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HB 219 - Corporations; merger of parent into subsidiary

Reichert, Robert A. B. (126th)	Walker, Larry (141st)	Skipper, Jimmy (137th)
Campbell, Jr, Thomas R (42nd)

Status Summary	HC:	Judy	SC:		FR:	01/26/99	LA:	01/27/99	H - Read 2nd Time

First Reader Summary

A BILL to amend Chapter 2 of Title 14 of the Official Code of Georgia Annotated, relating to business corporations, so as to provide that a parent corporation may merge itself into a subsidiary corporation; to provide that such merger shall not require shareholder approval under certain conditions; and for other purposes.

Code Sections - 14-2-1104

HB 219                                             LC 21 5182 
 
 
 
 
 
 
                        A BILL TO BE ENTITLED 
                               AN ACT 
 
 
  1- 1  To amend Chapter 2 of Title 14 of the Official Code of 
  1- 2  Georgia Annotated, relating to business corporations, so as 
  1- 3  to provide that a parent corporation may merge itself into a 
  1- 4  subsidiary corporation; to provide that such merger shall 
  1- 5  not require shareholder approval under certain conditions; 
  1- 6  to provide for related matters; to repeal conflicting laws; 
  1- 7  and for other purposes. 
 
  1- 8       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: 
 
  1- 9                           SECTION 1. 
 
  1-10  Chapter 2 of Title 14 of the Official Code of Georgia 
  1-11  Annotated, relating to business corporations, is amended by 
  1-12  striking in its entirety Code Section 14-2-1104, relating to 
  1-13  the merger of a subsidiary corporation into a parent 
  1-14  corporation, and inserting in lieu thereof the following: 
 
  1-15    "14-2-1104. 
 
  1-16    (a) A parent corporation owning at least 90 percent of the 
  1-17    outstanding shares of each class of a subsidiary 
  1-18    corporation may either merge the subsidiary into itself or 
  1-19    merge itself into the subsidiary corporation without 
  1-20    approval of the shareholders of the parent or subsidiary 
  1-21    except as provided in subsection(b) of this Code section. 
 
  1-22    (b) If a parent corporation merges itself into a 
  1-23    subsidiary corporation as provided in subsection (a) of 
  1-24    this Code section, the parent corporation shall comply 
  1-25    with the requirements of Code Section 14-2-1103 unless: 
 
  1-26      (1) Immediately following the effective time of the 
  1-27      merger, the articles of incorporation and the bylaws of 
  1-28      the surviving corporation are identical, except for any 
  1-29      differences in the articles of incorporation permitted 
  1-30      by amendments enumerated in Code Section 14-2-1002, to 
  1-31      the articles of incorporation and the bylaws of the 
  1-32      parent corporation immediately prior to the effective 
  1-33      time of the merger; 
 
 
 
                                 -1- 
 
 
 
  2- 1      (2) Each shareholder of the parent corporation whose 
  2- 2      shares were outstanding immediately prior to the 
  2- 3      effective time of the merger will receive a like number 
  2- 4      of shares of the surviving corporation, with 
  2- 5      designations, preferences, limitations, and relative 
  2- 6      rights identical to those previously held by each 
  2- 7      shareholder; 
 
  2- 8      (3) The number and kind of shares of the surviving 
  2- 9      corporation outstanding immediately following the 
  2-10      effective time of the merger, plus the number and kind 
  2-11      of shares issuable as a result of the merger and by 
  2-12      conversion of securities issued pursuant to the merger 
  2-13      or the exercise of rights and warrants issued pursuant 
  2-14      to the merger, will not exceed the total number and kind 
  2-15      of shares of the parent corporation authorized by its 
  2-16      articles of incorporation immediately prior to the 
  2-17      effective time of the merger; and 
 
  2-18      (4) The directors of the parent corporation become or 
  2-19      remain the directors of the  surviving corporation upon 
  2-20      the effective time of the merger. 
 
  2-21    (b)(c) The board of directors of the parent shall adopt a 
  2-22    plan of merger that sets forth: 
 
  2-23      (1) The names of the parent and subsidiary; and 
 
  2-24      (2) The manner and basis of converting the shares of the 
  2-25      parent or subsidiary into shares, obligations, or other 
  2-26      securities of the parent surviving corporation or any 
  2-27      other corporation or into cash or other property in 
  2-28      whole or in part. 
 
  2-29    (c) (d)Within ten days after the corporate action is 
  2-30    taken, the parent surviving corporation shall mail  a copy 
  2-31    or summary of the plan of merger to each shareholder of 
  2-32    the subsidiary who does not waive the mailing requirement 
  2-33    in writing. 
 
  2-34    (d)(e)Articles If the parent corporation is the surviving 
  2-35    corporation, articles of merger or a certificate of merger 
  2-36    under this Code section may not contain amendments to the 
  2-37    articles of incorporation of the parent corporation 
  2-38    (except for amendments enumerated in Code Section 
  2-39    14-2-1002)." 
 
 
 
 
 
 
                                 -2- 
 
 
 
  3- 1                           SECTION 2. 
 
  3- 2  Said chapter is further amended by striking in its entirety 
  3- 3  paragraph (1) of subsection (a) of Code Section 14-2-1302, 
  3- 4  relating to the right to dissent, and inserting in lieu 
  3- 5  thereof the following: 
 
  3- 6      "(1) Consummation of a plan of merger to which the 
  3- 7      corporation is a party: 
 
  3- 8        (A) If approval of the shareholders of the corporation 
  3- 9        is required for the merger by Code Section 14-2-1103 
  3-10        or 14-2-1104 or the articles of incorporation and the 
  3-11        shareholder is entitled to vote on the merger; or 
 
  3-12        (B) If the corporation is a subsidiary that is merged 
  3-13        with its parent under Code Section 14-2-1104;" 
 
  3-14                           SECTION 3. 
 
  3-15  All laws and parts of laws in conflict with this Act are 
  3-16  repealed. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                 -3-