Title 13.1. Corporations
Chapter 10. Virginia Nonstock Corporation Act
§ 13.1-894.1. (Effective January 1, 2027) Interest exchange.
A. Through an interest exchange:
1. A domestic corporation may acquire all of the membership interests of one or more classes of members of another domestic or foreign corporation, or all of the eligible interests of one or more classes of eligible interests of a domestic or foreign eligible entity, as well as rights to acquire any such membership interests or eligible interests, in exchange for membership interests or other securities, eligible interests, obligations, rights to acquire membership interests, other securities or eligible interests, cash, other property, or any combination of the foregoing, pursuant to a plan of interest exchange; or
2. All of the membership interests of one or more classes of members of a domestic corporation, as well as rights to acquire any such membership interests, may be acquired by another domestic or foreign corporation or other eligible entity, in exchange for membership interests or other securities, eligible interests, obligations, rights to acquire membership interests, other securities or eligible interests, cash, other property, or any combination of the foregoing, pursuant to a plan of interest exchange.
B. A foreign corporation or eligible entity shall be a party to an interest exchange only if the interest exchange is permitted by the organic law under which the corporation or eligible entity is organized or by which it is governed.
C. If the organic law or organic rules of a domestic eligible entity do not provide procedures for the approval of an interest exchange, a plan of interest exchange may be adopted and approved, and the interest exchange effectuated, in accordance with the procedures, if any, for a merger.
D. The plan of interest exchange shall include:
1. The name, jurisdiction of formation, and type of entity of each acquired entity and the name, jurisdiction of formation, and type of entity of the acquiring entity;
2. The terms and conditions of the interest exchange;
3. The manner and basis of exchanging membership interests of a domestic or foreign corporation or eligible interests in a domestic or foreign eligible entity whose membership interests or eligible interests will be acquired under the interest exchange into membership interests or other securities, eligible interests, obligations, rights to acquire membership interests, other securities or eligible interests, cash, other property, or any combination of the foregoing;
4. The manner and basis for exchanging any rights to acquire membership interests of a domestic or foreign corporation or eligible interests in a domestic or foreign eligible entity whose membership interests or eligible interests will be acquired under the interest exchange into membership interests or other securities, eligible interests, obligations, rights to acquire membership interests, other securities or eligible interests, cash, other property, or any combination of the foregoing; and
5. Any other provisions required by the organic law governing any foreign corporation or eligible entity that is a party to the interest exchange or its articles of incorporation or organic rules.
E. In addition to the requirements of subsection D, the plan of interest exchange may contain any other provision not prohibited by law.
F. Terms of a plan of interest exchange may be made dependent on facts objectively ascertainable outside the plan in accordance with subsection K of § 13.1-804.
G. Unless the plan of interest exchange provides otherwise, the plan of interest exchange may be amended prior to the effective date of the certificate of interest exchange, but if the members of a domestic corporation that is a party to the interest exchange are required by any provision of this chapter to vote on the plan, the plan shall not be amended subsequent to approval of the plan by such members to change any of the following, unless the amendment is subject to the approval of the members:
1. The amount or kind of membership interests or other securities, eligible interests, obligations, rights to acquire membership interests, other securities or eligible interests, cash, or other property or any combination of the foregoing to be issued by the corporation or to be received under the plan by the members of the acquired entity; or
2. Any of the other terms or conditions of the plan if the change would adversely affect such members in any material respect.
H. This section does not limit the power of a domestic corporation to acquire membership interests of another domestic or foreign corporation or eligible interests in an eligible entity in a transaction other than an interest exchange.
