Code of Virginia

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Code of Virginia
Title 13.1. Corporations
Chapter 14. Virginia Business Trust Act
5/20/2024

Article 11. Merger.

§ 13.1-1257. Authorization for merger.

Unless the governing instrument provides otherwise, a domestic business trust may merge with or into one or more business trusts or other business entities formed or organized or existing under the laws of Virginia or any other state or the United States or any foreign country or other foreign jurisdiction.

2002, c. 621.

§ 13.1-1258. Approval.

A. Unless otherwise provided in the articles of trust or the governing instrument of a business trust, a merger shall be approved by each business trust that is to merge by the affirmative vote of the trustees and the holders of two-thirds of the outstanding beneficial interests of such business trust.

B. A merger need be approved only by the trustees of a successor business trust if:

1. The merger does not reclassify or change its outstanding beneficial interests or otherwise amend its articles of trust or governing instrument; and

2. The beneficial interests to be issued or delivered in the merger are not more than twenty percent of the beneficial interests of the same class or series outstanding immediately before the merger becomes effective.

C. The merger shall be approved by any other business entity party to the merger in the manner required by the articles of incorporation or charter, declaration of trust, partnership agreement, or other organizational document of the other business entity and the laws of the jurisdiction where the other business entity is organized.

2002, c. 621.

§ 13.1-1259. Exchange of securities; termination or amendment of merger.

In connection with a merger, rights or securities of, or interests in, a business trust or other business entity that is a constituent party to the merger may be exchanged for or converted into cash, property, rights, or securities of, or interests in, the successor business trust or any other business entity, whether or not a party to the transaction. Notwithstanding prior approval, an agreement of merger may be terminated or amended under a provision for the termination or amendment contained in the agreement of merger.

2002, c. 621.

§ 13.1-1260. Repealed.

Repealed by Acts 2003, c. 373, effective October 1, 2003.

§ 13.1-1261. Articles of merger.

A. After a plan of merger is approved by each party to the merger, the surviving business trust or other surviving business entity shall file with the Commission articles of merger executed by each party to the merger setting forth:

1. The name and jurisdiction of formation or organization of each of the business trusts or other business entities planning to merge and, as to each foreign entity, the date of its formation, and whether it is authorized to do business in this Commonwealth;

2. That an agreement of merger has been approved and executed by each of the business trusts or other business entities planning to merge in the manner required by its governing instrument, articles of trust, articles of incorporation or charter, articles of organization or formation, certificate of limited partnership or other constituent documents and by the laws of the jurisdiction where it is organized;

3. The name of the successor business trust or other business entity;

4. Any amendment to the articles of incorporation or charter, certificate of limited partnership, articles of organization or formation of a limited liability company, articles of trust or governing instrument of the successor to be effected as part of the merger;

5. The manner and basis of converting or exchanging issued shares of stock of the merging corporations, outstanding partnership interests of the merging general partnerships, outstanding partnership interests of the merging limited partnerships, outstanding membership interests of the merging limited liability companies, or shares of beneficial interest of the merging business trusts into different shares of stock of a corporation, partnership interests of a general partnership, partnership interests of a limited partnership, membership interests of a limited liability company, shares of beneficial interest of a business trust, or other consideration, and the treatment of any issued shares of stock of the merging corporations, partnership interests of the merging general partnerships, partnership interests of the merging limited partnerships, membership interests of the merging limited liability companies, or shares of beneficial interest of the merging business trusts not to be converted or exchanged;

6. That the executed agreement of merger is on file at the principal place of business of the successor business trust or other business entity, and shall state the address of that principal place of business; and

7. That a copy of the agreement of merger will be furnished by the successor business trust or other business entity, on request and without cost, to any beneficial owner of any business trust or any person holding an interest in any other business entity that is a party to the merger.

B. If a foreign limited liability company, partnership, limited partnership, business trust, or corporation is a party to the merger, the articles of merger shall contain a statement that the merger is permitted by the state or other jurisdiction under whose law the limited liability company is organized, the partnership, limited partnership, or business trust is formed or the corporation is incorporated and that the foreign limited liability company, partnership, limited partnership, business trust, or corporation has complied with that law in effecting the merger.

C. If the Commission finds that the articles of merger comply with the requirements of law and that all required fees have been paid, it shall issue a certificate of merger. The certificate of merger shall become effective as provided in subsection D of § 13.1-1203.

D. A certificate of merger shall act as a certificate of cancellation as described in § 13.1-1238 for a domestic business trust that is not the surviving party to the merger, and such business trust's existence shall be canceled upon the effective date of the certificate of merger.

2002, c. 621; 2003, c. 373; 2008, c. 101.

§ 13.1-1262. Governing instrument.

A. Notwithstanding anything to the contrary contained in the governing instrument of a business trust, a governing instrument of a business trust containing a specific reference to this section may provide that an agreement of merger approved in accordance with this article may:

1. Effect any amendment to the governing instrument of the business trust; or

2. Effect the adoption of a new governing instrument of the business trust if it is the successor trust in the merger.

B. 1. Any amendment to the governing instrument of a business trust or adoption of a new governing instrument of the business trust made under this section shall be effective at the effective time or date of the merger.

2. The provisions of this subsection shall not be construed to limit the accomplishment of a merger or of any of the matters referred to herein by any other means provided for in the governing instrument of a business trust or other agreement or as otherwise permitted by law, including that the governing instrument of any constituent business trust to the merger shall be the governing instrument of the successor trust.

2002, c. 621.

§ 13.1-1263. Effect of merger.

When a merger takes effect:

1. The separate existence of each business trust, corporation, partnership, limited partnership, or limited liability company party to the merger, except the successor, ceases.

2. The shares of beneficial interests of each business trust party to the merger that are to be converted or exchanged under the terms of the merger cease to exist, subject to the rights of an objecting beneficial owner under this article.

3. In addition to any other purposes and powers set forth in the articles of merger, if the articles of merger provide, the successor has the purposes and powers of each party to the merger.

4. The title to all real estate and other property of each party to the merger is vested in the successor business trust without further reservation or impairment.

5. The successor has all the liabilities of each non-surviving party to the merger.

6. A governing instrument or an agreement of merger may provide that contractual dissenter's rights with respect to a beneficial interest in a business trust shall be available for any class or group of beneficial owners or beneficial interests in connection with any amendment of a governing instrument, any merger in which the business trust is a constituent party to the merger or sale of all or substantially all of the business trust's assets.

2002, c. 621.

§ 13.1-1263.1. Abandonment of merger.

A. Unless otherwise provided in the plan of merger or in the laws under which a foreign business trust or a domestic or foreign other business entity that is a party to a merger is organized or by which it is governed, after a plan of merger has been approved as required by this article, and at any time before the certificate of merger has become effective, the plan may be abandoned by a domestic business trust that is a party to the plan without action by its trustees or the holders of beneficial interests in accordance with any procedures set forth in the plan or, if no procedures are set forth in the plan, by a vote of the trustees and the holders of beneficial interests of the business trust that is equal to or greater than the vote cast for the plan pursuant to § 13.1-1258, subject to any contractual rights of other parties to the plan of merger.

B. If a merger is abandoned after articles of merger have been filed with the Commission but before the certificate of merger has become effective, in order for the certificate of merger to be abandoned, all parties to the plan of merger shall sign a statement of abandonment and deliver it to the Commission for filing prior to the effective time and date of the certificate of merger. If the Commission finds that the statement of abandonment complies with the requirements of law, it shall issue a certificate of abandonment, effective as of the date and time the statement of abandonment was received by the Commission, and the merger shall be deemed abandoned and shall not become effective.

C. The statement of abandonment shall contain:

1. The name of each domestic and foreign business trust and other business entity that is a party to the merger and its jurisdiction of formation and entity type;

2. When the survivor will be a domestic stock or nonstock corporation created by the merger, the name of the survivor set forth in the articles of merger;

3. The date on which the articles of merger were filed with the Commission;

4. The date and time on which the Commission's certificate of merger becomes effective; and

5. A statement that the merger is being abandoned in accordance with this section.

2021, Sp. Sess. I, c. 487.