Code of Virginia

Code of Virginia
Title 13.1. Corporations
9/25/2020

Article 12.1. Domestication.

§ 13.1-722.1:1. (Effective July 1, 2021) 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. (Effective until July 1, 2021) Domestication.

A. A foreign corporation may become a domestic corporation if the laws of the jurisdiction in which the foreign corporation is incorporated authorize it to domesticate in another jurisdiction. The laws of the Commonwealth shall govern the effect of domesticating in the Commonwealth pursuant to this article.

B. A domestic corporation not required by law to be a domestic corporation may become a foreign corporation if the jurisdiction in which the corporation intends to domesticate allows for the domestication. Regardless of whether the laws of the foreign jurisdiction require the adoption of a plan of domestication, the domestication shall be approved in the manner provided in this article. The laws of the jurisdiction in which the corporation domesticates shall govern the effect of domesticating in that jurisdiction.

C. The plan of domestication shall set forth:

1. A statement of the jurisdiction in which the corporation is to be domesticated;

2. The terms and conditions of the domestication, provided that such terms and conditions may not alter the designation, rights, preferences or limitations of all or part of the authorized shares except to the extent required to conform to the requirements of this chapter; and

3. For a foreign corporation that is to become a domestic corporation, as a referenced attachment, amended and restated articles of incorporation that comply with the requirements of § 13.1-619 as they will be in effect upon consummation of the domestication.

D. The plan of domestication may include any other provision relating to the domestication.

E. The plan of domestication may also include a provision that the board of directors may amend the plan at any time prior to issuance of the certificate of domestication or such other document required by the laws of the other jurisdiction to consummate the domestication. An amendment made subsequent to the submission of the plan to the shareholders of the corporation shall not alter or change any of the terms or conditions of the plan if the change would adversely affect the shares of any class or series of the corporation.

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

§ 13.1-722.2. (Effective July 1, 2021) 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. (Effective until July 1, 2021) Action on plan of domestication by a domestic corporation.

In the case of a domestic corporation:

A. The board of directors of the corporation shall adopt the plan of domestication.

B. After adopting the plan of domestication the board of directors shall submit the plan of domestication for approval by the shareholders.

C. For the plan of domestication to be approved:

1. The board of directors shall recommend the plan to the shareholders unless the board of directors determines that because of conflicts of interest or other special circumstances it should make no recommendation and communicates the basis of its determination to the shareholders with the plan; and

2. The shareholders shall approve the plan as provided in subsection F.

D. The board of directors may condition its submission of the plan of domestication to the shareholders on any basis.

E. The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with § 13.1-658 at which the plan of domestication is to be submitted for approval. The notice shall state that a purpose of the meeting is to consider the plan and shall contain or be accompanied by a copy of the plan.

F. Unless this chapter or the board of directors, acting pursuant to subsection D, requires a greater vote, the plan of domestication shall be approved by each voting group entitled to vote on the plan by more than two-thirds of all the votes entitled to be cast by that voting group. The articles of incorporation may provide for a greater or lesser vote than that provided for in this subsection or a vote by separate voting groups so long as the vote provided for is not less than a majority of all the 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.

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

§ 13.1-722.3. (Effective July 1, 2021) 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 effective July 1, 2021) Articles of domestication.

A. After the domestication of a foreign corporation is approved in the manner required by the laws of the jurisdiction in which the corporation is incorporated, the corporation shall file with the Commission articles of domestication setting forth:

1. The name of the corporation immediately prior to the filing of the articles of domestication and, if that name is unavailable for use in the Commonwealth or the corporation desires to change its name in connection with the domestication, a name that satisfies the requirements of § 13.1-630;

2. The plan of domestication;

3. The original jurisdiction of the corporation and the date the corporation was incorporated in that jurisdiction, and each subsequent jurisdiction and the date the corporation was domesticated in each such jurisdiction, if any, prior to the filing of the articles of domestication; and

4. A statement that the domestication is permitted by the laws of the jurisdiction in which the corporation is incorporated and that the corporation has complied with those laws in effecting the domestication.

B. 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.

C. The certificate of domestication shall become effective pursuant to § 13.1-606.

D. A foreign corporation's existence as a domestic corporation shall begin when the certificate of domestication is effective. Upon becoming effective, the certificate of domestication shall be conclusive evidence that all conditions precedent required to be performed by the foreign corporation have been complied with and that the corporation has been incorporated under this chapter.

E. If the foreign corporation is authorized to transact business in the Commonwealth under Article 17 (§ 13.1-757 et seq.), its certificate of authority shall be canceled automatically on the effective date of the certificate of domestication issued by the Commission.

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

§ 13.1-722.5. (Effective until July 1, 2021) Surrender of articles of incorporation upon domestication.

A. Whenever a domestic corporation has adopted and approved, in the manner required by this article, a plan of domestication providing for the corporation to be domesticated under the laws of another jurisdiction, the corporation shall file with the Commission articles of incorporation surrender setting forth:

1. The name of the corporation;

2. The jurisdiction in which the corporation is to be domesticated and the name of the corporation upon its domestication under the laws of that jurisdiction;

3. The plan of domestication;

4. A statement that the articles of incorporation surrender are being filed in connection with the domestication of the corporation as a foreign corporation to be incorporated under the laws of another jurisdiction and that the corporation is surrendering its charter under the laws of this Commonwealth;

5. A statement:

a. That the plan was adopted by the unanimous consent of the shareholders; or

b. That the plan was submitted to the shareholders by the board of directors in accordance with this chapter, and a statement of:

(1) The designation, number of outstanding shares and number of votes entitled to be cast by each voting group entitled to vote separately on the plan; and

(2) Either the total number of votes cast for and against the plan by each voting group entitled to vote separately on the plan or the total number of undisputed votes cast for the plan separately by each voting group and a statement that the number cast for the plan by each voting group was sufficient for approval by that voting group;

6. 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 its agent for service of process in any proceeding based on a cause of action arising during the time it was incorporated in the Commonwealth;

7. A mailing address to which the clerk may mail a copy of any process served on the clerk under subdivision 6; and

8. 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.

B. If the Commission finds that the articles of incorporation surrender comply with the requirements of law and that all required fees have been paid, it shall issue a certificate of incorporation surrender.

C. The corporation shall automatically cease to be a domestic corporation when the certificate of incorporation surrender becomes effective.

D. If the former domestic corporation intends to continue to transact business in the Commonwealth, then, within 30 days after the effective date of the certificate of incorporation surrender, it shall deliver to the Commission an application for a certificate of authority to transact business in the Commonwealth pursuant to § 13.1-759 together with a copy of its instrument of domestication and articles of incorporation and all amendments thereto, duly authenticated by the Secretary of State or other official having custody of corporate records in the state or country under whose laws it is incorporated or domesticated.

E. Service of process on the clerk of the Commission is service of process on a former domestic corporation that has surrendered its charter pursuant to this section. Service on the clerk shall be made in accordance with § 12.1-19.1 and service on the former domestic corporation may be made in any other manner permitted by law.

2001, c. 545; 2002, c. 1; 2015, c. 623.

§ 13.1-722.5. (Effective July 1, 2021) 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. (Effective until July 1, 2021) Effect of domestication.

A. When a foreign corporation's certificate of domestication in this Commonwealth becomes effective, with respect to that corporation:

1. The title to all real estate and other property remains in the corporation without reversion or impairment;

2. The liabilities remain the liabilities of the corporation;

3. A proceeding pending may be continued by or against the corporation as if the domestication did not occur;

4. The articles of incorporation attached to the articles of domestication constitute the articles of incorporation of the corporation; and

5. The corporation is deemed to:

a. Be incorporated under the laws of this Commonwealth for all purposes;

b. Be the same corporation as the corporation that existed under the laws of the jurisdiction or jurisdictions in which it was originally incorporated or formerly domiciled; and

c. Have been incorporated on the date it was originally incorporated or organized.

B. Any shareholder of a foreign corporation that domesticates into this Commonwealth who, prior to the domestication, was liable for the liabilities or obligations of the corporation is not released from those liabilities or obligations by reason of the domestication.

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

§ 13.1-722.6. (Effective July 1, 2021) 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 the 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. 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.

D. The statement of abandonment shall contain:

1. The name of the domesticating corporation;

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

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

4. A statement that the domestication is being abandoned in accordance with this section.

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

§ 13.1-722.7. (Repealed effective July 1, 2021) Abandonment of domestication.

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

B. If a domestication is abandoned under subsection A after articles of incorporation surrender have been filed with the Commission but before the certificate of incorporation surrender has become effective, written notice that the domestication has been abandoned in accordance with this section shall be filed with the Commission prior to the effective time and date of the certificate of incorporation surrender. The notice shall take effect upon filing and the domestication shall be deemed abandoned and shall not become effective.

C. If the domestication of a foreign corporation into the Commonwealth is abandoned in accordance with the laws of the jurisdiction in which the foreign corporation is incorporated after articles of domestication have been filed with the Commission but before the certificate of domestication has become effective, written notice that the domestication has been abandoned shall be filed with the Commission prior to the effective time and date of the certificate of domestication. The notice shall take effect upon filing and the domestication shall be deemed abandoned and shall not become effective.

2001, c. 545; 2002, c. 1; 2015, c. 623.

§ 13.1-722.7:1. (Effective July 1, 2021) 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.

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