Changes in Structure

Question 1

Overview changes in structure

Answer 1

• types of fundamental change in corporate structure
• requirements
• exception: short-form merger
• dissenter’s rights

Question 2

What are the types of fundamental change in corporate structure?

(five fundamental changes)

Answer 2

1. Merger = A + B = B
2. Consolidation = A + B = C
3. Dissolution
4. Fundamental Amendment to Articles
5. Sale of Majority of Assets

MC Diss. Fun. $ale

Question 3

Requirements for Fundamental Change in Corporate Structure

Answer 3

1) Board resolves to change
2) Special notice for special meeting
3) Majority of all shares entitled to vote approve the change
4) Notice of change filed with the state
5) Exception: Short-form merger
• Definition = a parent corporation merges with its own subsidiary where it owns 90% or more of the stock
• Reqs:
- board approval; and
- notice to shareholders

Question 4

Short-form merger

Answer 4

• Definition = a parent corporation merges with its own subsidiary where it owns 90% or more of the stock
• Reqs:
• board approval; and
• notice to shareholders

Question 5

Dissenter’s Rights

Answer 5

If a corporation approves a fundamental change, dissenting shareholders have a right to force the corporation to buy their shares at fair value

Procedure:

(1) Before vote: written notice of objection & intent to demand payment ($)
(2) Vote against or abstain from voting
(3) After vote: SH must promptly demand payment

Fair Value - ct has the power to appoint an expert appraiser to value to the shares and the appraisal will be binding on both parties