SB657: Bill Text

SB657,110,2 1. Solely by reason of the status of the person as an interest holder of the entity under its governing law.

SB657,110,6 2. Under the organizational documents of the entity in accordance with its governing law which make one or more specified interest holders or categories of interest holders liable in their capacity as interest holders for all or specified liabilities of the entity.

SB657,110,8 (b) An obligation of an interest holder of an entity under its organizational documents to contribute to the entity.

SB657,110,9 (20) "Merger" means a transaction authorized by ss. 178.1121 to 178.1125.

SB657,110,11 (21) "Merging entity" means an entity that is a party to a merger and exists immediately before the merger becomes effective.

SB657,110,14 (22m) "Non-United States entity" means an entity whose governing law is the law of any jurisdiction other than the United States or any state, but does not include an entity that has domesticated under the law of any other state.

SB657,110,17 (23m) "Organizational documents" means, with respect to an entity, whether in a record or, to the extent permitted under the entity's governing law, other than in a record, the following or its equivalent under the entity's governing law:

SB657,110,19 (a) For a domestic or foreign corporation, whether or not for profit, its articles of incorporation and bylaws.

SB657,110,23 (b) For a domestic or foreign partnership, its partnership agreement and, in the case of a domestic or foreign limited liability partnership, its statement of qualification as a limited liability partnership or foreign limited liability partnership.

SB657,110,25 (c) For a domestic or foreign limited partnership, its certificate of limited partnership and partnership agreement.

SB657,111,2 (d) For a domestic or foreign limited liability company, its certificate or articles of organization and operating agreement.

SB657,111,3 (e) For a business trust, its agreement of trust and declaration of trust.

SB657,111,6 (f) For any other entity, the basic records, agreements, or other items that create the entity and control its internal governance and the relations among its interest holders.

SB657,111,9 (24) "Plan" means a plan of merger under s. 178.1122, a plan of interest exchange under s. 178.1132, a plan of conversion under s. 178.1142, or a plan of domestication under s. 178.1152.

SB657,111,11 (37) "Surviving entity" means the entity that continues in existence after or is created by a merger.

SB657,111,12 (38) "Type of entity" means a generic form of entity that is any of the following:

SB657,111,13 (a) Recognized at common law.

SB657,111,14 (b) Recognized under a governing law.

SB657,111,17 178.1102 Relationship of subchapter to other laws. (1) This subchapter does not authorize an act prohibited by, and does not affect the application or requirements of, law other than this subchapter.

SB657,111,22 (2) A transaction effected under this chapter may not create or impair a right, duty, or obligation of a person under the law of this state, other than this subchapter, relating to a change in control, takeover, business combination, control-share acquisition, or similar transaction involving a domestic constituent, acquired, or converting entity.

SB657,111,23 178.1103 Existing purpose.

SB657,112,5 (2) Property held for a charitable purpose under the law of this state by a domestic or foreign entity immediately before a transaction under this subchapter becomes effective may not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred. An entity that is or plans to be engaged in a transaction covered by this subchapter may apply to the circuit court for a determination regarding the transaction's compliance with cy pres or other law dealing with nondiversion of charitable assets.

SB657,112,9 (3) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to a merging entity which is not the surviving entity and that takes effect or remains payable after the merger inures to the surviving entity.

SB657,112,12 (4) A trust obligation that would govern property if transferred to a nonsurviving entity applies to property that is transferred to the surviving entity under this section.

SB657,112,15 178.1104 Nonexclusivity. The fact that a transaction under this subchapter produces a certain result does not preclude the same result from being accomplished in any other manner permitted by law other than this subchapter.

SB657,112,20 178.1105 Reference to external facts. A plan may refer to facts ascertainable outside the plan if the manner in which the facts will operate upon the plan is specified in the plan. The facts may include the occurrence of an event or a determination or action by a person, whether or not the event, determination, or action is within the control of a party to the transaction.

SB657,112,25 178.1121 Merger authorized. (1) One or more domestic partnerships may merge with or into one or more other constituent entities pursuant to ss. 178.1121 to 178.1125 and a plan of merger if the merger is permitted under the governing law of each constituent entity and each constituent entity approves the plan of merger in the manner required by its governing law.

SB657,113,5 (2) One or more other domestic or foreign entities may merge with or into a domestic partnership pursuant to ss. 178.1121 to 178.1125 and a plan of merger if the merger is permitted under the governing law of each constituent entity and each constituent entity approves the plan of merger in the manner required by its governing law.

SB657,113,7 178.1122 Plan of merger. (1) A plan of merger must be in a record and contain all of the following:

SB657,113,8 (a) As to each constituent entity, its name, type of entity, and governing law.

SB657,113,9 (b) The terms and conditions of the merger.

SB657,113,12 (c) The manner and basis of converting the interests in each constituent entity into interests, securities, or obligations of the surviving entity, rights to acquire such interests or securities, money, other property, or any combination of the foregoing.

SB657,113,15 (d) If the surviving entity preexists the merger, any proposed amendments to its organizational documents that are to be in a record immediately after the merger becomes effective.

SB657,113,17 (e) If the surviving entity is to be created in the merger, any of its organizational documents that are to be in a record immediately after the merger becomes effective.

SB657,113,19 (f) Any other matters required under the governing law of any constituent entity.

SB657,113,21 (2) In addition to the requirements of sub. (1), a plan of merger may contain any other provision relating to the merger and not prohibited by law.

SB657,113,24 178.1123 Approval of merger; amendment; abandonment. (1) Subject to s. 178.1161, a plan of merger must be approved by a vote or consent of all the partners of each domestic partnership that is a constituent entity.

SB657,114,5 (2) Subject to s. 178.1161, after a plan of merger is approved, and at any time before a merger becomes effective, the constituent entities may amend the plan of merger or abandon the merger as provided in the plan of merger or, except as otherwise provided in the plan of merger, with the same vote or consent as was required to approve the plan of merger.

SB657,114,13 (3) If, after articles of merger have been delivered to the department for filing and before the merger becomes effective, the plan of merger is amended in a manner that requires an amendment to the articles of merger or if the merger is abandoned, a statement of amendment or abandonment, signed by a constituent entity, must be delivered to the department for filing before the merger becomes effective. When the statement of abandonment becomes effective, the merger is abandoned and does not become effective. The statement of amendment or abandonment must contain all of the following:

SB657,114,14 (a) The name of each constituent entity.

SB657,114,15 (b) The date on which the articles of merger were filed by the department.

SB657,114,16 (c) The amendment to or the abandonment of the articles of merger.

SB657,114,18 (d) A statement that the amendment or abandonment was approved in accordance with this section.

SB657,114,21 (4) In addition to approval under sub. (1), a plan of merger must be approved by each constituent entity that is not a domestic partnership in accordance with any requirements of its governing law.

SB657,114,25 178.1124 Filings required for merger; effective date. (1) After a merger has been approved with respect to each constituent entity in accordance with its governing law, the constituent entities shall deliver, or cause to be delivered, to the department for filing articles of merger setting forth all of the following:

SB657,115,1 (a) The name, type of entity, and governing law of each constituent entity.

SB657,115,3 (b) The name, type of entity, and governing law of the surviving entity and, if the surviving entity is created by the merger, a statement to that effect.

SB657,115,5 (c) A statement that the plan of merger has been approved and adopted by each constituent entity in accordance with its governing law.

SB657,115,9 (d) 1. If the surviving entity preexists the merger, any amendments to its organizational documents under s. 178.1122 (1) (d) that are to be in a public record under its governing law or, if there are no such amendments, a statement to that effect.

SB657,115,13 2. If the surviving entity is to be created in the merger, any of its organizational documents under s. 178.1122 (1) (e) that are to be in a public record under its governing law, including, if the surviving entity is a domestic limited liability partnership, its statement of qualification.

SB657,115,15 (e) A statement that the plan of merger is on file at the principal office of the surviving entity.

SB657,115,17 (f) A statement that upon request the surviving entity will provide a copy of the plan of merger to any person that was an interest holder of a constituent entity.

SB657,115,20 (2) In addition to the requirements of sub. (1), the articles of merger may contain any other provisions relating to the merger, as determined by the constituent entities in accordance with the plan of merger.

SB657,115,24 (3) If the surviving entity is a foreign entity that will be required to register to do business in this state immediately after the merger and it has not previously registered to do so or been assigned a registration to do so under s. 178.1009, it shall so register.

SB657,115,25 (4) A merger takes effect at the effective date and time of the articles of merger.

SB657,116,2 178.1125 Effect of merger. (1) When a merger becomes effective, all of the following apply:

SB657,116,5 (a) Each merging entity merges into the surviving entity, and the separate existence of every constituent entity that is a party to the merger, except the surviving entity, ceases.

SB657,116,7 (am) 1. Except as provided in this paragraph, no interest holder shall have interest holder liability with respect to any of the constituent entities.

SB657,116,14 2. If, under the governing law of a constituent entity, one or more of the interest holders thereof had interest holder liability prior to the merger with respect to the entity, such interest holder or holders shall continue to have such liability and any associated contribution or other rights to the extent provided in such governing law with respect to debts, obligations, and other liabilities of the entity that accrued during the period or periods in which such interest holder or holders had such interest holder liability.

SB657,116,20 3. If, under the governing law of the surviving entity, one or more of the interest holders thereof will have interest holder liability after the merger with respect to the surviving entity, such interest holder or holders will have such liability and any associated contribution and other rights to the extent provided in such governing law with respect to the debts, obligations, and other liabilities of the surviving entity that accrue on or after the merger.

SB657,116,21 4. This paragraph does not affect liability under any taxation laws.

SB657,116,23 (b) The title to all property owned by each constituent entity is vested in the surviving entity without transfer, reversion, or impairment.

SB657,116,25 (c) The surviving entity has all debts, obligations, and other liabilities of each constituent entity.

SB657,117,4 (d) A civil, criminal, or administrative proceeding pending by or against any constituent entity may be continued as if the merger did not occur, or the surviving entity may be substituted in the proceeding for a constituent entity whose existence ceased.

SB657,117,8 (e) 1. If the surviving entity preexists the merger, its organizational documents are amended to the extent, if any, provided in the plan of merger and, to the extent such amendments are to be reflected in a public record, as provided in the articles of merger.

SB657,117,11 2. If the surviving entity is created in the merger, its organizational documents are as provided in the plan of merger and, to the extent such organizational documents are to be reflected in a public record, as provided in the articles of merger.

SB657,117,19 (f) The interests of each constituent entity that are to be converted into interests, securities, or obligations of the surviving entity, rights to acquire such interests or securities, money, other property, or any combination of the foregoing, are converted as provided in the plan of merger, and the former interest holders of the interests are entitled only to the rights provided to them in the plan of merger or to their rights, if any, under ss. 178.1161, 179.77, 180.1301 to 180.1331, or otherwise under the governing law of the constituent entity. All other terms and conditions of the merger also take effect.

SB657,117,22 (g) Except as prohibited by other law or as otherwise provided in the articles and plan of merger, all of the rights, privileges, immunities, powers, and purposes of each constituent entity vest in the surviving entity.

SB657,118,2 (h) Except as otherwise provided in the articles and plan of merger, if a merging entity is a partnership, limited liability company, or other entity subject to dissolution under its governing law, the merger does not dissolve the merging entity for the purposes of its governing law.

SB657,118,6 (2) (a) When a merger takes effect, the department is the agent of any foreign surviving entity for service of process in a proceeding to enforce any obligation or the rights of dissenting shareholders or other interest holders of each domestic constituent entity.

SB657,118,10 (b) When a merger takes effect, any foreign surviving entity shall promptly pay to the dissenting or dissociating interest holders of each domestic constituent entity the amount, if any, to which they are entitled under ss. 178.1161, 179.77, or 180.1301 to 180.1331 or the corresponding provisions of the entity's other governing law.

SB657,118,15 178.1131 Interest exchange authorized. (1) A domestic partnership may acquire all of one or more classes or series of interests of another domestic or foreign entity pursuant to ss. 178.1131 to 178.1135 and a plan of interest exchange if the interest exchange is permitted under the governing law applicable to the partnership and the acquired entity.

SB657,118,19 (2) All of one or more classes or series of interests of a domestic partnership may be acquired by another domestic or foreign entity pursuant to ss. 178.1131 to 178.1135 and a plan of interest exchange if the interest exchange is permitted under the governing law applicable to the acquiring entity and the partnership.

SB657,118,21 178.1132 Plan of interest exchange. (1) A plan of interest exchange must be in a record and contain all of the following:

SB657,118,23 (a) As to both the acquiring entity and the acquired entity, its name, type of entity, and governing law.

SB657,118,24 (b) The terms and conditions of the interest exchange.

SB657,119,3 (c) The manner and basis of exchanging the interests to be acquired for interests, securities, or obligations of the surviving entity, rights to acquire such interests or securities, money, other property, or any combination of the foregoing.

SB657,119,6 (d) Any proposed amendments to the organizational documents of the acquiring or acquired entity that will take effect when the interest exchange becomes effective.

SB657,119,8 (e) Any other matters required under the governing law of the acquired or acquiring entity.

SB657,119,11 (2) In addition to the requirements of sub. (1), a plan of interest exchange may contain any other provision relating to the interest exchange and not prohibited by law.

SB657,119,15 178.1133 Approval of interest exchange; amendment; abandonment. (1) Subject to s. 178.1161, a plan of interest exchange must be approved by a vote or consent of all the partners of each domestic partnership that is an acquiring or acquired entity.

SB657,119,21 (2) Subject to s. 178.1161, after a plan of interest exchange is approved, and at any time before an interest exchange becomes effective, the acquiring and acquired entities may amend the plan of interest exchange or abandon the interest exchange as provided in the plan of interest exchange or, except as otherwise provided in the plan of interest exchange, with the same vote or consent as was required to approve the plan of interest exchange.

SB657,120,5 (3) If, after articles of interest exchange have been delivered to the department for filing and before the interest exchange becomes effective, the plan of interest exchange is amended in a manner that requires an amendment to the articles of interest exchange or if the interest exchange is abandoned, a statement of amendment or abandonment, signed by either the acquiring entity or the acquired entity, must be delivered to the department for filing before the interest exchange becomes effective. When a statement of abandonment becomes effective, the interest exchange is abandoned and does not become effective. The statement of amendment or abandonment must contain all of the following:

SB657,120,6 (a) The name of the acquiring and acquired entities.

SB657,120,8 (b) The date on which the articles of interest exchange were filed by the department.

SB657,120,9 (c) The amendment to or abandonment of the articles of interest exchange.

SB657,120,11 (d) A statement that the amendment or abandonment was approved in accordance with this section.

SB657,120,14 (4) In addition to approval under sub. (1), a plan of interest exchange must be approved by any acquiring or acquired entity that is not a domestic partnership in accordance with any requirements of its governing law.

SB657,120,19 178.1134 Filings required for interest exchange; effective date. (1) After an interest exchange has been approved with respect to the acquiring and acquired entity in accordance with their governing laws, the acquiring entity shall deliver, or cause to be delivered, to the department for filing articles of interest exchange setting forth all of the following: