorporation of the surviving corporation;
(b) Amendments to the certificate of limited partnership of the surviving limited partnership; and
(c) Other provisions relating to the merger.

NOTES:

Effective date2015 c 188: See RCW 25.15.903.
Effective date2009 c 188: "Sections 1401 through 1416 of this act take effect July 1, 2010." [ 2009 c 188 § 1417.]



Articles of merger.

After a plan of merger for one or more corporations and one or more limited partnerships, one or more partnerships, or one or more limited liability companies is approved by the shareholders of each corporation (or adopted by the board of directors of any corporation for which shareholder approval is not required), is approved by the partners for each limited partnership as required by RCW 25.10.781, is approved by the partners of each partnership as required by RCW 25.05.380, or is approved by the members of each limited liability company as required by RCW 25.15.421, the surviving entity must:
(1) If the surviving entity is a corporation, file with the secretary of state articles of merger setting forth:
(a) The plan of merger;
(b) A statement that the merger was duly approved by the shareholders of each corporation pursuant to RCW 23B.11.030 (or a statement that shareholder approval was not required for a merging corporation); and
(c) A statement that the merger was duly approved by the partners of each limited partnership pursuant to RCW 25.10.781.
(2) If the surviving entity is a limited partnership, comply with the requirements in RCW 25.10.786.
(3) If the surviving entity is a partnership, comply with the requirements in RCW 25.05.380.
(4) If the surviving entity is a limited liability company, comply with the requirements in RCW 25.15.426.

NOTES:

Effective date2015 c 188: See RCW 25.15.903.
Effective date2009 c 188: See note following RCW 23B.11.080.



MergerCorporation is surviving entity.

When a merger of one or more corporations, one or more limited partnerships, one or more partnerships, or one or more limited liability companies takes effect, and a corporation is the surviving entity:
(1) Every other corporation, every limited partnership, every partnership, and every limited liability company party to the merger merges into the surviving corporation and the separate existence of every corporation except the surviving corporation, and every limited partnership, partnership, and limited liability company, ceases;
(2) The title to all real estate and other property owned by each corporation, limited partnership, partnership, and limited liability company party to the merger is vested in the surviving corporation without reversion or impairment;
(3) The surviving corporation has all the liabilities of each corporation, limited partnership, partnership, and limited liability company party to the merger;
(4) A proceeding pending against any corporation, limited partnership, partnership, or limited liability company 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, limited partnership, partnership, or limited liability company whose existence ceased;
(5) The articles of incorporation of the surviving corporation are amended to the extent provided in the plan of merger;
(6) The former holders of the shares of every corporation party to the merger are entitled only to the rights provided in the plan of merger or to their rights under chapter 23B.13 RCW; and
(7) The former holders of partnership interests of every limited partnership or partnership party to the merger and the former holders of member interests of every limited liability company party to the merger are entitled only to the rights provided in the plan of merger or to their rights under chapter 25.10 RCW.



Merger with foreign and domestic entitiesEffect.

(1) One or more foreign limited partnerships, foreign corporations, foreign partnerships, and foreign limited liability companies may merge with one or more domestic partnerships, domestic limited liability companies, domestic limited partnerships, or domestic corporations, provided that:
(a) The merger is permitted by the law of the jurisdiction under which each foreign limited partnership was organized and the law of the state or country under which each foreign corporation was incorporated and each foreign limited partnership or foreign corporation complies with that law in effecting the merger;
(b) If the surviving entity is a foreign or domestic corporation, that corporation complies with RCW 23B.11.090;
(c) If the surviving entity is a foreign or domestic limited partnership, that limited partnership complies with RCW 25.10.786;
(d) Each domestic corporation complies with RCW 23B.11.080;
(e) Each domestic limited partnership complies with RCW 25.10.781;
(f) Each domestic limited liability company complies with RCW 25.15.421; and
(g) Each domestic partnership complies with RCW 25.05.375.
(2) Upon the merger taking effect, a surviving foreign corporation, foreign limited partnership, foreign limited liability corporation, or foreign partnership is deemed:
(a) To consent to service of process pursuant to RCW 23.95.450 in a proceeding to enforce any obligation or the rights of dissenting shareholders or partners of each domestic corporation, domestic limited partnership, domestic limited liability company, or domestic partnership party to the merger; and
(b) To agree that it will promptly pay to the dissenting shareholders or partners of each domestic corporation, domestic limited partnership, domestic limited liability company, or domestic partnership party to the merger the amount, if any, to which they are entitled under chapter 23B.13 RCW, in the case of dissenting shareholders, or under chapter 25.10, 25.15, or 25.05 RCW, in the case of dissenting partners.

NOTES:

Reviser's note: This section was amended by 2015 c 176 § 2125 and by 2015 c 188 § 112, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Effective date2015 c 188: See RCW 25.15.903.
Effective dateContingent effective date2015 c 176: See note following RCW 23.95.100.
Effective date2009 c 188: See note following RCW 23B.11.080.