Plantillas de casos de prueba de aceptación

DEFINITION AND CONCEPT

Merger – a corporation absorbs the other and remains in existence while the others are dissolved. [Sec.76]

 One of the constituent corporations remains as an existing juridical person, whereas the other corporation shall cease to exist. Merger is the disappearance of one of the corporations [generally by amending the articles of incorporation and shortening its term of existence (Sec.40)] with the other corporation acquiring all the assets, rights of action, and assuming all the liabilities of the disappearing corporation.

Consolidation – a new corporation is created, and consolidating corporations are extinguished [Sec.76]

 If there is consolidation, there will be disappearance of all constituent corporations with the emergence of a new corporate entity which shall obtain all the assets of the disappearing corporations, and likewise shall assume all their liabilities.

CONSTITUENT VS.

CONSOLIDATED CORPORATION

Constituent Corporations – the parties to a merger or consolidation

Consolidated Corporation - The new single corporation created through consolidation.

Surviving Corporation – one of the constituent corporations which remain in existence after the merger

PLAN OF MERGER OR CONSOLIDATION [SEC. 76]

Each of the constituent corporations must draw up a Plan of Merger or Consolidation which shall set forth:

 Names of the corporation involved;

 Terms and mode of carrying it;

 Statement of changes, if any, in the present articles of the surviving corporation to be

formed in the case of merger; and with respect to the consolidated corporation in case of consolidation

ARTICLES OF MERGER OR CONSOLIDATION

Each of the constituent corporation shall execute Articles of Merger or Consolidation signed by the president/vice-president, and certified by the secretary/assistant secretary setting forth:

 Plan of merger or consolidation;

 For stock corporation, the number of shares outstanding; for non-stock, the number of members;

 As to each corporation, number of shares or members voting for and against such plan respectively.

The Articles of Merger or Consolidation:

 take the place of the Articles of Incorporation of the consolidated corporation; or

 amend the Articles of Incorporation of the surviving corporation.

PROCEDURE

 Approval by majority vote of each of the board of directors or trustees of the constituent corporations of the plan of merger or consolidation.

 Approval by the stockholders or members of each of such corporations. The affirmative vote of stockholders representing at least two-thirds (2/3) of the outstanding capital stock of each corporation in the case of stock corporations or at least two-thirds (2/3) of the members in the case of non-stock corporations shall be necessary for the approval of such plan.

o Holders of non-voting shares are entitled to vote on the plan. [Sec. 6, par. 6(6)]

 Notice of such meetings shall be given to all stockholders or members of the respective corporations, at least two (2) weeks prior to the date of the meeting, either personally or by registered mail. Said notice shall state the purpose of the meeting and shall include a copy or a summary of the plan of merger or consolidation.

 Any dissenting stockholder in stock corporations may exercise his appraisal right

in accordance with the Code. Provided, that if after the approval by the stockholders of such plan, the board of directors decides to abandon the plan, the appraisal right shall be extinguished.

 Amendment to the plan of merger or consolidation may be made by approval of the majority vote of the respective boards of directors or trustees of all the constituent corporations and ratified by the affirmative vote of stockholders representing at least two-thirds (2/3) of the outstanding capital stock or of two-thirds (2/3) of the members of each of the constituent corporations. Such plan, together with any amendment, shall be considered as the agreement of merger or consolidation.

 Articles of Merger or Articles of Consolidation shall be executed by each of the constituent corporations.

 Submission of Four (4) copies of the Articles of Merger or Articles of Consolidation to the SEC for approval.

o Mergers and consolidations of corporations governed by special laws requires a recommendation from the appropriate government agency [Sec. 79 (1)]

 If necessary, the SEC shall set a hearing, notifying all corporations concerned at least two (2) weeks before.

 Issuance of certificate of merger or consolidation.

EFFECTIVITY

Upon issuance of the certificate of merger or consolidation, such merger or consolidation shall become effective [Sec. 79].

PNB v. Andrada Electric & Engr. Co., Inc. (2002):

Merger or consolidation does not become effective by mere agreement of the constituent corporations. The approval of the SEC is required.

Notwithstanding Section 79, parties may stipulate a specific effective date of merger (or consolidation) where no third party will be prejudiced [SEC Opinion No. 09-13, July 1, 2009].

LIMITATIONS

In the case of merger or consolidation of banks or banking institutions, building and loan associations, trust companies, insurance companies, public utilities, educational institutions and other special corporations governed by special laws, the favorable recommendation of the appropriate government agency shall first be obtained [Sec.

79]

EFFECTS [SEC. 80]

 The constituent corporations shall become a single corporation.

 The separate existence of the constituents shall cease, except that of the surviving or the consolidated corporation.

o The absorbed or constituent corporations are ipso facto dissolved by operation of law [SEC Opinion, July 16, 1981]; there is no liquidation of the assets of the dissolved corporations [Campos].

 The surviving or the consolidated corporation shall possess all the rights, privileges, immunities and powers and shall be subject to all the duties and liabilities of a corporation.

 The surviving or the consolidated corporation shall possess all rights, privileges, immunities and franchises of each constituent corporation and the properties shall be deemed transferred to and vested in the surviving or consolidated corporation without further act or deed.

 All liabilities of the constituents shall pertain to the surviving or the consolidated corporation [assumption of liability is automatic [De Leon; Campos]].

 Any claim, action or proceeding pending by or against any of the constituent corporations may be prosecuted by or against the surviving or consolidated corporation; and

 The rights of the creditors or lien upon the property of any of each constituent corporation shall not be impaired by such merger or consolidation.