Kaplan Pgs 345-356 Changes and Takeovers

Question 1

What are changes that are considered fundamental with regard to the corporation?

Answer 1

• amendment of the articles of incorporation
  – mergers and consolidations
  – sale of all assets
  – dissolution

Question 2

What is a re-organization?

Answer 2

Mergers, share exchanges, and sale of assets

Question 3

What is the process for merger?

Answer 3

• first you need a plan of merger from the board with the names of the corporations that are preparing to merge, the name of the surviving corporation, the terms and conditions, the manner and basis for converting shares, and a statement of acts of changes in the articles of incorporation.
  – then it is submitted to the shareholders with written notice to them that specifies the purpose of the meeting and the proposed plan of merger. There needs to be a majority vote from the shareholders
  – once the plan is approved, it must be executed by the main officers of each corporation and the surviving corporation must file a copy of the merger and a certificate of the officers’ approval with the Secretary of State

Question 4

What is a short form merger?

Answer 4

When a subsidiary corporation merges into its parent. This occurs when the parent owns at least 90% of the outstanding shares of each class of its subsidiaries. It can then merge the subsidiaries into itself without the approval of shareholders

Question 5

Upon beginning dissolution, how long does a corporate existence continue?

Answer 5

Until a certificate of dissolution is filed with the Secretary of State

Question 6

How can directors or shareholders involuntarily dissolve the corporation?

Answer 6

• 50% or more of the directors
  – shareholders that have at least 1/3 of the outstanding shares, or anyone authorized in the articles of incorporation can bring an involuntary dissolution if:

– the corporation has abandoned its business for more than a year
– deadlock: the directors are equally divided and can’t agree on the management of affairs and the holders of the voting shares are so divided they cannot elect a board
– there’s internal dissension and shareholder deadlock
– those in control have failed to prevent fraud or mismanagement or abuse of authority, or properties being misapplied or wasted