Code of Virginia

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Code of Virginia
Title 13.1. Corporations
Chapter 9. Virginia Stock Corporation Act
5/25/2024

Article 12.1. Mergers and Share Exchanges.

§ 13.1-721.1. Abandonment of a merger or share exchange.

A. Unless otherwise provided in the plan of merger or share exchange or in the laws under which a foreign corporation or a domestic or foreign eligible entity that is a party to a merger or a share exchange is organized or by which it is governed, after a plan of merger or share exchange has been adopted and approved as required by this article, and at any time before the certificate of merger or share exchange has become effective, the plan may be abandoned by a domestic corporation that is a party to the plan without action by its shareholders in accordance with any procedures set forth in the plan or, if no such procedures are set forth in the plan, in the manner determined by the board of directors, subject to any contractual rights of other parties to the plan of merger or share exchange.

B. If a merger or share exchange is abandoned after the articles of merger or share exchange have been filed with the Commission but before the certificate of merger or share exchange has become effective, in order for the certificate of merger or share exchange to be abandoned, all parties to the plan of merger or share exchange 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 or share exchange. 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 or share exchange shall be deemed abandoned and shall not become effective.

C. The statement of abandonment shall contain:

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

2. When the survivor will be a domestic corporation or a domestic 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 or share exchange were filed with the Commission;

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

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

2005, c. 765; 2010, c. 782; 2019, c. 734; 2020, c. 1226; 2021, Sp. Sess. I, c. 487.

§ 13.1-722. Repealed.

Repealed by Acts 2005, c. 765, cl. 2.

§ 13.1-722.1:1. Definitions.

As used in this article:

"Domesticated corporation" means the domesticating corporation as it continues in existence after a domestication.

"Domesticating corporation" means the domestic corporation that approves a plan of domestication pursuant to § 13.1-722.3 or the foreign corporation that approves a domestication pursuant to the organic law of the foreign corporation.

"Domestication" means a transaction pursuant to this article, including domestication of a foreign corporation as a domestic corporation or domestication of a domestic corporation in another jurisdiction, where the other jurisdiction authorizes such a transaction even if by another name.

2019, c. 734.

§ 13.1-722.2. Domestication.

A. By complying with the provisions of this article applicable to foreign corporations, a foreign corporation may become a domestic corporation if the domestication is permitted by the organic law of the foreign corporation.

B. By complying with the provisions of this article, a domestic corporation not required by law to be a domestic corporation may become a foreign corporation pursuant to a plan of domestication if the domestication is permitted by the organic law of the foreign corporation resulting from the domestication.

C. The plan of domestication shall include:

1. The jurisdiction of formation and name of the domesticating corporation;

2. The name and jurisdiction of formation of the domesticated corporation;

3. The manner and basis of reclassifying the shares and any rights to acquire shares of the domesticating corporation into shares or other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, if any;

4. If the domesticated corporation will be a domestic corporation, (i) the proposed amended and restated articles of incorporation of the domesticated corporation that satisfy the requirements of § 13.1-619, provided that provisions not required to be included in restated articles of incorporation may be omitted, and (ii) the proposed bylaws of the domesticated corporation, which shall not be included with the articles of domestication delivered to the Commission for filing; and

5. The other terms and conditions of the domestication.

D. In addition to the requirements of subsection C, a plan of domestication may contain any other provision not prohibited by law.

E. The terms of a plan of domestication may be made dependent upon facts objectively ascertainable outside the plan in accordance with subsection L of § 13.1-604.

2001, c. 545; 2002, c. 1; 2012, c. 130; 2019, c. 734.

§ 13.1-722.3. Action on a plan of domestication of a domestic corporation.

In the case of a domestication of a domestic corporation into a foreign jurisdiction, the plan of domestication shall be adopted in the following manner:

1. The plan of domestication shall first be adopted by the board of directors.

2. After adopting the plan of domestication the board of directors shall submit the plan to the shareholders for their approval.

In submitting the plan of domestication to the shareholders for approval, the board of directors shall recommend that the shareholders approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors shall inform the shareholders of the basis for that determination.

3. The board of directors may set conditions for approval of the plan of domestication by the shareholders or the effectiveness of the plan of domestication.

4. If the approval of the shareholders is to be sought at a shareholders meeting, the corporation shall notify each shareholder, regardless of whether entitled to vote, of the meeting of shareholders at which the plan of domestication is to be submitted for approval. The notice shall state that the purpose, or one of the purposes, of the meeting is to consider the plan of domestication and shall contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the articles of incorporation and the bylaws as they will be in effect immediately after the domestication.

5. Unless the articles of incorporation or the board of directors, acting pursuant to subdivision 3, require a greater vote, approval of the plan of domestication requires (i) the approval of the shareholders at a meeting at which a quorum exists consisting of more than two-thirds of the votes entitled to be cast on the plan and (ii) except as provided in subdivision 6, the approval of each class or series of shares voting as a separate voting group at the meeting at which a quorum of the voting group exists consisting of more than two-thirds of the votes entitled to be cast on the plan by that voting group. The articles of incorporation may provide for a greater or lesser vote than that provided for in this section so long as the vote provided for is not less than a majority of all votes cast on the plan by each voting group entitled to vote on the plan at a meeting at which a quorum of the voting group exists.

6. The articles of incorporation may expressly limit or eliminate the separate voting rights provided in clause (ii) of subdivision 5 as to any class or series of shares, except when the articles of incorporation of the foreign corporation resulting from the domestication include what would be in effect an amendment that would entitle the class or series to vote as a separate group under § 13.1-708 if it were a proposed amendment of the articles of incorporation of the domestic domesticating corporation.

7. If as a result of a domestication one or more shareholders of a domestic domesticating corporation would become subject to interest holder liability, approval of the plan of domestication shall require the signing in connection with the domestication, by each such shareholder, of a separate written consent to become subject to such interest holder liability, unless in the case of a shareholder that already has interest holder liability with respect to the domesticating corporation, the terms and conditions of the interest holder liability with respect to the domesticated corporation are substantially identical to those of the existing interest holder liability, other than for changes that eliminate or reduce such interest holder liability.

2001, c. 545; 2002, c. 1; 2019, c. 734.

§ 13.1-722.4. Repealed.

Repealed by Acts 2019, c. 734, cl. 2, effective July 1, 2021.

§ 13.1-722.5. Articles of domestication; effectiveness.

A. After (i) a plan of domestication of a domestic corporation has been adopted and approved as required by this chapter or (ii) a foreign corporation that is the domesticating corporation has approved a domestication as required under its organic law, articles of domestication shall be signed in the name of the domesticating corporation. The articles shall set forth:

1. The name of the domesticating corporation and its jurisdiction of formation;

2. The original name, date of formation, jurisdiction of formation, and entity type of the domesticating corporation and its name, jurisdiction of formation, and entity type upon each subsequent domestication or conversion;

3. The plan of domestication;

4. If the domesticating corporation is a domestic corporation:

a. The date the plan of domestication was approved;

b. A statement that the plan of domestication was approved by the unanimous consent of the shareholders, or that the plan was submitted by the board of directors to the shareholders in accordance with this chapter and was duly approved by the shareholders in the manner required by this chapter and by the articles of incorporation;

c. A statement that the corporation revokes the authority of its registered agent to accept service on its behalf and appoints the clerk of the Commission as an agent for service of process in any proceeding based on a cause of action arising during the time it was incorporated in the Commonwealth;

d. A mailing address to which the clerk may mail a copy of any process served on the clerk under subdivision c; and

e. A commitment by the corporation to notify the clerk of the Commission in the future of any change in the mailing address of the corporation; and

5. If the domesticating corporation is a foreign corporation, a statement that the domestication is permitted by and was approved in accordance with the organic law of the foreign corporation.

B. The articles of domestication shall be delivered to the Commission for filing. If the Commission finds that the articles of domestication comply with the requirements of law and that all required fees have been paid, it shall issue a certificate of domestication.

2001, c. 545; 2002, c. 1; 2015, c. 623; 2019, c. 734; 2020, c. 1226.

§ 13.1-722.6. Amendment of plan of domestication; abandonment.

A. A plan of domestication of a domestic corporation may be amended:

1. In the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended; or

2. In the manner provided in the plan, except that a shareholder that was entitled to vote on or consent to approval of the plan is entitled to vote on or consent to any amendment of the plan that will change:

a. The amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, to be received by any of the shareholders of the domesticating corporation under the plan;

b. The articles of incorporation or bylaws of the domesticated corporation that will be in effect immediately after the domestication becomes effective, except for changes that do not require approval of the shareholders of the domesticated corporation under its organic law or its proposed article of incorporation or bylaws as set forth in the plan; or

c. Any of the other terms or conditions of the plan, if the change would adversely affect the shareholder in any material respect.

B. Unless otherwise provided in the plan of domestication, after a plan of domestication has been adopted and approved by a domestic corporation as required by this article, and at any time before the certificate of domestication has become effective, the plan may be abandoned by the corporation without action by its shareholders in accordance with any procedures set forth in the plan or, if no such procedures are set forth in the plan, in the manner determined by the board of directors.

C. A domesticating corporation that is a foreign corporation may abandon its domestication to a domestic corporation in the manner prescribed by its organic law.

D. If a domestication is abandoned after the articles of domestication have been filed with the Commission but before the certificate of domestication has become effective, a statement of abandonment signed by the domesticating corporation shall be delivered to the Commission for filing prior to the effective time and date of the certificate of domestication. 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 domestication shall be deemed abandoned and shall not become effective.

E. The statement of abandonment shall contain:

1. The name of the domesticating corporation and its jurisdiction of formation;

2. When the domesticating corporation is a foreign corporation, the name of the domesticated corporation set forth in the articles of domestication;

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

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

5. A statement that the domestication is being abandoned in accordance with this section or, when the domesticating corporation is a foreign corporation, a statement that the foreign corporation abandoned the domestication as required by its organic law.

2001, c. 545; 2002, c. 1; 2019, c. 734; 2021, Sp. Sess. I, c. 487.

§ 13.1-722.7. Repealed.

Repealed by Acts 2019, c. 734, cl. 2, effective July 1, 2021.

§ 13.1-722.7:1. Effect of domestication.

A. When a domestication of a foreign corporation into a domestic corporation becomes effective:

1. All property owned by, and every contract right possessed by, the domesticating corporation are the property and contract rights of the domesticated corporation without transfer, reversion, or impairment;

2. All debts, obligations, and other liabilities of the domesticating corporation are the debts, obligations, and other liabilities of the domesticated corporation;

3. The name of the domesticated corporation may, but need not, be substituted for the name of the domesticating corporation in any pending proceeding;

4. The articles of incorporation and bylaws of the domesticated corporation become effective;

5. The shares of the domesticating corporation are reclassified into shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property in accordance with the terms of the domestication, and the shareholders of the domesticating corporation are entitled only to the rights provided to them by those terms and to any appraisal rights they may have under the organic law of the domesticating corporation;

6. The domesticated corporation is:

a. Incorporated under and subject to the organic law of the domesticated corporation;

b. The same corporation without interruption as the domesticating corporation; and

c. Deemed to have been incorporated on the date the domesticating corporation was originally incorporated; and

7. If the foreign corporation has a certificate of authority to transact business in the Commonwealth, its certificate of authority is deemed withdrawn.

B. When a domestication of a domestic corporation into a foreign jurisdiction becomes effective, the domesticated corporation is deemed to:

1. Appoint the clerk of the Commission as an agent for service of process in any proceeding (i) to enforce the rights of shareholders who exercise appraisal rights in connection with the domestication or (ii) based on a cause of action against the domesticating domestic corporation arising during the time it was in existence under the laws of the Commonwealth, which service of process shall be made on the clerk in accordance with § 12.1-19.1; and

2. Agree that it will promptly pay the amount, if any, to which such shareholders are entitled under Article 15 (§ 13.1-729 et seq.).

C. Except as otherwise provided in the organic law or organic rules of a domesticating foreign corporation, the interest holder liability of a shareholder in a foreign corporation that is domesticated into the Commonwealth who had interest holder liability in respect of such domesticating corporation before the domestication becomes effective shall be as follows:

1. The domestication does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the domestication becomes effective.

2. The provisions of the organic law of the domesticating corporation shall continue to apply to the collection or discharge of any interest holder liabilities preserved by subdivision 1, as if the domestication had not occurred.

3. The shareholder shall have such rights of contribution from other persons as are provided by the organic law of the domesticating corporation with respect to any interest holder liabilities preserved by subdivision 1, as if the domestication had not occurred.

4. The shareholder shall not, by reason of such prior interest holder liability, have interest holder liability with respect to any interest holder liabilities preserved that arise after the domestication becomes effective.

D. A shareholder who becomes subject to interest holder liability in respect of the domesticated corporation as a result of the domestication shall have such interest holder liability only in respect of interest holder liabilities that arise after the domestication becomes effective.

E. A domestication does not constitute or cause the dissolution of the domesticating corporation.

F. Property held for charitable purposes under the laws of the Commonwealth by a domestic or foreign corporation immediately before a domestication shall not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred except and to the extent permitted by or pursuant to the laws of the Commonwealth addressing cy pres or dealing with nondiversion of charitable assets.

G. A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance which is made to the domesticating corporation and which takes effect or remains payable after the domestication inures to the domesticated corporation.

H. A trust obligation that would govern property if transferred to the domesticating corporation applies to property that is transferred to the domesticated corporation after the domestication takes effect.

2019, c. 734; 2020, c. 1226.