PRIOR PRINTER'S NO. 3516 | PRINTER'S NO. 3694 |
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. | 2234 | Session of 2014 |
INTRODUCED BY TURZAI, DERMODY, KOTIK, MACKENZIE, MARSHALL, MILLARD, GREINER, PAINTER, KILLION, READSHAW, DAVIS, EVERETT, BOBACK, THOMAS, TRUITT, ROZZI, MUSTIO, BARBIN, AUMENT, BAKER, COHEN, MILNE, DENLINGER, MICOZZIE, OBERLANDER, GROVE, SWANGER, BROWNLEE, MENTZER, CUTLER, FEE, WATSON, McNEILL, MURT, COX, BLOOM, METCALFE, FRANKEL, HICKERNELL, LAWRENCE, SAYLOR, GABLER, HARHART, CARROLL, LONGIETTI, KORTZ, CAUSER, GRELL, DeLUCA, D. COSTA, GOODMAN, CLYMER, MULLERY, BRADFORD, GILLEN, HANNA, SANTARSIERO, F. KELLER, ROCK, KAMPF, GINGRICH, PICKETT, KNOWLES, GODSHALL, KRIEGER, DONATUCCI, BROOKS AND FLECK, MAY 5, 2014
AS REPORTED FROM COMMITTEE ON COMMERCE, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 10, 2014
AN ACT
1Amending Titles 15 (Corporations and Unincorporated
2Associations) and 54 (Names) of the Pennsylvania Consolidated
3Statutes, modernizing the law on corporations and
4unincorporated associations by doing the following:
5Adding provisions applicable to associations generally on<-
6names, mergers, interest exchanges, conversions, divisions,
7domestications and registration of foreign associations to do
8business.
9Extensively revising preliminary provisions on
<-10definitions, communication, filing, fees, definitive and
11contingent domestication of associations, <-general provisions,
12entities generally, entity transactions and foreign
13associations.
14As to business corporations, extensively revising:
15preliminary provisions on definitions, equitable
16relief and applicability;
17general incorporation provisions on names, articles
18of incorporation, applicability and notice to demand
19payment;
20management and ownership provisions on shareholder
21action;
1fundamental change provisions on omissions,
2termination, de facto transaction, proposals, special
3treatment of shares, submission of matters to
4shareholders, liabilities, <-merger, share exchange, sale
5of assets, division and, conversion<-, voluntary
6dissolution and winding up;
<-7nonstock corporation provisions on application;
8statutory close corporation provisions on
9application;
10registered corporation provisions on call of special
11meetings of shareholders, shareholder transactions and
12management adoption of merger plans;
<-13management corporation provisions on application and
14bylaw and fundamental change procedures;
15professional corporation provisions on application
16and corporate name;
17insurance corporation provisions on application;
18benefit corporation provisions on applicability and
19election of status; and
20foreign business corporation provisions on admission,
21excluded activities, names, commencing business,
22certificates of authority, termination, address change
23after withdrawal, name registration, penalties, powers
24and duties, registered offices and domestication.
25As to nonprofit corporations, extensively revising:
26general provisions on definitions and applicability;
27incorporation provisions on corporate name, changes
28and reservation;
29management and ownership provisions on action;
30fundamental change provisions on <-filed plans,
31statement of termination, proposal of fundamental
32transactions, authorization, plans, notice, procedure,
33foreign corporations, articles, filing, effectiveness,
34resulting effect, merger, voluntary transfer <-of assets,
35division and conversion; and
36foreign nonprofit corporate provisions on admission,
37excluded activities, names, commencing business,
38certificates of authority, organic change, termination,
39address change after withdrawal, name registration,
40penalties, powers and duties, registered offices and
41domestication.
42As to cooperative corporations, extensively revising
43workers cooperative corporation provisions on definitions,
44nature and articles <-and terminating provisions on generation
45choices for customers of electric cooperatives.
46As to partnerships and limited liability companies,
47extensively revising:
48registered limited liability partnership provisions
49on name and foreign partnerships;
50limited partnership provisions on definitions, name,
51cancellation of certificate, merger and consolidation,
1nonjudicial dissolution, division and foreign limited
2partnerships; and
3limited liability company provisions on definitions,
4name, election, merger and consolidation, division and
5foreign companies.
6As to unincorporated associations, extensively revising:
7preliminary provisions on definitions; and
8professional associations provisions on
9applicability.
10As to business trusts, extensively revising provisions on
11creation, status and termination, on documentation and on
12foreign business trusts.
13In names:
14as to fictitious names, further providing for scope
15and registration; and
16as to corporate and associational names, further
17providing for a register and for decennial filings.
18Making editorial changes.
19The General Assembly of the Commonwealth of Pennsylvania
20hereby enacts as follows:
21Section 1. This act shall be known and may be cited as the
22Association Transactions Act.
<-23Section 1.1. The General Assembly finds and declares as
24follows:
25(1) It is necessary to modernize the law of this
26Commonwealth on the organization and governance of
27corporations and other associations in order to make the
28Commonwealth competitive with other states in attracting
29business organizations.
30(2) This act is designed to amend 15 Pa.C.S. Pt. I to
31integrate the law on corporations and other associations by
32enacting provisions applicable to all forms of associations
33and authorizing transactions involving any form of
34association.
35(3) It is also necessary to modernize the law on those
36subjects in order to improve the functioning of the Bureau of
37Corporations and Charitable Organizations, which administers
1that law.
2(4) This act is designed to amend 15 Pa.C.S. Pt. I to
3integrate the law on entity names, entity transactions and
4registration of foreign entities into a single coherent body
5of law that can be efficiently administered by the Bureau of
6Corporations and Charitable Organizations and easily used and
7understood by the citizens of the Commonwealth.
8Section <-1.1 1.2. The introductory paragraph, the definitions
9of "association," "cooperative corporation," "corporation for
10profit," and "corporation not-for-profit," paragraph (2) of the
11definition of "court" and the definitions of "domestic savings
12association" and "savings association" in section 102 of Title
1315 of the Pennsylvania Consolidated Statutes are amended and the
14section is amended by adding definitions and a subsection to
15read:
16§ 102. Definitions.
17(a) Defined terms.--Subject to additional or inconsistent
18definitions contained in subsequent provisions of this title
19that are applicable to specific provisions of this title, the
20following words and phrases when used in this title shall have,
21unless the context clearly indicates otherwise, the meanings
22given to them in this section:
23* * *
24"Association." A corporation for profit or not-for-profit, a
25partnership, a limited liability company, a business or
26statutory trust, an entity or two or more persons associated in
27a common enterprise or undertaking. The term does not include:
28(1) a testamentary trust or an inter vivos trust as
29defined in 20 Pa.C.S. § 711(3) (relating to mandatory
30exercise of jurisdiction through orphans' court division in
1general)[.];
2(2) an association or relationship that:
3(i) is not a person that has:
4(A) a legal existence separate from any interest
5holder of the person; or
6(B) the power to acquire an interest in real
7property in its own name; and
8(ii) is not a partnership under the rules stated in
9section 8312 (relating to rules for determining the
10existence of a partnership) or a similar provision of the
11law of another jurisdiction;
12(3) a decedent's estate; or
13(4) a government or a governmental subdivision, agency
14or instrumentality.
15* * *
16"Business corporation." A domestic or foreign business
17corporation as defined in section 1103 (relating to
18definitions), whether or not it is a cooperative corporation.
19* * *
20"Cooperative corporation." A domestic corporation that is
21subject to Subpart D of Part II (relating to cooperative
22corporations), or a foreign corporation that is subject to a
23similar law of a foreign jurisdiction.
24"Corporation for profit." A domestic or foreign corporation
25incorporated for a purpose or purposes involving pecuniary
26profit, incidental or otherwise, to its shareholders or members,
27whether or not it is a cooperative corporation.
28"Corporation not-for-profit." A domestic or foreign
29corporation not incorporated for a purpose or purposes involving
30pecuniary profit, incidental or otherwise, whether or not it is
1a cooperative corporation.
2"Court." Subject to any inconsistent general rule prescribed
3by the Supreme Court of Pennsylvania:
4* * *
5(2) where an association results from a merger,
6[consolidation,] division or other transaction without
7establishing a registered office in this Commonwealth or
8withdraws as a foreign corporation or association, the court
9of common pleas in which venue would have been laid
10immediately prior to the transaction or withdrawal.
11* * *
12"Dissenters rights." The rights and remedies provided by
13Subchapter D of Chapter 15 (relating to dissenters rights).
14"Distributional interest." The right under the organic law
15of an entity that is not a corporation for profit or not-for-
16profit, or under the organic rules of such an entity, to receive
17distributions from the entity.
18"Domestic association." An association, the internal affairs
19of which are governed by the law of this Commonwealth.
20* * *
21"Domestic entity." An entity, the internal affairs of which
22are governed by the law of this Commonwealth.
23"Domestic filing association." A domestic association, the
24formation of which requires the filing of a public organic
25record. The term does not include a general partnership that is
26also:
27(1) a limited liability partnership; or
28(2) an electing partnership.
29"Domestic filing entity." A domestic entity, the formation
30of which requires the filing of a public organic record. The
1term does not include a general partnership that is also:
2(1) a limited liability partnership; or
3(2) an electing partnership.
4* * *
5["Domestic savings association." A domestic corporation for
6profit which is an association as defined in section 102(3) of
7the former act of December 14, 1967 (P.L.746, No.345), known as
8the Savings Association Code of 1967.]
9* * *
10"Electronic." Relating to technology having electrical,
11digital, magnetic, wireless, optical, electromagnetic or similar
12capabilities.
13"Entity." A domestic or foreign:
14(1) business corporation;
15(2) nonprofit corporation;
16(3) general partnership;
17(4) limited partnership;
18(5) limited liability company;
19(6) unincorporated nonprofit association;
20(7) professional association; or
21(8) business trust, common law business trust or
22statutory trust.
23* * *
24"Filing association." A domestic or foreign association, the
25formation of which requires the filing of a public organic
26record. The term does not include a general partnership that is
27also:
28(1) a limited liability partnership; or
29(2) an electing partnership.
30"Filing entity." A domestic or foreign entity, the formation
1of which requires the filing of a public organic record. The
2term does not include a general partnership that is also:
3(1) a limited liability partnership; or
4(2) an electing partnership.
5"Foreign association." An association that is not a domestic
6association.
7* * *
8"Foreign entity." An entity that is not a domestic entity.
9"Foreign filing association." A foreign association, the
10formation of which requires the filing of a public organic
11record.
12"Fraternal benefit society." A fraternal benefit society as
13defined in section 2403 of the act of May 17, 1921 (P.L.682,
14No.284), known as The Insurance Company Law of 1921.
15"General partnership." A domestic or foreign partnership as
16defined in section 8311 (relating to partnership defined),
17whether or not it is a limited liability partnership or electing
18partnership.
19"Governance interest." A right under the organic law or
20organic rules of an association that is not a corporation for
21profit or not-for-profit, other than as a governor, agent,
22assignee or proxy, to:
23(1) receive or demand access to information concerning,
24or the books and records of, the association;
25(2) vote for the election of the governors of the
26association; or
27(3) receive notice of or vote on an issue involving the
28internal affairs of the association.
29"Governor." A person by or under whose authority the powers
30of an association are exercised and under whose direction the
1activities and affairs of the association are managed pursuant
2to the organic law and organic rules of the association. The
3term includes:
4(1) A director of a corporation for profit or a
5shareholder of a statutory close corporation that is deemed
6to be a director under section 2332(a) (relating to
7management by shareholders).
8(2) A director or member of an other body of a
9corporation not-for-profit.
10(3) A partner of a general partnership.
11(4) A general partner of a limited partnership.
12(5) A general partner of an electing partnership.
13(6) A manager of a manager-managed limited liability
14company or a member that has the right to participate
15materially in the management of a member-managed limited
16liability company.
17(7) A manager of an unincorporated nonprofit
18association.
19(8) A member of the board of governors of a professional
20association.
21(9) A trustee of a business trust, common law business
22trust or statutory trust.
23"Health maintenance organization." An entity that is subject
24to the act of December 29, 1972 (P.L.1701, No.364), known as the
25Health Maintenance Organization Act.
26"Hospital plan corporation." A hospital plan corporation as
27defined in 40 Pa.C.S. § 6101 (relating to definitions).
28* * *
29"Interest." A share in a corporation for profit, a
30membership or share in a corporation not-for-profit, a
1governance interest or a distributional interest. The term
2includes the following:
3(1) A governance interest or transferable interest in a
4general partnership.
5(2) A governance interest or transferable interest in a
6limited partnership.
7(3) A governance interest or transferable interest in a
8limited liability company.
9(4) A membership in an unincorporated nonprofit
10association.
11(5) An ownership interest in a professional association.
12(6) A beneficial interest in a business trust, common-
13law business trust or statutory trust.
14"Interest holder." A direct or record holder of an interest.
15The term includes the following:
16(1) A shareholder of a corporation for profit.
17(2) A member or shareholder of a corporation not-for-
18profit.
19(3) A partner or transferee in a general partnership.
20(4) A general or limited partner or transferee in a
21limited partnership.
22(5) A member or transferee in a limited liability
23company.
24(6) A member of an unincorporated nonprofit association.
25(7) An associate in a professional association.
26(8) A beneficiary or beneficial owner of record of a
27business trust, common-law business trust or statutory trust.
28* * *
29"Jurisdiction." When used to refer to a political entity,
30the United States, a state, a foreign country or a political
1subdivision of a foreign country.
2"Jurisdiction of formation." The jurisdiction whose law
3includes the organic law of an association.
4* * *
5"Limited liability limited partnership." A domestic or
6foreign limited partnership for which there is in effect:
7(1) a statement of registration under Chapter 82
8(relating to registered limited liability partnerships);
9(2) a provision of its certificate of limited
10partnership electing to be subject to Chapter 82; or
11(3) a similar filing or provision under the organic law
12of a foreign partnership.
13"Limited liability partnership." A domestic or foreign
14general partnership for which there is in effect:
15(1) a statement of registration under Chapter 82
16(relating to registered limited liability partnerships); or
17(2) a similar filing under the organic law of a foreign
18general partnership.
19"Limited partnership." A domestic or foreign limited
20partnership as defined in section 8503 (relating to definitions
21and index of definitions), whether or not it is a limited
22liability limited partnership or electing partnership.
23"Nonfiling association." An association that is not a filing
24association.
25"Nonprofit corporation." A domestic or foreign nonprofit
26corporation as defined in section 5103 (relating to
27definitions), whether or not it is a cooperative corporation.
28"Nonregistered foreign association." A foreign association
29that is not registered to do business in this Commonwealth
30pursuant to a filing with the department.
1* * *
2"Organic law." The law of the jurisdiction of formation of
3an association governing its internal affairs.
4"Organic rules." The public organic record and private
5organic rules of an association.
6"Principal office." The principal executive office of an
7association, whether or not the office is located in this
8Commonwealth.
9"Private organic rules." The rules that govern the internal
10affairs of an association, are binding on all its interest
11holders and are not part of its public organic record, if any.
12The term includes the following:
13(1) The bylaws of a corporation for profit.
14(2) The bylaws of a corporation not-for-profit.
15(3) The partnership agreement of a general partnership.
16(4) The partnership agreement of a limited partnership.
17(5) The operating agreement of a limited liability
18company.
19(6) The governing principles of an unincorporated
20nonprofit association.
21(7) The bylaws of a professional association.
22(8) The bylaws or similar rules, by whatever name they
23may be referred to, of a business trust, common-law business
24trust or statutory trust.
25* * *
26"Professional association." An association as defined in
27section 9302 (relating to application of chapter).
28"Professional health service corporation." A professional
29health service corporation as defined in 40 Pa.C.S. § 6302
30(relating to definitions).
1* * *
2"Property." All property, whether real, personal or mixed,
3or tangible or intangible, or any right or interest therein,
4including rights under contracts and other binding agreements.
5"Public organic record." The document the public filing of
6which by the department or a similar agency in another
7jurisdiction is required to form an association. The term
8includes <-any amendment or restatement of the document and
9includes the following:
10(1) The articles of incorporation of a corporation for
11profit.
12(2) The articles of incorporation of a corporation not-
13for-profit.
14(3) The certificate of limited partnership of a limited
15partnership.
16(4) The certificate of organization of a limited
17liability company.
18(5) The articles of association of a professional
19association.
20(6) The declaration of trust or other instrument of a
21business trust or statutory trust which has been filed by the
22department or a similar agency in another jurisdiction.
23"Receipt." Actual coming into possession.
24"Receive." To actually come into possession.
25* * *
26"Registered corporation." A corporation defined in section
272502 (relating to registered corporation status).
28"Registered foreign association." A foreign association that
29is registered to do business in this Commonwealth pursuant to a
30filing in the department.
1* * *
2["Savings association." An association as defined in section
3102(3) of the former act of December 14, 1967 (P.L.746, No.345),
4known as the Savings Association Code of 1967.]
5* * *
6"Transfer." Includes:
7(1) an assignment;
8(2) a conveyance;
9(3) a sale;
10(4) a lease;
11(5) an encumbrance, including a mortgage or security
12interest;
13(6) a gift; and
14(7) a transfer by operation of law.
15"Type." When used with respect to an association, a generic
16form:
17(1) recognized at common law; or
18(2) organized under an organic law, whether or not some
19associations organized under that organic law are subject to
20provisions of that law which create different categories of
21the form of association.
22"Unincorporated nonprofit association." A nonprofit
23association as defined in section 9112 (relating to
24definitions).
25* * *
26(b) Application of definitions.--The words and phrases
27defined in subsection (a) shall have the same meanings when used
28in 54 Pa.C.S. (relating to names) except to the extent those
29meanings are inconsistent with the provisions of that title.
30Section 1.2<- 1.3. Section 109(b) of Title 15 is amended to
1read:
2§ 109. Name of commercial registered office provider in lieu of
3registered address.
4* * *
5(b) Statement of address of commercial registered office.--A
6domestic [business corporation or qualified foreign business
7corporation, partnership or other] or registered foreign
8association engaged in the business of maintaining registered
9offices in this Commonwealth for corporations or other
10associations may file in the department a statement of address
11of commercial registered office executed by the representing
12association or a division thereof and setting forth:
13(1) The name of the representing association.
14(2) The form of organization of the representing
15association.
16(3) A statement that it is in the business of
17maintaining registered offices in this Commonwealth for
18corporations or other associations.
19(4) The address, including street and number, if any, of
20a place of business of the representing association in this
21Commonwealth to which communications and other matters
22directed to each person represented by it may be delivered.
23* * *
24Section 2. Title 15 is amended by adding sections to read:
25§ 112. Receipt of electronic communications.
26(a) Requirements.--Unless otherwise provided in the organic
27rules of an entity or otherwise agreed between the sender and
28the recipient, an electronic communication is received when it:
29(1) enters an information processing system that the
30recipient has designated or uses for the purpose of receiving
1electronic records or information of the type sent and from
2which the recipient is able to retrieve the electronic
3record; and
4(2) is in a form capable of being processed by that
5system.
6(b) Awareness not required.--An electronic communication is
7received under subsection (a) even if no individual is aware of
8its receipt.
9(c) Presumption.--Receipt of an electronic acknowledgment
10from an information processing system described in subsection
11(a) establishes that a communication was received but, by
12itself, does not establish that the content sent corresponds to
13the content received.
14§ 113. Delivery of document.
15(a) Permissible means.--Permissible means of delivery of a
16document in record form include:
17(1) personal delivery;
18(2) mail;
19(3) conventional commercial practice; and
20(4) electronic transmission.
21(b) Delivery to department.--Delivery to the department of a
22document in record form is effective only on receipt by the
23department.
24(c) Delivery by department.--Except as provided by law other
25than this title, the department may deliver a document in record
26form to a person by delivering it:
27(1) in person to the person that submitted it for
28filing;
29(2) to the address of the person's registered office;
30(3) to the principal office address of the person; or
1(4) to another address the person provides to the
2department for delivery.
<-3Section 2.1. Section 133(a)(3) of Title 15 is amended by
4adding a subparagraph to read:
5§ 133. Powers of Department of State.
6(a) General rule.--The department has the power and
7authority reasonably necessary to enable it to administer this
8subchapter efficiently and to perform the functions specified in
9section 132 (relating to functions of Department of State), in
1013 Pa.C.S. (relating to commercial code) and in 17 Pa.C.S.
11(relating to credit unions). The following shall not be agency
12regulations for the purposes of section 612 of the act of April
139, 1929 (P.L.177, No.175), known as The Administrative Code of
141929, the act of October 15, 1980 (P.L.950, No.164), known as
15the Commonwealth Attorneys Act, the act of June 25, 1982
16(P.L.633, No.181), known as the Regulatory Review Act, or any
17similar provision of law, but shall be subject to the
18opportunity of public comment requirement under section 201 of
19the act of July 31, 1968 (P.L.769, No.240), referred to as the
20Commonwealth Documents Law:
21* * *
22(3) Regulations, which the department is hereby
23authorized to promulgate, that:
24* * *
25(vi) Specify the symbols or characters which:
26(A) do not make a name distinguishable on the
27records of the department; or
28(B) may be used in the name of an entity.
29* * *
30Section 2.2. Section 135(e)(1) of Title 15 is amended to
1read:
2§ 135. Requirements to be met by filed documents.
3* * *
4(e) Distinguishable names.--A name shall not be considered
5distinguishable upon the records of the department from another
6name for purposes of this title and 54 Pa.C.S. (relating to
7names) solely because the names differ from each other in any or
8all of the following respects:
9(1) Use of punctuation marks and of symbols or
10characters specified by regulation of the department under
11section 133(a)(3)(vi) (relating to powers of department of
12State).
13* * *
14Section 3. Section 136(c) of Title 15 is amended and the
15section is amended by adding a subsection to read:
16§ 136. Processing of documents by Department of State.
17* * *
18(c) Effective date and time.--Except as otherwise provided
19in this title and subject to sections 138 (relating to statement
20of correction) and 141 (relating to withdrawal of filing before
21effectiveness), a document [shall become] filed by the
22department under a provision of this title is effective [upon
23the filing thereof in the department.]:
24(1) on the date and at the time of its delivery to the
25department;
26(2) on the date of delivery and at the time specified in
27the document as its effective time, if the time specified is
28later than the time under paragraph (1); or
29(3) at a specified delayed effective date and:
30(i) at a specified time; or
1(ii) if no time is specified, at 12:01 a.m. on the
2date specified.
3* * *
4(e) Redaction of information.--If law other than this title
5prohibits the disclosure by the department of information
6contained in a document in record form delivered to the
7department for filing, the department shall accept the document
8if it otherwise complies with this title but may redact the
9information.
10Section 3.1. Section 138 of Title 15 is amended to read:
11§ 138. Statement of correction.
12(a) Filing of statement.--Whenever any document authorized
13or required to be [filed in the Department of State] delivered
14to the department for filing by any provision of this title has
15been so filed and is an inaccurate record of the [corporate or
16other] action therein referred to or was defectively or
17erroneously executed, the document may be corrected by [filing
18in the department] delivering to the department for filing a
19statement of correction [of the document]. The statement of
20correction, except as provided in subsection (c), shall be
21[executed] signed by the association or other person that
22[effected the] delivered the inaccurate, defective or erroneous
23document for filing and shall set forth:
24(1) The name of the association or other person and,
25subject to section 109 (relating to name of commercial
26registered office provider in lieu of registered address),
27the location, including street and number, if any, of its
28registered or other office.
29(2) The statute by or under which the [corporation was
30incorporated] association was formed, or the preceding filing
1was made, in the case of a filing that does not constitute a
2part of the [articles of incorporation of a corporation]
3public organic record of an association.
4(3) The inaccuracy or defect to be corrected.
5(4) The portion of the document requiring correction in
6corrected form or, if the document was erroneously executed,
7a statement that the original document shall be deemed
8reexecuted or stricken from the records of the department, as
9the case may be.
10(b) Effect of filing.--
11(1) The corrected document shall be effective:
12(i) Upon filing in the department, as to those
13persons who are substantially and adversely affected by
14the correction.
15(ii) As of the date the original document was
16effective, as to all other persons.
17(2) A filing under this section shall not have the
18effect of causing [original articles of incorporation of a
19corporation or a similar type of document creating any other
20form of association] the original public organic record of an
21association to be stricken from the records of the department
22but the [articles or other document] public organic record
23may be corrected under this section.
24(c) Filing pursuant to court order.--If the association or
25other person refuses to [file] deliver to the department for
26filing an appropriate statement of correction under this section
27within ten business days after any person adversely affected has
28made a [written demand therefor] demand in record form for the
29correction, the affected person may apply to the court for an
30order to compel the filing. If the court finds that a document
1on file in the department is inaccurate [or defective],
2defective or erroneous, it may direct the association or other
3person who effected the inaccurate, defective or erroneous
4filing to [file] deliver to the department for filing an
5appropriate statement of correction [in the department], or it
6may order the clerk to execute the statement under the seal of
7the court and cause the statement to be [filed in the
8department] delivered to the department for filing. In the
9absence of fraud, an application may not be made to a court
10under this subsection with respect to a document more than one
11year after the date on which it was originally filed in the
12department.
13(d) Cross reference.--See section 135 (relating to
14requirements to be met by filed documents).
15Section 4. Section 139(a) of Title 15 is amended and the
16section is amended by adding a subsection to read:
17§ 139. Tax clearance of certain fundamental transactions.
18(a) [General rule] Requirement.--Except as provided in
19subsection (c) or (d), [a domestic association shall not file
20articles or a certificate of merger or consolidation effecting a
21merger or consolidation into a nonqualified foreign association
22or articles or a certificate of dissolution or a statement of
23revival, a qualified foreign association shall not file an
24application for termination of authority or similar document in
25the Department of State and a domestic association shall not
26file articles or a certificate of division dividing solely into
27nonqualified foreign associations unless the articles,
28certificate, application or other document are accompanied by]
29clearance certificates from the Department of Revenue and the
30[Office of Employment Security of the] Department of Labor and
1Industry, evidencing the payment by the association of all taxes
2and charges due the Commonwealth required by law[.] must be
3delivered to the department for filing when any of the following
4is delivered to the department for filing:
5(1) Articles or a statement or certificate of merger
6merging a domestic association into a nonregistered foreign
7association.
8(2) Articles or a statement or certificate of conversion
9or domestication effecting a conversion or domestication of a
10domestic association into a nonregistered foreign
11association.
12(3) Articles or a certificate of dissolution or a
13statement of revival of a domestic association.
14(4) An application for termination of registration or
15similar document by a registered foreign association.
16(5) Articles or a statement or certificate of division
17dividing a domestic association solely into foreign
18associations.
19* * *
20(d) Registration of foreign associations.--It shall not be
21necessary to deliver clearance certificates under subsection (a)
22if, simultaneously with the delivery of the articles, statement
23or certificate of merger, conversion, division or domestication:
24(1) the foreign association that is the surviving,
25converted or domesticated association registers to do
26business in this Commonwealth; or
27(2) at least one of the new foreign associations
28resulting from the division registers to do business in this
29Commonwealth.
30Section 5. Title 15 is amended by adding sections to read:
1§ 141. Withdrawal of filing before effectiveness.
2(a) General rule.--A document in record form delivered to
3the department for filing may be withdrawn before it takes
4effect by delivering to the department for filing a statement of
5withdrawal, except that a document that may be abandoned under
6any of the following sections may not be withdrawn under this
7section:
8Section 334 (relating to amendment or abandonment of plan
9of merger).
10Section 344 (relating to amendment or abandonment of plan
11of interest exchange).
12Section 354 (relating to amendment or abandonment of plan
13of conversion).
14Section 365 (relating to amendment or abandonment of plan
15of division).
16Section 374 (relating to amendment or abandonment of plan
17of domestication).
18(b) Requirements for statement of withdrawal.--A statement
19of withdrawal must:
20(1) be signed by a person with the authority to sign the
21statement; and
22(2) identify the document to be withdrawn.
23(c) Effect of statement of withdrawal.--Upon filing by the
24department of a statement of withdrawal, the action or
25transaction evidenced by the original document shall not take
26effect.
27§ 142. Effect of signing filings.
28(a) Affirmation of truth.--Signing a document delivered to
29the department for filing is an affirmation under the penalties
30provided in 18 Pa.C.S. § 4904 (relating to unsworn falsification
1to authorities) that the facts stated in the document are true
2in all material respects.
3(b) Signature by agent or legal representative.--A document
4filed under this title may be signed by an agent. If this title
5requires a particular individual to sign a document and the
6individual is deceased or incompetent, the document may be
7signed by a legal representative of the individual on behalf of
8the individual.
9(c) Affirmation of authority.--A person that signs a
10document delivered to the department for filing affirms as a
11fact that the person is authorized to sign the document.
12§ 143. Liability for inaccurate information in filing.
13If a document that is delivered to the department for filing
14under this title and filed by the department contains inaccurate
15information at the time of delivery to the department, a person
16that suffers a loss by reliance on the information may recover
17damages for the loss from a person that signed the <-record
<-18document or caused another to sign it on behalf of the person
19and knew at the time the <-record document was delivered that the
20information was inaccurate.
21§ 144. Signing and filing pursuant to judicial order.
22(a) Petition.--If a person required by this title to sign a
23document or deliver a document to the department for filing
24under this title does not do so, another person that is
25aggrieved may petition the court to order:
26(1) the person to sign the document;
27(2) the person to deliver the document to the department
28for filing; or
29(3) the department to file the document unsigned.
30(b) Association.--If a petitioner under subsection (a) is
1not the association to which the document pertains, the
2petitioner shall make the association a party to the action.
3(c) Effect.--A record filed under subsection (a)(3) is
4effective without being signed.
5§ 145. Subsistence certificate.
6(a) General rule.--On request of a person, the department
7shall issue:
8(1) a subsistence certificate for a domestic filing
9entity or domestic limited liability partnership; or
10(2) a certificate of registration for a registered
11foreign association.
12(b) Contents of certificate.--A certificate under subsection
13(a) must state:
14(1) the name of the domestic filing entity or domestic
15limited liability partnership or the name under which the
16registered foreign association is registered in this
17Commonwealth.
18(2) in the case of a domestic filing entity or domestic
19limited liability partnership, that the entity is currently
20subsisting on the records of the department; and
21(3) in the case of a registered foreign association,
22that it is registered to do business in this Commonwealth.
23(c) Effect of certificate.--Subject to any qualification
24stated in the certificate, a certificate issued by the
25department under subsection (a) may be relied on as conclusive
26evidence of the facts stated in the certificate.
<-27Section 5.1. Paragraph (6) of the definition of "ancillary
28transaction" in section 152 of Title 15 is amended and the
29definition is amended by adding a paragraph to read:
30§ 152. Definitions.
1The following words and phrases when used in this subchapter
2shall have the meanings given to them in this section unless the
3context clearly indicates otherwise:
4"Ancillary transaction." Includes:
5* * *
6(6) any transaction similar to any item listed in
7paragraphs (1) through (5); [or]
8(6.1) withdrawal, abandonment or termination of a
9document which has been delivered to the department for
10filing but has not yet become effective; or
11* * *
12Section 6. Section 153(a) of Title 15 is amended to read:
13§ 153. Fee schedule.
14(a) General rule.--The nonrefundable fees of the bureau,
15including fees for the public acts and transactions of the
16Secretary of the Commonwealth administered through the bureau,
17shall be as follows:
18[(1) Domestic corporations: |
| |||||
19(i) Articles of incorporation, letters |
$125 | |||||
22(ii) Articles or agreement or similar |
70 | |||||
24(iii) Additional fee for each association |
40 | |||||
26(iv) Additional fee for each new association |
125 | |||||
28(v) Articles of conversion or a similar |
70 | |||||
30(vi) Each ancillary transaction............. | 70 | |||||
1(2) Foreign corporations: |
| |||||
2(i) Certificates of authority or similar |
250 |
4(ii) Amended certificate of authority or |
250 |
6(iii) Domestication......................... | 125 |
7(iv) Statement of merger or consolidation or |
70 |
11(v) Additional fee for each qualified |
40 |
14(vi) Each ancillary transaction............. | 70 |
15(3) Partnerships and limited liability companies: |
|
16(i) Certificate of limited partnership or |
125 |
21(ii) Certificate of merger, consolidation or |
70 |
23(iii) Additional fee for each association |
40 |
25(iv) Additional fee for each new association |
125 |
27(v) Application for registration of foreign |
250 |
29(vi) Certificate of amendment of
1limited liability company........................ |
250 |
2(vii) Statement of registration of |
125 |
5(viii) Domestication of foreign limited |
125 |
7(ix) Each ancillary transaction............. | 70 |
8(4) Unincorporated nonprofit associations: |
|
9(i) Statement appointing an agent to receive |
70 |
11(ii) Resignation of appointed agent.......... | 40 |
12(iii) Amendment or cancellation of statement |
70 |
14(5) Business trusts: |
|
15(i) Deed of trust or other initial |
125 |
18(ii) Each ancillary transaction.............. | 70 |
19(6) Fictitious names: |
|
20(i) Registration............................ | 70 |
21(ii) Each ancillary transaction............. | 70 |
22(7) Service of process: |
|
23(i) Each defendant named or served.......... | 70 |
24(ii) (Reserved)............................. |
|
25(8) Trademarks, emblems, union labels, |
|
27(i) Trademark registration.................. | 50 | |||||
28(ii) Each ancillary trademark transaction... | 50 | |||||
29(iii) Any other registration under this |
70 | |||||
1(iv) Any other ancillary transaction under |
70 | |||||
3(9) Uniform Commercial Code: As provided in 13 |
|
5(10) Copy fees, including copies furnished under |
|
7(i) Each page of photocopy furnished........ | 3 |
8(ii) (Reserved)............................. |
|
9(11) Certification fees: |
|
10(i) For certifying copies of any document or |
40 |
13(ii) (Reserved)............................. |
|
14(iii) For issuing any other certificate of |
40 |
17(12) Report of record search other than a search 18under paragraph (9): |
|
19(i) For preparing and providing a report of |
15 |
22(ii) (Reserved)............................. |
|
23(13) Reservation and registration of names: |
|
24(i) Reservation of association name......... | 70 |
25(ii) Registration of foreign or other |
70 |
27(14) Change of registered office or address: |
|
28(i) Each statement of change of registered |
5 |
30(ii) Each statement or certificate of change
1of registered office............................. |
5 |
2(iii) Each statement of change of address... | 5 |
3(15) Contingent domestication: |
|
4(i) Statement of contingent domestication... | 125 |
5(ii) Each year, or portion of a year, during |
1,500 |
8(16) Expedited service: |
|
9(i) For the processing of any filing under |
1,000 |
14(ii) For the processing of any filing under 19................................................. |
300 |
20(iii) For processing of any filing under |
100] |
24(1) Domestic corporations: |
| |||||
25(i) Articles of incorporation, letters patent |
$125 | |||||
27(ii) Each ancillary transaction.............. | 70 | |||||
28(2) Foreign associations: |
| |||||
29(i) Registration statement or similar |
250 | |||||
1(ii) Amendment of registration statement or |
250 | |||||
3(iii) Domestication of alien association |
250 | |||||
6(iv) Statement of merger, division or |
70 | |||||
10(v) Additional fee for each qualified foreign |
40 | |||||
13(vi) Each ancillary transaction.............. | 70 | |||||
14(3) Partnerships and limited liability companies: |
| |||||
15(i) Certificate of limited partnership or |
125 | |||||
18(ii) Statement of registration of registered |
125 | |||||
21(iii) Each ancillary transaction............. | 70 | |||||
22(4) Unincorporated nonprofit associations: |
| |||||
23(i) Statement appointing an agent to receive |
70 | |||||
25(ii) Resignation of appointed agent.......... | 40 | |||||
26(iii) Amendment or cancellation of statement |
70 | |||||
28(5) Business trusts: |
| |||||
29(i) Declaration of trust or other initial |
125 | |||||
1(ii) Each ancillary transaction.............. | 70 | |||||
2(6) Fictitious names: |
| |||||
3(i) Registration............................. | 70 | |||||
4(ii) Each ancillary transaction.............. | 70 | |||||
5(7) Service of process: |
| |||||
6(i) Each defendant named or served........... | 70 | |||||
7(ii) (Reserved). |
| |||||
8(8) Trademarks, emblems, union labels, |
| |||||
10(i) Trademark registration................... | 50 | |||||
11(ii) Each ancillary trademark transaction.... | 50 | |||||
12(iii) Another registration under this |
70 | |||||
14(iv) Another ancillary transaction under this |
70 | |||||
16(9) Uniform Commercial Code: |
| |||||
| ||||||
19(ii) (Reserved). |
| |||||
20(10) Copy fees, including copies furnished under |
| |||||
22(i) Each page of photocopy<- furnished......... | 3 | |||||
23(ii) (Reserved). |
| |||||
24(11) Certification fees: |
| |||||
25(i) For certifying copies of a document or |
40 | |||||
28(ii) (Reserved). |
| |||||
29(iii) For issuing any other certificate of
1department, other than an engrossed certificate... |
40 | |||||
2(iv) For preparing and issuing an engrossed |
125 | |||||
4(12) Report of record search other than a search |
| |||||
6(i) For preparing and providing a report of a |
15 | |||||
9(ii) (Reserved). |
| |||||
10(13) Reservation and registration of names: |
| |||||
11(i) Reservation of association name.......... | 70 | |||||
12(ii) Registration of foreign association name | 70 | |||||
13(14) Change of registered office or address: |
| |||||
14(i) Each statement of change of registered |
5 | |||||
16(ii) Each statement or certificate of change |
5 | |||||
18(iii) Each statement of change of address.... | 5 | |||||
19(15) Expedited service: |
| |||||
20(i) For the processing of a filing under this |
1,000 | |||||
25(ii) For the processing of a filing under |
300 | |||||
29(iii) For processing of a filing under this
1bureau before 10 a.m. and is requested to be |
100 | |||||
3(16) Entity transactions: |
| |||||
4(i) Statement of merger, interest exchange, |
70 | |||||
6(ii) Additional fee for each association that |
40 | |||||
8(iii) Additional fee for each new association |
125 | |||||
10(iv) Each ancillary transaction.............. | 70 | |||||
<-11(17) Special processing fees: |
| |||||
12(i) Request that multiple documents delivered |
70 | |||||
15(ii) (Reserved). |
| |||||
16* * *
17Section 7. Subchapter D heading of Chapter 1 of Title 15 is
18amended to read:
19SUBCHAPTER D
20[DEFINITIVE AND CONTINGENT] DOMESTICATION
21OF CERTAIN ALIEN ASSOCIATIONS
22Section 8. Section 161(b) introductory paragraph, (1) and
23(5), (e) and (f) of Title 15 are amended to read:
24§ 161. Domestication of certain alien associations.
25* * *
26(b) Statement of domestication.--The statement of
27domestication shall be [executed] signed by the association and
28shall set forth in the English language:
29(1) The name of the association. If the name is in a
30foreign language, it shall be set forth in Roman letters or
1characters or Arabic or Roman numerals. If the name is one
2that is rendered unavailable for use by a [corporation by any
3provision of section 1303(b) or (c) (relating to corporate
4name)] domestic entity by section 202(b) or (c) (relating to
5requirements for names generally), the association shall
6adopt a new name, in accordance with any procedures for
7changing the name of the association that are applicable
8prior to the domestication of the association, and shall set
9forth the new name in the statement.
10* * *
11(5) A statement that the filing of the statement of
12domestication and, if desired, the renunciation of the prior
13domicile has been authorized (unless its [charter or other
14organic documents] organic rules require a greater vote) by a
15majority in interest of the [shareholders, members or other
16proprietors] interest holders of the association.
17* * *
18(e) Exclusion.--An association that can be domesticated
19under [any of the following sections shall not be domesticated
20under this section:
21Section 4161 (relating to domestication).
22Section 6161 (relating to domestication).
23Section 8590 (relating to domestication).
24Section 8982 (relating to domestication).
25Section 9501(a)(1)(ii) (relating to application and effect of
26chapter)] Subchapter G of Chapter 3 (relating to domestication)
27shall not be domesticated under this section.
28(f) Definition.--As used in this section, the term
29"association," except as restricted by subsection (e), includes
30any [alien] incorporated organization, private law corporation
1(whether or not organized for business purposes), public law
2corporation, partnership, proprietorship, joint venture,
3foundation, trust, association or similar organization or entity
4existing under the laws of any jurisdiction other than this
5Commonwealth.
6* * *
7Section 8.1. Section 162 of Title 15 is repealed:
8[§ 162. Contingent domestication of certain alien associations.
9(a) General rule.--Any association as defined in subsection
10(i) may become a contingent domestic association by filing in
11the Department of State a statement of contingent domestication.
12The statement of contingent domestication and all papers and
13information relating thereto shall remain confidential and shall
14not be available for public inspection until and unless the
15association files a statement of consummation of domestication
16as provided in subsection (c).
17(b) Statement of contingent domestication.--The statement of
18contingent domestication shall be executed by the association
19and shall set forth in the English language:
20(1) In the case of:
21(i) a corporation subject to section 4161 (relating
22to domestication), the statements required to be set
23forth in articles of domestication (except the statement
24required by section 4161(b)(6));
25(ii) a corporation subject to section 6161 (relating
26to domestication), the statements required to be set
27forth in articles of domestication (except the statement
28required by section 6161(b)(6));
29(iii) a limited partnership subject to section 8590
30(relating to domestication), the statements required to
1be set forth in a certificate of domestication (except
2the statement required by section 8590(b)(5));
3(iv) a limited liability company subject to section
48982 (relating to domestication), the statements required
5to be set forth in a certificate of domestication (except
6the statement required by section 8982(b)(5));or
7(v) any other association, the statements required
8by section 161(b) (relating to statement of
9domestication) to be set forth in a statement of
10domestication (except the statement required by section
11161(b)(5)).
12(2) A statement that the effectiveness of the statement
13is contingent upon the subsequent filing of a statement of
14consummation of domestication.
15(3) A statement that the filing of the statement of
16contingent domestication and the delegation of authority to
17file a statement of consummation of domestication has been
18authorized (unless its charter or other organic documents
19require a greater vote):
20(i) by a majority vote of the votes cast by all
21shareholders entitled to vote thereon and, if any class
22of shares is entitled to vote thereon as a class, a
23majority of the votes cast in each class vote, in the
24case of a corporation subject to section 4161;
25(ii) by a majority vote of the votes cast by all
26members, if any, entitled to vote thereon and, if any
27class of members is entitled to vote thereon as a class,
28a majority of the votes cast in each class vote, in the
29case of a corporation subject to section 6161;
30(iii) by a majority vote of the votes cast by all
1partners entitled to vote thereon and, if any class of
2partners is entitled to vote thereon as a class, a
3majority of the votes cast in each class vote, in the
4case of a limited partnership subject to section 8590;
5(iv) by a majority vote of the votes cast by all
6members entitled to vote thereon and, if any class of
7members is entitled to vote thereon as a class, a
8majority of the votes cast in each class vote, in the
9case of a limited liability company subject to section
108982; or
11(v) by a majority in interest of the shareholders,
12members or other proprietors of the association in any
13other case.
14(c) Statement of consummation of domestication.--At any time
15after the filing of a statement of contingent domestication, the
16association may file in the department a statement of
17consummation of domestication which shall be executed by the
18association and shall set forth:
19(1) The name of the association as set forth in its
20statement of contingent domestication.
21(2) A statement that either:
22(i) an emergency condition exists in the
23jurisdiction the law of which governs the internal
24affairs of the association and that in the judgment of
25the management of the association a temporary transfer of
26the domicile of the association to this Commonwealth is
27warranted by the circumstances; or
28(ii) an event has occurred that, under the law of
29the jurisdiction governing the internal affairs of the
30association, permits the association to transfer its
1domicile.
2(d) Statement of termination of domestication.--At any time
3after the filing of a statement of consummation of
4domestication, the association may file in the department a
5statement of termination of domestication which shall be
6executed by the association and shall set forth:
7(1) The name of the association in the form set forth in
8the prior filings under this section.
9(2) If a statement of consummation of domestication has
10theretofore been filed and is then in effect, a statement
11that the association elects to terminate its domicile in this
12Commonwealth.
13(3) A statement that either:
14(i) the statement of contingent domestication is
15reinstated pending the filing in the department of a new
16statement of consummation of domestication; or
17(ii) the statement of contingent domestication is
18withdrawn.
19(e) Execution of filings.--All documents filed under this
20section shall be signed on behalf of the association by any
21authorized person.
22(f) Effect of filing statement of consummation of
23domestication.--Upon the filing of a statement of consummation
24of domestication, and until the filing of a statement of
25termination of domestication, the association shall have the
26status under the law of this Commonwealth of:
27(1) a business corporation domesticated under section
284161, in the case of a corporation subject to that section;
29(2) a nonprofit corporation domesticated under section
306161, in the case of a corporation subject to that section;
1(3) a limited partnership domesticated under section
28590, in the case of a limited partnership subject to that
3section;
4(4) a limited liability company domesticated under
5section 8982, in the case of a limited liability company
6subject to that section; or
7(5) an association domesticated under section 161, in
8any other case.
9(g) Effect of filing a statement of termination of
10domestication.--Upon the filing of a statement of termination of
11domestication, the association shall under the law of this
12Commonwealth revert to the status it held prior to the filing
13of:
14(1) the statement of consummation of domestication, if
15the statement of termination of domestication states that the
16statement of contingent domestication is reinstated; or
17(2) the statement of contingent domestication, if the
18statement of termination of domestication states that the
19statement of contingent domestication is withdrawn.
20(h) Annual renewal.--A renewal application may be filed
21between October 1 and December 31 in each year and shall extend
22the applicability of this section for the following calendar
23year. Otherwise the association shall not be entitled to any of
24the benefits of this section. See section 153(a)(14) (relating
25to contingent domestication).
26(i) Definition.--As used in this section, the term
27"association" includes any incorporated organization, private
28law corporation (whether or not organized for business
29purposes), public law corporation, partnership, proprietorship,
30joint venture, foundation, trust, association or similar
1organization or entity if such association or entity immediately
2prior to effecting an initial filing under this section is an
3association or entity governed by the law of any jurisdiction
4other than the United States or any state, Puerto Rico or any
5possession or territory of the United States.
6(j) Cross references.--See sections 134 (relating to
7docketing statement) and 135 (relating to requirements to be met
8by filed documents).]
9Section 9. Title 15 is amended by adding chapters to read:
10CHAPTER 2
11ENTITIES GENERALLY
12Subchapter
13A. Names
14B. (Reserved)
15SUBCHAPTER A
16NAMES
17Sec.
18201. Definitions.
19202. Requirements for names generally.
20203. Corporation names.
21204. Partnership and limited liability company names.
22205. Business trust names.
23206. Requirements for foreign association names.
24207. Required name changes by senior associations.
25208. Reservation of name.
26209. Registration of name of nonregistered foreign association.
27§ 201. Definitions.
28The following words and phrases when used in this subchapter
29shall have the meanings given to them in this section unless the
30context clearly indicates otherwise:
1"Covered association." Any of the following:
2(1) a domestic filing entity;
3(2) a domestic limited liability partnership;
4(3) an electing partnership; or
5(4) a registered foreign association.
6"Proper name." The name set forth in:
7(1) the public organic record of a domestic filing
8association;
9(2) the statement of registration of a limited liability
10partnership;
11(3) the statement of election of an electing
12partnership; or
13(4) the statement of registration of a registered
14foreign association under section 412(a)(1)(i) (relating to
15foreign registration statement) or, if that name does not
16comply with this section, the name set forth in the statement
17under section 412(a)(1)(ii).
18§ 202. Requirements for names generally.
19(a) General rule.--The proper name of a covered association
20may be in any language, but it must be expressed in Roman
21letters or characters or, Arabic or Roman numerals <-or symbols or
22characters specified by regulation of the department under
23section 133(a)(3)(vi) (relating to powers of Department of
24State).
25(b) Duplicate use of names.--Except as provided in
26subsection (f), the proper name of a covered association must be
27distinguishable on the records of the department from the
28following:
29(1) The proper name of another covered association or
30the name of an association registered at any time under 54
1Pa.C.S. Ch. 5 (relating to corporate and other association
2names), unless the covered association or other association
3has:
4(i) stated that it is about to change its name, is
5about to cease to do business, is being wound up or is a
6foreign association about to withdraw from doing business
7in this Commonwealth, and the statement and a consent to
8the adoption of the name are delivered to the department
9for filing;
10(ii) filed a tax return or certificate with the
11Department of Revenue indicating that the covered
12association or other association is out of existence or
13has failed for a period of three successive years to file
14with the Department of Revenue a report or return
15required by law and the fact of the failure has been
16certified by the Department of Revenue to the Department
17of State;
18(iii) abandoned its name under the laws of its
19jurisdiction of formation, by amendment, merger,
20consolidation, division, expiration, dissolution or
21otherwise, without its name being adopted by a successor,
22and an official record of that fact, certified as
23provided under 42 Pa.C.S. § 5328 (relating to proof of
24official records), is presented by a person to the
25department; or
26(iv) had the registration of its name under 54
27Pa.C.S. Ch. 5 terminated.
28(2) A name that has been reserved or registered pursuant
29to section 208 (relating to reservation of name) or 209
30(relating to registration of name of nonregistered foreign
1association). A name shall be rendered unavailable for use
2under this subchapter by reason of the filing by the
3department of an assumed or fictitious name registration
4under 54 Pa.C.S. Ch. 3 (relating to fictitious names) only to
5the extent expressly provided in 54 Pa.C.S. Ch. 3.
6(c) Required approvals or conditions.--
7(1) The proper name of a covered association shall not
8imply that the association is:
9(i) A governmental agency of the Commonwealth or of
10the United States.
11(ii) A bank, bank and trust company, savings bank,
12private bank or trust company, as defined in the act of
13November 30, 1965 (P.L.847, No.356), known as the Banking
14Code of 1965, unless:
15(A) The association is a Pennsylvania bank
16holding company or is otherwise authorized by statute
17to use its name.
18(B) The association is a nonprofit corporation
19holding property in trust under section 5547
20(relating to authority to take and hold trust
21property) and has been converted from a trust company
22under Subchapter E of Chapter 3 (relating to
23conversion). The preceding sentence controls over
24section 805(b) of the Banking Code of 1965.
25(iii) An insurance company, nor contain any of the
26words "annuity," "assurance," "beneficial," "bond,"
27"casualty," "endowment," "fidelity," "fraternal,"
28"guaranty," "indemnity," "insurance," "insurer,"
29"reassurance," "reinsurance," "surety" or "title" when
30used in a manner as to imply that the association is
1engaged in the business of writing insurance or
2reinsurance as principal or any other words of like
3purport unless it is duly licensed as an insurance
4company by its jurisdiction of formation or the Insurance
5Department certifies that it has no objection to the use
6by the association or proposed association of the
7designation. The proper name of a domestic insurance
8company shall:
9(A) contain the word "mutual" only if it is a
10mutual insurance company; and
11(B) clearly designate the object and purpose of
12the association.
13(iv) A public utility furnishing electric or gas
14service to the public, unless the association or proposed
15association has as an express purpose the furnishing of
16service subject to the jurisdiction of the Pennsylvania
17Public Utility Commission or the Federal Energy
18Regulatory Commission.
19(v) A credit union. See 17 Pa.C.S. § 104 (relating
20to prohibition on use of words "credit union").
21(2) The proper name of a covered association shall not
22contain:
23(i) The word "college," "university" or "seminary"
24when used in a manner as to imply that it is an
25educational institution conforming to the standards and
26qualifications prescribed by the State Board of
27Education, unless there is submitted a certificate from
28the Department of Education certifying that the
29association or proposed association is entitled to use
30that designation.
1(ii) Words that constitute blasphemy, profane
2cursing or swearing or that profane the Lord's name.
3(iii) The words "engineer" or "engineering,"
4"surveyor" or "surveying" or any other word implying that
5any form of the practice of engineering or surveying as
6defined in the act of May 23, 1945 (P.L.913, No.367),
7known as the Engineer, Land Surveyor and Geologist
8Registration Law, is provided unless at least one of the
9individuals signing the initial public organic record of
10the association or one of the governors of the existing
11association has been properly registered with the State
12Registration Board for Professional Engineers in the
13practice of engineering or surveying and there is
14submitted to the department a certificate from the board
15to that effect.
16(iv) The words "architect" or "architecture" or any
17other word implying that any form of the practice of
18architecture as defined in the act of December 14, 1982
19(P.L.1227, No.281), known as the Architects Licensure
20Law, is provided unless at least one of the individuals
21signing the initial public organic record of the
22association or one of the governors of the existing
23association has been properly registered with the
24Architects Licensure Board in the practice of
25architecture and there is submitted to the department a
26certificate from the board to that effect.
27(v) The word "cooperative" or an abbreviation
28thereof unless the corporation is a cooperative
29corporation.
30(vi) Any other words prohibited by law. See section
1103 (relating to subordination of title to regulatory
2laws).
3(d) Other rights unaffected.--This section shall not
4abrogate or limit the law as to unfair competition or unfair
5practices nor derogate from the common law, the principles of
6equity or the provisions of 54 Pa.C.S. (relating to names) with
7respect to the right to acquire and protect trade names.
8(e) Remedies for violation of section.--The use of a name in
9violation of this section shall not vitiate or otherwise affect
10the existence or any acts of an association, but a court having
11jurisdiction may enjoin the association from using or continuing
12to use a name in violation of this section on the application
13of:
14(1) the Attorney General, acting on his or her own
15motion or at the instance of an administrative department,
16board or commission of this Commonwealth; or
17(2) a person adversely affected.
18(f) Court-ordered use of name.--Subsection (b) shall not
19apply if an association delivers to the department for filing a
20certified copy of a final judgment of a court of competent
21jurisdiction establishing the right of the association to use a
22name in this Commonwealth.
23§ 203. Corporation names.
24(a) Business corporations.--The proper name of a domestic or
25registered foreign business corporation must contain:
26(1) the word "corporation," "company," "incorporated" or
27"limited" or an abbreviation of any of the terms;
28(2) the word "association," "fund" or "syndicate"; or
29(3) words or abbreviations of like import used in a
30jurisdiction other than this Commonwealth.
1(b) Nonprofit corporations.--The proper name of a domestic
2nonprofit corporation or registered foreign corporation not-for-
3profit shall not be required to contain one of the words or
4abbreviations described under subsection (a).
5§ 204. Partnership and limited liability company names.
6(a) Limited liability partnerships.--The proper name of a
7domestic limited liability partnership or registered foreign
8limited liability partnership must contain the term "company,"
9"limited" or "limited liability partnership," or an abbreviation
10of one of those terms, or words or abbreviations of like import
11used in a jurisdiction other than this Commonwealth.
12(b) Limited partnerships.--The proper name of a domestic or
13registered foreign limited partnership:
14(1) shall not be required to contain a word or
15abbreviation indicating that it is a limited partnership;
16(2) if it is a limited liability limited partnership,
17must contain:
18(i) the term "company," "limited" or "limited
19liability limited partnership" or a term of like import;
20or
21(ii) an abbreviation of a term under subparagraph
22(i); and
23(3) may contain the name of a partner.
24(c) Limited liability companies.--The proper name of a
25domestic limited liability company or registered foreign limited
26liability company must contain the term "company," "limited" or
27"limited liability company," or an abbreviation of one of those
28terms, or words or abbreviations of like import used in a
29jurisdiction other than this Commonwealth.
30§ 205. Business trust names.
1The proper name of a domestic business trust or registered
2foreign business trust shall not be required to contain a word
3or abbreviation indicating that it is a business trust.
4§ 206. Requirements for foreign association names.
5(a) General rule.--The department shall not file a
6registration statement pursuant to section 412 (relating to
7foreign registration statement) for a foreign association that,
8except as provided under subsection (b), has a name that is
9rendered unavailable for use by a covered association under
10section 202(a), (b) or (c)(1)(i), (iii), (iv) or (v) or (2)
11(relating to requirements for names generally).
12(b) Exception.--The provisions of section 202(b) and (c)
13shall not prevent the filing of a registration statement of a
14foreign association setting forth a name that is prohibited by
15section 202(b) and (c) if the foreign association delivers to
16the department for filing a resolution of its governors adopting
17a name for use in registering to do business in this
18Commonwealth that is available for use by a covered association.
19§ 207. Required name changes by senior associations.
20(a) Loss of rights to name.--A covered association shall
21cease to have the exclusive right to its proper name if the
22association:
23(1) has failed to file in the Department of Revenue a
24report or a return required by law;
25(2) has filed in the Department of Revenue a tax return
26or certificate indicating that it is out of existence; or
27(3) has failed to file the most recent required
28decennial filing under 54 Pa.C.S. § 503 (relating to
29decennial filings required).
30(b) Adoption of new name on reactivation.--Upon the removal
1of the reason why a covered association has lost the exclusive
2right to its proper name under subsection (a), the association
3shall make inquiry with the Department of State with regard to
4the availability of its name and, if the name has been
5appropriated by another person, the covered association shall
6adopt a new name in accordance with law before resuming its
7activities.
8(c) Enforcement of undertaking to release name.--If a
9covered association has used a name that is not distinguishable
10on the records of the Department of State from the name of
11another association as permitted by section 202(b)(1) (relating
12to requirements for names generally) and the other association
13continues to use its name in this Commonwealth and does not
14change its name, cease to do business, be wound up or withdraw
15as it proposed to do in its consent or change its name as
16required by subsection (a), any court having jurisdiction may
17enjoin the other association from continuing to use its name or
18a name that is not distinguishable therefrom on the application
19of:
20(1) the Attorney General, acting on his or her own
21motion or at the instance of an administrative department,
22board or commission of this Commonwealth; or
23(2) any person adversely affected.
24§ 208. Reservation of name.
25(a) General rule.--The exclusive right to the use of a name
26may be reserved by any person. The reservation shall be made by
27delivering to the department an application to reserve a
28specified name, signed by the applicant. If the department finds
29that the name is available for use, it shall reserve the name
30for the exclusive use of the applicant for a period of 120 days.
1(b) Transfer of reservation.--The right to exclusive use of
2a name reserved pursuant to subsection (a) may be transferred to
3any other person by delivering to the department a notice in
4record form of the transfer, signed by the person who reserved
5the name, and specifying the name and address of the other
6person.
7(c) Cross references.--See:
8Section 134 (relating to docketing statement).
9Section 135 (relating to requirements to be met by filed
10documents).
11Section 209 (relating to registration of name of
12nonregistered foreign association).
13§ 209. Registration of name of nonregistered foreign
14association.
15(a) General rule.--A nonregistered foreign association may
16register its name under 54 Pa.C.S. Ch. 5 (relating to corporate
17and other association names) if the name is available for use by
18a registered foreign association pursuant to section 206
19(relating to requirements for foreign association names) by
20delivering to the department for filing an application for
21registration of name, signed by the association, setting forth:
22(1) The name of the association.
23(2) The address, including street and number, if any, of
24the principal office of the association.
25(b) Annual renewal.--An association that has in effect a
26registration of its name may renew the registration from year to
27year by annually delivering to the department for filing an
28application for renewal setting forth the facts required to be
29set forth in an original application for registration. A renewal
30application may be filed between October 1 and December 31 in
1each year and shall extend the registration for the following
2calendar year.
3(c) Use of registered name.--A foreign association whose
4name registration is effective may register as a foreign
5association under the registered name or consent in record form
6to the use of that name by another association.
7(d) Cross references.--See sections 134 (relating to
8docketing statement) and 135 (relating to requirements to be met
9by filed documents).
10SUBCHAPTER B
11(RESERVED)
12CHAPTER 3
13ENTITY TRANSACTIONS
14Subchapter
15A. Preliminary Provisions
16B. Approval of Entity Transactions
17C. Merger
18D. Interest Exchange
19E. Conversion
20F. Division
21G. Domestication
22SUBCHAPTER A
23PRELIMINARY PROVISIONS
24Sec.
25311. Short title of chapter.
26312. Definitions.
27313. Relationship of chapter to <-antitakeover provisions other
28provisions of law.
29314. Regulatory conditions and required notices and approvals.
30315. Nature of transactions.
1316. Contents of plan.
2317. Contractual dissenters rights in entity transactions.
3318. Excluded entities and transactions.
4319. Party to plan or transaction.
5320. Submission of matters to interest holders.
6§ 311. Short title of chapter.
7This chapter shall be known and may be cited as the Entity
8Transactions Law.
9§ 312. Definitions.
10(a) Definitions.--The following words and phrases when used
11in this chapter shall have the meanings given to them in this
12subsection unless the context clearly indicates otherwise:
13"Acquired association." The domestic entity or foreign
14association, all of one or more classes or series of interests
15in which are acquired in an interest exchange.
16"Acquiring association." The domestic entity or foreign
17association that acquires all of one or more classes or series
18of interests of the acquired association in an interest
19exchange.
20"Conversion." A transaction authorized by Subchapter E
21(relating to conversion).
22"Converted association." The converting association as it
23continues in existence after a conversion.
24"Converting association." The domestic entity or domestic
25banking institution that approves a plan of conversion pursuant
26to section 353 (relating to approval of conversion) or the
27foreign association that approves a conversion pursuant to the
28law of its jurisdiction of formation.
29"Dividing association." The domestic entity that approves a
30plan of division pursuant to section 363 (relating to approval
1of division) or 364 (relating to division without interest
2holder approval) or the foreign association that approves a
3division pursuant to the law of its jurisdiction of formation.
4"Division." A transaction authorized by Subchapter F
5(relating to division).
6"Domesticated entity." The domesticating entity as it
7continues in existence after a domestication.
8"Domesticating entity." The domestic entity that approves a
9plan of domestication pursuant to section 373(a) (relating to
10approval of domestication) or the foreign entity that approves a
11domestication pursuant to section 373(b).
12"Domestication." A transaction authorized by Subchapter G
13(relating to domestication).
14"Interest exchange." A transaction authorized by Subchapter
15D (relating to interest exchange).
16"Interest holder liability." Either of the following:
17(1) Personal liability for a liability of an association
18that is imposed on a person either:
19(i) Solely by reason of the status of the person as
20an interest holder.
21(ii) By the organic rules of the association that
22make one or more specified interest holders or categories
23of interest holders liable in their capacity as interest
24holders for all or specified liabilities of the entity.
25(2) An obligation of an interest holder under the
26organic rules of an association to contribute to the
27association.
28"Merger." A transaction in which two or more merging
29associations are combined into a surviving association pursuant
30to a document filed by the department or similar office in
1another jurisdiction.
2"Merging association." A domestic entity, domestic banking
3institution or foreign association that is a party to a merger
4under Subchapter C (relating to merger) and exists immediately
5before the merger becomes effective.
6"New association." An association that is created by a
7division.
8"Plan." A plan of merger, plan of interest exchange, plan of
9conversion, plan of division or plan of domestication, as
10applicable.
11"Protected agreement." Either of the following:
12(1) A record evidencing indebtedness and any related
13agreement in effect on <-{the Legislative Reference Bureau
14shall insert here the effective date of this chapter} <-July 1,
152015.
16(2) A protected governance agreement.
17"Protected governance agreement." Either of the following:
18(1) The organic rules of a domestic entity or foreign
19association in effect on {the Legislative Reference Bureau
20shall insert here on the effective date of this chapter}.
21(2) An agreement that is binding on any of the governors
22or interest holders of a domestic entity or foreign
23association on <-{the Legislative Reference Bureau shall insert
24here on the effective date of this chapter} <-July 1, 2015.
25"Registered office." In the case of a domestic banking
26institution that is a corporation, the principal place of
27business of the corporation set forth in its articles of
28incorporation as required by section 1004 of the act of November
2930, 1965 (P.L.847, No.356), known as the Banking Code of 1965.
30"Resulting association." A dividing association, if it
1survives the division, or a new association.
<-2"Special treatment." A provision of a plan permitted by
3section 329 (relating to special treatment of interest holders).
4"Surviving association." The domestic entity, domestic
5banking institution or foreign association that continues in
6existence after or is created by a merger under Subchapter C
7(relating to merger).
8(b) Index of definitions.--Following is a nonexclusive list
9of definitions in section 102 (relating to definitions) that
10apply to this chapter:
11"Act" or "action."
12"Banking institution."
13"Department."
14"Dissenters rights."
15"Domestic entity."
16"Entity."
17"Filing entity."
18"Foreign entity."
19"Governor."
20"Interest."
21"Interest holder."
22"Obligation."
23"Organic law."
24"Organic rules."
25"Private organic rules."
26"Property."
27"Public organic record."
28"Record form."
29"Registered foreign association."
30"Representative."
1"Sign."
2"Transfer."
3"Type."
4§ 313. Relationship of chapter to <-antitakeover provisions other
5provisions of law.
<-6(a) Antitakeover provisions.--A transaction under this
7chapter to which a registered corporation is a party may not
8impair any right or obligation that a person has under, and may
9not make applicable to the corporation, any provision of section
102538 (relating to approval of transactions with interested
11shareholders) or Subchapters E (relating to control
12transactions), F (relating to business combinations), G
13(relating to control-share acquisitions), H (relating to
14disgorgement by certain controlling shareholders following
15attempts to acquire control), I (relating to severance
16compensation for employees terminated following certain control-
17share acquisitions) and J (relating to business combination
18transactions-labor contracts) of Chapter 25, nor shall it change
19the standard of care applicable to the directors under
20Subchapter B of Chapter 17 (relating to fiduciary duty) unless:
21(1) If the corporation does not survive the transaction,
22the transaction satisfies any requirements of the provision.
23(2) If the corporation survives the transaction, the
24approval of the transaction is by a vote of the shareholders
25or directors which would be sufficient to impair the right or
26obligation under, or make the corporation subject to, the
27provision.
<-28(b) Transitional provision.--
29(1) This subsection applies to a transaction of a type
30authorized by this chapter if:
1(i) prior to July 1, 2015, a step has been taken to
2effectuate the transaction; but
3(ii) the transaction does not take effect by July 1,
42015.
5(2) Except as set forth in paragraph (3), the
6transaction shall remain subject to the former provisions of
7law supplied by this chapter until the transaction:
8(i) is abandoned; or
9(ii) takes effect.
10(3) Notwithstanding paragraph (2), if the plan provides
11that this chapter applies to the transaction, this chapter
12shall apply to the transaction after June 30, 2015.
13§ 314. Regulatory conditions and required notices and
14approvals.
15(a) Regulatory approvals.--If law of this Commonwealth other
16than this chapter requires notice to, or the approval of, a
17governmental agency or officer of this Commonwealth in
18connection with the participation under an organic law that is
19not part of this title by a domestic or foreign association in a
20transaction which is a form of transaction authorized by this
21chapter, the notice must be given or the approval obtained by
22the association before it may participate in any form of
23transaction under this chapter.
24(b) Certain regulated businesses.---A domestic converted
25association, domestic domesticated entity, domestic new
26association, domestic resulting association or domestic
27surviving association may not acquire as a result of a
28transaction under this chapter the power to engage in the
29business of banking, insurance or acting as a trust company
30unless an association of that type is authorized to have and
1exercise that power under the law of this Commonwealth.
2(c) Charitable assets.--Property held for a charitable
3purpose under the law of this Commonwealth by a domestic or
4foreign association immediately before a transaction under this
5chapter becomes effective may not, as a result of the
6transaction, be diverted from the objects for which it was
7donated, granted, devised or otherwise transferred unless, to
8the extent required by or pursuant to the law of this
9Commonwealth concerning cy pres or other law dealing with
10nondiversion of charitable assets, the domestic or foreign
11association obtains an appropriate order of a court of competent
12jurisdiction specifying the disposition of the property.
13(d) Preservation of transfers.--A bequest, devise, gift,
14grant or promise contained in a will or other instrument of
15donation, subscription or conveyance that is made to a merging
16association that is not the surviving association and that takes
17effect or remains payable after the merger inures to the
18surviving association. A trust obligation that would govern
19property if transferred to a merging association that is not the
20surviving association applies to property that is transferred to
21the surviving association.
22(e) Cross reference.--See section 318 (relating to excluded
23entities and transactions).
24§ 315. Nature of transactions.
<-25(a) De facto transaction doctrine abolished.--The doctrine
26of de facto mergers, consolidations and other fundamental
27transactions is abolished and the rules laid down by Bloch v.
28Baldwin Locomotive Works, 75 Pa. D. & C. 24 (Pa.C.P. 1950), and
29Marks v. The Autocar Co., 153 F.Supp. 768 (E.D. Pa. 1954), and
30similar cases are abrogated. A transaction to which a domestic
1business corporation is a party that in form satisfies the
2requirements of this chapter and Part II, Subpart B (relating to
3business corporations) may be challenged by reason of its
4substance only to the extent permitted by section 1105 (relating
5to restriction on equitable relief).
6(b) Nonexclusivity.--The fact that a sale or conversion of
7the interests in or assets of an association or a transaction
8under a particular subchapter produces a result that could be
9accomplished in any other manner permitted by a different
10subchapter or other law shall not be a basis for
11recharacterizing the sale, conversion or transaction as a
12different form of sale, conversion or transaction under any
13other subchapter or other law.
14§ 316. Contents of plan.
15(a) Omission of certain provisions.--A plan as delivered to
16the department for filing under any provision of this chapter in
17lieu of a statement of merger, statement of interest exchange,
18statement of conversion, statement of division or statement of
19domestication may omit all provisions of the plan except
20provisions, if any, that:
21(1) are intended to amend or constitute the operative
22provisions of the public organic record of a domestic
23association as in effect subsequent to the effectiveness of
24the plan;
25(2) are required by this chapter in the statement in
26lieu of which the plan is being delivered to the department
27for filing; or
28(3) allocate or specify the respective property and
29liabilities of the resulting associations, in the case of a
30plan of division.
1(b) Availability of full plan.--If any of the provisions of
2a plan are omitted from the plan as delivered to the department
3as permitted under subsection (a), the plan must state that the
4full text of the plan is on file at the principal office of the
5surviving, acquiring, converted, new or resulting association or
6domesticated entity and the address thereof. An association that
7takes advantage of this section shall furnish a copy of the full
8text of the plan, on request and without cost, to any interest
9holder of any domestic or foreign association that was a party
10to the plan.
11(c) Reference to external facts.--A plan may refer to facts
12ascertainable outside of the plan if the manner in which the
13facts will operate on the plan is specified in the plan. The
14facts may include the occurrence of an event or a determination
15or action by a person, whether or not the event, determination
16or action is within the control of a party to the transaction.
17§ 317. Contractual dissenters rights in entity transactions.
18(a) General rule.--An interest holder of a domestic entity
19other than a nonprofit corporation or unincorporated nonprofit
20association shall be entitled to contractual dissenters rights
21in connection with a transaction under this chapter, even though
22the interest holder would not otherwise be entitled to
23dissenters rights under this title to the extent provided:
24(1) in the entity's organic rules; or
25(2) in the plan.
26(b) Procedures for contractual dissenters rights.--If an
27interest holder is entitled to contractual dissenters rights
28pursuant to subsection (a), Subchapter D of Chapter 15 (relating
29to dissenters rights) applies to the extent practicable except
30as otherwise provided in the organic rules of the domestic
1entity or the plan.
2(c) Cross references.--See sections 329 (relating to special
3treatment of interest holders) and 1571(c) (relating to
4application and effect of subchapter).
5§ 318. Excluded entities and transactions.
6(a) Excluded entities.--The following entities may not
7participate in a transaction under this chapter:
8(1) A cooperative corporation subject to Chapter 73
9(relating to electric cooperative corporations).
10(2) <-A cooperative corporation subject to Chapter 75
11(relating to cooperative agricultural associations).
12(3) A beneficial, benevolent, fraternal or fraternal
13benefit society:
14(i) having a lodge system and a representative form
15of government; or
16(ii) transacting any type of insurance.
17(b) Excluded transactions involving certain nonprofit
18corporations.--The following apply to nonprofit corporations:
19(1) Except as provided in paragraph (2), this chapter
20may not be used to accomplish a transaction that has the
21effect of converting a domestic nonprofit corporation that is
22subject to the supervision of the Department of Banking and
23Securities, the Insurance Department or the Pennsylvania
24Public Utility Commission to a different type of entity.
25(2) Paragraph (1) does not apply to a <-transaction under
26this chapter in which a health maintenance organization <-is
27converted to a different type of entity if the transaction
28has received the prior approval of the Insurance Department.
29(c) Cross references.--See sections 103 (relating to
30subordination of title to regulatory laws) and 314 (relating to
1regulatory conditions and required notices and approvals).
2§ 319. Party to plan or transaction.
3An association that approves a plan in its capacity as an
4interest holder or creditor of a domestic or foreign association
5that is a party to the transaction under the plan, or that
6furnishes all or a part of the consideration contemplated by a
7plan, does not thereby become a party to the plan or the
8transaction under the plan for purposes of this chapter.
9§ 320. Submission of matters to interest holders.
10(a) General rule.--A domestic association may agree, in
11record form, to submit a plan to its interest holders whether or
12not the governors determine, at any time after approving the
13matter plan, that the <-matter plan is no longer advisable and
14recommend that the interest holders reject or vote against it,
15regardless of whether the governors change their recommendation.
16If an association so agrees to submit a <-matter plan to its
17interest holders, the <-matter plan is deemed to have been validly
18adopted by the association when it has been approved by the
19interest holders.
20(b) Cross references.--See sections 321(c) (relating to
21approval by business corporation) and 325(c)(2) (relating to
22approval by limited liability company).
23SUBCHAPTER B
24APPROVAL OF ENTITY TRANSACTIONS
25Sec.
26321. Approval by business corporation.
27322. Approval by nonprofit corporation.
28323. Approval by general partnership.
29324. Approval by limited partnership.
30325. Approval by limited liability company.
1326. Approval by professional association.
2327. Approval by business trust.
3328. Approval by unincorporated nonprofit association.
4329. Special treatment of interest holders.
5330. Alternative means of approval of transactions.
6§ 321. Approval by business corporation.
7(a) Proposal of plan.--Except where the approval of the
8board of directors is unnecessary pursuant to section 330
9(relating to alternative means of approval of transactions), a
10plan shall be proposed in the case of a domestic business
11corporation by the adoption by the board of directors of a
12resolution approving the plan. Except where the approval of the
13shareholders is unnecessary under this chapter, the board of
14directors shall direct that the plan be submitted to a vote of
15the shareholders entitled to vote thereon at a regular or
16special meeting of the shareholders.
17(b) Notice of meeting of shareholders.--Notice in record
18form of the meeting of shareholders that will act on the
19proposed plan must be given to each shareholder of record,
20whether or not entitled to vote thereon, of each domestic
21business corporation that is a party to the transaction under
22the plan. There shall be included in or enclosed with the notice
23a copy of the proposed plan or a summary thereof and any notice
24required by section 329 (relating to special treatment of
25interest holders) <-or 1574 (relating to notice of intention to
26dissent)..<- If the holders of shares of any class or series of
27shares are entitled to assert dissenters rights, the notice must
28include or be accompanied by the text of the provision of this
29chapter granting dissenters rights and the text of Chapter 15
30Subch. D (relating to dissenters rights). The notice must state
1that a copy of the organic rules of the surviving, acquired,
2converted, new or resulting association or domesticated entity
3as they will be in effect immediately following the transaction
4will be furnished to any shareholder of the corporation giving
5the notice on request and without cost.
6(c) Shareholder vote required.--Except as provided in
7section 1757 (relating to action by shareholders) or subsection
8(d), a plan shall be adopted by a domestic business corporation
9that is a party to the transaction under the plan upon receiving
10the affirmative vote of a majority of the votes cast by all
11shareholders entitled to vote on the plan and, if any class or
12series of shares is entitled to vote thereon as a class, the
13affirmative vote of a majority of the votes cast in each class
14vote. The holders of any class or series of shares of a domestic
15business corporation that is a party to a transaction under a
16plan that would effect any change in the articles of the
17corporation shall be entitled to vote as a class on the plan if
18they would have been entitled to a class vote under the
19provisions of section 1914 (relating to adoption of amendments)
20had the change been accomplished under Subchapter B of Chapter
2119 (relating to amendment of articles). Except as provided in
22section 330, a proposed plan shall not be deemed to have been
23adopted by a domestic business corporation unless it has also
24been approved by the board of directors, regardless of the fact
25that the board has directed or suffered the submission of the
26plan to the shareholders for action.
27(d) Adoption of plan of merger without shareholder vote.--
28(1) Unless otherwise required by the organic rules, a
29plan of merger shall not require the approval of the
30shareholders of a domestic business corporation that is a
1merging association if:
2(i) whether or not the corporation is the surviving
3association:
4(A) the surviving association is a domestic
5business corporation and its articles are identical
6to the articles of the corporation for which
7shareholder approval is not required, except for
8changes that could be made without shareholder
9approval pursuant to section 1914(c);
10(B) each share of the corporation outstanding
11immediately prior to the effectiveness of the merger
12is to continue as or be converted into, except as may
13be otherwise agreed by the holder thereof, an
14identical share of the surviving association; and
15(C) the plan provides that the shareholders of
16the corporation are to hold in the aggregate shares
17of the surviving association to be outstanding
18immediately after the effectiveness of the merger
19entitled to cast at least a majority of the votes
20entitled to be cast generally for the election of
21directors;
22(ii) immediately prior to the adoption of the plan
23and at all times thereafter prior to the effectiveness of
24the merger, another association owns directly or
25indirectly 80% or more of the outstanding shares of each
26class of the corporation; or
27(iii) no shares of the corporation have been issued
28prior to the adoption of the plan by the board of
29directors pursuant to subsection (a).
30(2) If a merger is effected pursuant to paragraph (1)(i)
1or (iii), the plan shall be deemed adopted by the <-constituent
2corporation when it has been adopted by the board of
3directors pursuant to subsection (a).
4(3) If a merger of a subsidiary corporation is effected
5pursuant to paragraph (1)(ii), the plan shall be deemed
6adopted by the subsidiary corporation when it has been
7adopted by the governors of the parent association and
8neither approval of the plan by the board of directors of the
9subsidiary corporation nor signing of the statement of merger
10by the subsidiary corporation shall be necessary.
11(4) Unless otherwise required by the organic rules, a
12plan of merger providing for the merger of a domestic
13business corporation <-(referred to in this paragraph as a
14"constituent corporation") with or into a single indirect
15wholly owned subsidiary (referred to in this paragraph as the
16"subsidiary corporation") of the constituent corporation
17shall not require the approval of the shareholders of either
18the constituent corporation or the subsidiary corporation if
19all of the following provisions are satisfied.
20(i) A merger under this paragraph must satisfy the
21following conditions:
22(A) The constituent corporation and the
23subsidiary corporation are the only parties to the
24merger, other than a surviving association that is a
25corporation created in the merger.
26(B) Each share or fraction of a share of the
27capital stock of the constituent corporation
28outstanding immediately prior to the effectiveness of
29the merger is converted in the merger into a share or
30equal fraction of a share of capital stock of a
1holding company having the same designations, rights,
2powers and preferences and the qualifications,
3limitations and restrictions as the share of capital
4stock of the constituent corporation being converted
5in the merger.
6(C) The holding company and the surviving
7association are each domestic business corporations.
8(D) Immediately following the effectiveness of
9the merger, the articles of incorporation and bylaws
10of the holding company are identical to the articles
11of incorporation and bylaws of the constituent
12corporation immediately before the effectiveness of
13the merger, except for changes that could be made
14without shareholder approval pursuant to section
151914(c).
16(E) Immediately following the effectiveness of
17the merger, the surviving association is a direct or
18indirect wholly owned subsidiary of the holding
19company.
20(F) The directors of the constituent corporation
21become or remain the directors of the holding company
22on the effectiveness of the merger.
23(G) The board of directors of the constituent
24corporation has made a good faith determination that
25the shareholders of the constituent corporation will
26not recognize gain or loss for United States Federal
27income tax purposes.
28(ii) If the holding company is a registered
29corporation, the shares of the holding company issued in
30connection with the merger shall be deemed to have been
1acquired at the time that the shares of the constituent
2corporation converted in the merger were acquired.
3(iii) As used in this paragraph only, the term
4"holding company" means a corporation that, from its
5incorporation until consummation of the merger governed
6by this paragraph, was at all times a direct wholly owned
7subsidiary of the constituent corporation and whose
8capital stock is issued in the merger.
<-9(e) Approval of division by preferred shares.--If a dividing
10association that is a business corporation has outstanding any
11shares of a preferred or special class or series of shares,
12regardless of a limitation stated in the articles or bylaws on
13the voting rights of the class or series of shares, the holders
14of outstanding shares of the class or series shall be entitled
15to vote as a class on a plan of division which:
16(1) provides that the dividing association will not
17survive the division; or
18(2) amends the articles or bylaws of the surviving
19corporation in a manner that would entitle the holders of the
20preferred or special shares to a class vote on the amendment
21under the articles, the bylaws or section 1914(b).
<-22(e) (f) Cross references.--See:
23Subchapter A of Chapter 17 (relating to notice and
24meetings generally).
25Section 2512 (relating to dissenters rights procedure).
26Section 2539 (relating to adoption of plan of merger by
27board of directors).
28Section 3304(b) (relating to election of benefit
29corporation status).
30Section 3305(b) (relating to termination of benefit
1corporation status).
2§ 322. Approval by nonprofit corporation.
3(a) Proposal of plan.--A plan shall be proposed in the case
4of a domestic nonprofit corporation as follows:
5(1) by the adoption by the board of directors or other
6body of a resolution approving the plan;
7(2) unless otherwise provided in the articles, by
8petition of members entitled to cast at least 10% of the
9votes that all members are entitled to cast thereon, setting
10forth the proposed plan, which petition shall be directed to
11the board of directors and filed with the secretary of the
12corporation; or
13(3) by such other method as may be provided in the
14bylaws.
15(b) Submission to members.--Except where the domestic
16nonprofit corporation has no members entitled to vote thereon,
17the board of directors or other body shall direct that the plan
18be submitted to a vote of the members entitled to vote thereon
19at a regular or special meeting of the members.
20(c) Notice of meeting of members.--Notice in record form of
21the meeting of members that will act on the proposed plan shall
22be given to each member of record, whether or not entitled to
23vote thereon, of each domestic nonprofit corporation that is a
24party to the transaction under the plan. A copy of the proposed
25plan or a summary thereof shall be included in or enclosed with
26the notice. The notice shall state that a copy of the organic
27rules of the surviving, acquired, converted, new or resulting
28association or domesticated entity as they will be in effect
29immediately following the transaction will be furnished to any
30member of the corporation giving the notice on request and
1without cost.
2(d) Member vote required.--Except as provided in section
35757 (relating to action by members), a plan shall be adopted
4upon receiving the affirmative vote of at least a majority of
5the votes that all members present are entitled to cast thereon
6of each domestic nonprofit corporation that is a party to the
7transaction under the plan. If any class of members is entitled
8to vote on the plan as a class, the plan must be adopted by the
9affirmative vote of at least a majority of the votes that all
10members present of such class are entitled to cast thereon.
11(e) Adoption in absence of voting members.--If a domestic
12nonprofit corporation has no members entitled to vote thereon, a
13plan shall be deemed adopted by the corporation when it has been
14adopted by the board of directors or other body pursuant to
15subsection (a).
16(f) Cross references.--See Subchapter A of Chapter 57
17(relating to notice and meetings generally) and section 3304(b)
18(relating to election of benefit corporation status).
19§ 323. Approval by general partnership.
20(a) General rule.--A plan shall be approved in the case of a
21domestic general partnership as follows:
22(1) in the manner provided in its organic rules for the
23type of plan involved;
24(2) if its organic rules do not provide for approval of
25the type of plan involved, in the manner provided in its
26organic rules for approval of a plan of merger; or
27(3) if its organic rules do not provide for approval of
28the type of plan involved or a plan of merger, the plan shall
29be approved by all of the partners.
30(b) Cross reference.--See section 3304(b) (relating to
1election of benefit corporation status).
2§ 324. Approval by limited partnership.
3(a) Proposal of plan.--A plan shall be proposed in the case
4of a domestic limited partnership by the adoption by a unanimous
5vote of the general partners of a resolution approving the plan.
6Except where the approval of the limited partners is unnecessary
7under this chapter or the organic rules, the general partners
8shall submit the plan to a vote of the limited partners entitled
9to vote thereon at a regular or special meeting of the limited
10partners.
11(b) Notice of meeting of limited partners.--Notwithstanding
12any other provision of the organic rules, notice in record form
13of the meeting of limited partners called for the purpose of
14considering the proposed plan shall be given to each limited
15partner, whether or not entitled to vote thereon, of each
16domestic limited partnership that is a party to the transaction
17under the plan. A copy of the proposed plan or a summary thereof
18shall be included in or enclosed with the notice. The notice
19shall state that a copy of the organic rules of the surviving,
20acquired, converted, new or resulting association or
21domesticated entity as they will be in effect immediately
22following the transaction will be furnished to any limited
23partner of the limited partnership giving the notice on request
24and without cost.
25(c) Required vote by limited partners.--The plan shall be
26adopted upon receiving a majority of the votes cast by all
27limited partners, if any, entitled to vote thereon of each
28domestic limited partnership that is a party to the proposed
29transaction under the plan and, if any class of limited partners
30is entitled to vote thereon as a class, a majority of the votes
1cast in each class vote. A proposed plan may not be deemed to
2have been adopted by the limited partnership unless it has also
3been approved by the general partners, regardless of the fact
4that the general partners have directed or suffered the
5submission of the plan to the limited partners for action.
6(d) Merger by action of general partners only.--Except as
7provided in the organic rules, a plan of merger shall not
8require the approval of the limited partners of a domestic
9limited partnership that is a merging association and shall be
10deemed adopted by the limited partnership when it has been
11adopted by the general partners pursuant to subsection (a) if:
12(1) whether or not the limited partnership is the
13surviving association, the surviving association is a
14domestic limited partnership and its organic rules are
15identical to the organic rules of the merging limited
16partnership, except for changes that could be made without
17action by the limited partners; and
18(2) each partnership interest outstanding immediately
19before the effectiveness of the merger is to continue as or
20to be converted into, except as may be otherwise agreed by
21the holder thereof, an identical partnership interest in the
22surviving limited partnership after the effectiveness of the
23merger.
24(e) Cross reference.--See section 3304(b) (relating to
25election of benefit corporation status).
26§ 325. Approval by limited liability company.
27(a) Proposal of plan in manager-managed company.--Except as
28provided in the organic rules or where the approval of the
29managers is unnecessary under section 330 (relating to
30alternative means of approval of transactions), a plan shall be
1proposed, in the case of a manager-managed, domestic limited
2liability company, by the adoption by the managers of a
3resolution approving the plan. Except where the approval of the
4members of a manager-managed, domestic limited liability company
5is unnecessary under this chapter or the organic rules, the plan
6shall be submitted to a vote of the members entitled to vote
7thereon at a regular or special meeting of the members.
8(b) Notice of meeting of members.--Except as provided in the
9organic rules:
10(1) Notice in record form of the meeting of members of a
11domestic limited liability company that will act on the
12proposed plan shall be given to each member of record,
13whether or not entitled to vote thereon, of each domestic
14limited liability company that is a party to the transaction
15under the plan.
16(2) There shall be included in or enclosed with the
17notice a copy of the proposed plan or a summary thereof.
18(3) The notice shall state that a copy of the organic
19rules of the surviving, acquired, converted, new or resulting
20association or domesticated entity as they will be in effect
21immediately following the transaction will be furnished to
22any member of the company giving the notice on request and
23without cost.
24(c) Adoption of plan by members.--A plan:
25(1) Except as provided in the organic rules, shall be
26adopted upon receiving a majority of the votes cast by all
27members, if any, entitled to vote thereon of each of the
28domestic limited liability companies that is a party to the
29transaction under the plan and, if any class of members is
30entitled to vote thereon as a class, a majority of the votes
1cast in each class vote.
2(2) Except as provided in the organic rules or section
3330, shall not be deemed to have been adopted by a manager-
4managed company unless it has also been approved by the
5managers, regardless of the fact that the managers have
6directed or suffered the submission of the plan to the
7members for action.
8(d) Merger by action of managers only.--Unless otherwise
9required by a provision of the organic rules in record form, a
10plan of merger shall not require the approval of the members of
11a manager-managed, domestic limited liability company and shall
12be deemed adopted by the company when a resolution approving the
13plan has been adopted by the managers pursuant to subsection (a)
14if:
15(1) Whether the company is the surviving association:
16(i) the surviving association is a domestic limited
17liability company and its organic rules are identical to
18the organic rules of the limited liability company that
19is party to the merger, except for changes that could be
20made without action by the members; and
21(ii) each membership interest outstanding
22immediately prior to the effectiveness of the merger is
23to continue as or to be converted into, except as may be
24otherwise agreed by the holder thereof, an identical
25membership interest in the surviving association after
26the effectiveness of the merger.
27(2) The plan of merger provides for the merger of the
28company, referred to in this paragraph as the "constituent
29company," with or into a single indirect wholly owned
30subsidiary, referred to in this paragraph as the "subsidiary
1company," of the constituent company if all of the following
2provisions are satisfied:
3(i) The constituent company and the subsidiary
4company are the only parties to the merger, other than a
5surviving association that is created in the merger.
6(ii) Each interest of the constituent company
7outstanding immediately prior to the effectiveness of the
8merger is converted in the merger into an interest of a
9holding company having the same designations, rights,
10powers and preferences and the qualifications,
11limitations and restrictions as the interest of the
12constituent company being converted in the merger.
13(iii) The holding company and the surviving
14association are each domestic limited liability
15companies.
16(iv) Immediately following the effectiveness of the
17merger, the certificate of organization and operating
18agreement of the holding company are identical to the
19certificate of organization and operating agreement of
20the constituent company immediately before the
21effectiveness of the merger, except for changes that
22could be made without member approval pursuant to Chapter
2389 (relating to limited liability companies).
24(v) Immediately following the effectiveness of the
25merger, the surviving association is a direct or indirect
26wholly owned subsidiary of the holding company.
27(vi) The managers of the constituent company become
28or remain the managers of the holding company on the
29effectiveness of the merger.
30(vii) The managers of the constituent company have
1made a good faith determination that the members of the
2constituent company will not recognize gain or loss for
3United States Federal income tax purposes.
4(viii) As used in this paragraph only, the term
5"holding company" means a limited liability company that,
6from its formation until consummation of the merger
7governed by this paragraph, was at all times a direct
8wholly owned subsidiary of the constituent company and
9interests in which are issued in the merger.
10(e) Cross reference.--See section 3304(b) (relating to
11election of benefit corporation status).
12§ 326. Approval by professional association.
13(a) General rule.--A plan shall be approved in the case of a
14domestic professional association by vote of a majority, or such
15higher percentage as may be provided in the organic rules, of
16the associates, voting according to their proportionate shares
17of ownership.
18(b) Cross reference.--See section 3304(b) (relating to
19election of benefit corporation status).
20§ 327. Approval by business trust.
21(a) General rule.--Except as provided in subsection (b), a
22plan shall be approved in the case of a domestic business trust
23as follows:
24(1) in the manner provided in its organic rules for the
25type of plan involved;
26(2) if its organic rules do not provide for approval of
27the type of plan involved, in the manner provided in its
28organic rules for approval of a plan of merger; or
29(3) if its organic rules do not provide for approval of
30the type of plan involved or a plan of merger, the plan
1shall be approved by all of the beneficial owners.
2(b) Adoption of plan of merger without beneficiary vote.--
3Unless otherwise required by the organic rules, a plan of merger
4providing for the merger of a domestic business trust, referred
5to in this paragraph as the "constituent trust," with or into a
6single indirect wholly owned subsidiary, referred to in this
7paragraph as the "subsidiary trust," of the constituent trust
8shall not require the approval of the beneficiaries of the
9constituent trust if all of the following provisions are
10satisfied:
11(1) The constituent trust and the subsidiary trust are
12the only parties to the merger, other than a surviving
13association created in the merger.
14(2) Each interest in the constituent trust outstanding
15immediately prior to the effectiveness of the merger is
16converted in the merger into an interest in the holding trust
17having the same designations, rights, powers and preferences
18and the qualifications, limitations and restrictions as the
19interests in the constituent trust being converted in the
20merger.
21(3) The holding trust and the surviving association are
22each domestic business trusts.
23(4) Immediately following the effectiveness of the
24merger, the instrument and organic rules of the holding trust
25are identical to the instrument and organic rules of the
26constituent trust immediately before the effectiveness of the
27merger, except for changes that could be made without
28beneficiary approval under Chapter 95 (relating to business
29trusts).
30(5) Immediately following the effectiveness of the
1merger, the surviving association is a direct or indirect
2wholly owned subsidiary of the holding trust.
3(6) The trustees of the constituent trust become or
4remain the trustees of the holding trust on the effectiveness
5of the merger.
6(7) The trustees of the constituent trust have made a
7good faith determination that the beneficiaries of the
8constituent trust will not recognize gain or loss for United
9States Federal income tax purposes.
10(8) As used in this subsection only, the term "holding
11trust" means a business trust that, from its formation until
12consummation of the merger governed by this subsection, was
13at all times a direct wholly owned subsidiary of the
14constituent trust and the interests in which are issued in
15the merger.
16(c) Cross reference.--See section 3304(b) (relating to
17election of benefit corporation status).
18§ 328. Approval by unincorporated nonprofit association.
19(a) General rule.--Except as provided in the governing
20principles, a plan shall be approved in the case of a domestic
21unincorporated nonprofit association by the affirmative vote of
22at least a majority of the votes cast at a meeting of the
23members.
24(b) Cross reference.--See section 3304(b) (relating to
25election of benefit corporation status).
26§ 329. Special treatment of interest holders.
27(a) General rule.--Except as otherwise restricted in the
28organic rules, a plan may contain a provision classifying the
29interest holders of a class or series of interests into one or
30more separate groups by reference to any facts or circumstances
1that are not manifestly unreasonable and providing mandatory
2treatment for interests of the class or series held by
3particular interest holders or groups of interest holders that
4differs materially from the treatment accorded other interest
5holders or groups of interest holders that hold interests of the
6same class or series, including a provision modifying or
7rescinding rights previously created under this section if
8either of the following applies:
9(1) The plan:
10(i) is approved by a majority of the votes cast by
11the holders of any class or series of interests any of
12the interests of which are so classified into groups,
13whether or not such class or series would otherwise be
14entitled to vote on the plan; and
15(ii) specifically enumerates the type and extent of
16the special treatment authorized.
17(2) Under all the facts and circumstances, a court of
18competent jurisdiction finds such special treatment is
19undertaken in good faith, after reasonable deliberation and
20is in the best interest of the association.
21(b) Statutory voting rights on special treatment.--Except as
22provided in subsection (d), if a plan contains a provision for
23special treatment, each group of holders of any outstanding
24interests of a class or series who are to receive the same
25special treatment under the plan shall be entitled to vote as a
26special class in respect to the plan regardless of any
27limitations stated in the organic rules on the voting rights of
28any class or series.
29(c) Determination of groups.--For purposes of applying
30subsections (a)(1) and (b), the determination of which interest
1holders are part of each group receiving special treatment shall
2be made as of the record date for interest holder action on the
3plan.
4(d) Dissenters rights on special treatment.--If a plan
5contains a provision for special treatment without requiring for
6the adoption of the plan the statutory class vote required under
7subsection (b), the holder of any outstanding interests the
8statutory class voting rights of which are so denied shall be
9entitled to assert dissenters rights with respect to those
10interests. A shareholder of a business corporation who wishes to
11assert dissenters rights shall comply with Subchapter D of
12Chapter 15 (relating to dissenters rights). An interest holder
13in any other type of domestic entity shall comply with
14Subchapter D of Chapter 15 to the extent practicable.
15(e) Notice to interest holders.--Any notice to interest
16holders of a meeting called to act on a plan that provides for
17special treatment shall state that the plan provides for special
18treatment. The notice shall identify the interest holders
19receiving special treatment unless the notice is accompanied by
20either a summary of the plan that includes that information or
21the full text of the plan.
22(f) Exceptions.--This section shall not apply to any of the
23following:
24(1) A provision of a plan that offers to all holders of
25interests of a class or series the same option to elect
26certain treatment.
27(2) A plan involving any type of domestic entity that
28contains an express provision that this section does not
29apply or that fails to contain an express provision that this
30section shall apply.
1(3) A provision of a plan that treats all of the holders
2of a particular class or series of interests of any type of
3domestic entity differently from the holders of another class
4or series. A provision of a plan that treats the holders of a
5class or series of shares of a domestic business corporation
6differently from the holders of another class or series of
7shares shall not constitute a violation of section 1521(d)
8(relating to authorized shares).
9§ 330. Alternative means of approval of transactions.
10(a) General rule.--Except as provided in subsection (b) or
11the organic rules of a domestic entity, approval of a
12transaction under this chapter by the unanimous vote or consent
13of its interest holders satisfies the requirements of this
14chapter for approval of the transaction.
15(b) Exception.--Subsection (a) shall not apply to a
16nonprofit corporation.
17SUBCHAPTER C
18MERGER
19Sec.
20331. Merger authorized.
21332. Plan of merger.
22333. Approval of merger.
23334. Amendment or abandonment of plan of merger.
24335. Statement of merger; effectiveness.
25336. Effect of merger.
26§ 331. Merger authorized.
27(a) General rule.--Except as provided in section 318
28(relating to excluded entities and transactions) or this
29section, by complying with this chapter:
30(1) One or more domestic entities may merge with one or
1more domestic entities or foreign associations into a
2surviving association.
3(2) Two or more foreign associations may merge into a
4surviving association that is a domestic entity.
5(3) A domestic banking institution may be a merging
6association or surviving association in a merger with one or
7more domestic or foreign associations if the surviving
8association or at least one of the merging associations is a
9domestic entity.
10(b) Foreign law authorization required.--By complying with
11the applicable provisions of this subchapter, a foreign
12association may be a party to a merger under this subchapter or
13may be the surviving association in such a merger if the merger
14is authorized by the law of the jurisdiction of formation of the
15foreign association.
16(c) Banking institutions.--Subsection (a)(3) controls over
17any inconsistent provision of the organic law of a domestic
18banking institution that is a merging association.
19(d) Exception.--A health maintenance organization may be a
20merging association only if the surviving association is a
21health maintenance organization.
22(e) Cross reference.--See section 314 (relating to
23regulatory conditions and required notices and approvals).
24§ 332. Plan of merger.
25(a) General rule.--A domestic entity may become a party to a
26merger by approving a plan of merger. The plan shall be in
27record form and contain all of the following:
28(1) As to each merging association, its name,
29jurisdiction of formation and type.
30(2) If the surviving association is to be created in the
1merger, a statement to that effect and the association's
2name, jurisdiction of formation and type.
3(3) The manner, if any, of:
4(i) converting some or all of the interests in a
5merging association into interests, securities,
6obligations, money, other property, rights to acquire
7interests or securities, or any combination of the
8foregoing; or
9(ii) canceling some or all of the interests in a
10merging association.
11(4) If the surviving association exists before the
12merger, any proposed amendments to:
13(i) its public organic record, if any; or
14(ii) its private organic rules that are or are
15proposed to be in record form.
16(5) If the surviving association is to be created in the
17merger:
18(i) its proposed public organic record, if any; and
19(ii) the full text of its private organic rules that
20are proposed to be in record form.
21(6) Provisions, if any, providing special treatment of
22interests in a merging association held by any interest
23holder or group of interest holders as authorized by, and
24subject to, section 329 (relating to special treatment of
25interest holders).
26(7) The other terms and conditions of the merger.
27(8) Any other provision required by:
28(i) the law of this Commonwealth;
29(ii) the law of the jurisdiction of formation of a
30foreign merging or surviving association; or
1(iii) the organic rules of a merging association.
2(b) Optional contents.--In addition to the requirements of
3subsection (a), a plan of merger may contain any other provision
4not prohibited by law.
5(c) Cross reference.--See section 316 (relating to contents
6of plan).
7§ 333. Approval of merger.
8(a) Approval by domestic entities.--A plan of merger shall
9not be effective unless it has been approved in both of the
10following ways:
11(1) The plan is approved by a domestic entity that is a
12merging association in accordance with the applicable
13provisions of Subchapter B (relating to approval of entity
14transactions).
15(2) The plan is approved in record form by each interest
16holder, if any, of a domestic entity that is a merging
17association that will have interest holder liability for
18debts, obligations and other liabilities that arise after the
19merger becomes effective, unless, as to an interest holder
20that does not approve the plan, both of the following apply:
21(i) The organic rules of the domestic entity provide
22in record form for the approval of a merger in which some
23or all of its interest holders become subject to interest
24holder liability by the vote or consent of fewer than all
25the interest holders.
26(ii) The interest holder consented in record form to
27or voted for that provision of the organic rules or
28became an interest holder after the adoption of that
29provision.
30(b) Approval by foreign associations.--A merger under this
1subchapter in which a foreign association is a merging
2association is not effective unless the merger is approved by
3the foreign association in accordance with the law of its
4jurisdiction of formation.
5(c) Approval by domestic banking institutions.--A merger
6under this subchapter in which a domestic banking institution
7that is not a domestic entity is a merging association is not
8effective unless the merger is approved by the domestic banking
9institution in accordance with the requirements in its organic
10law and organic rules for approval of a merger.
11(d) Dissenters rights.--
12(1) Except as provided in paragraph (2), if a
13shareholder of a domestic business corporation that is to be
14a merging association objects to the plan of merger and
15complies with Subchapter D of Chapter 15 (relating to
16dissenters rights), the shareholder shall be entitled to
17dissenters rights to the extent provided in that subchapter.
18(2) Except as provided under section 317 (relating to
19contractual dissenters rights in entity transactions),
20dissenters rights shall not be available to shareholders of a
21domestic business corporation that is a merging association
22in a merger described in section 321(d)(1)(i) or (4)
23(relating to approval by business corporation).
24(3) If a shareholder of a domestic banking institution
25that is to be a merging association objects to the plan of
26merger and complies with section 1222 of the act of November
2730, 1965 (P.L.847, No.356), known as the Banking Code of
281965, the shareholder shall be entitled to the rights
29provided in that section.
30(4) See section 329 (relating to special treatment of
1interest holders).
2§ 334. Amendment or abandonment of plan of merger.
3(a) General rule.--A plan of merger may be amended or
4abandoned only with the consent of each party to the plan,
5except as otherwise provided in the plan.
6(b) Approval of amendment.--A domestic entity that is a
7merging association may approve an amendment of a plan of merger
8in one of the following ways:
9(1) In the same manner as the plan was approved, if the
10plan does not provide for the manner in which it may be
11amended.
12(2) By its governors or interest holders in the manner
13provided in the plan, but an interest holder that was
14entitled to vote on or consent to approval of the plan is
15entitled to vote on or consent to any amendment of the plan
16that will change any of the following:
17(i) The amount or kind of interests, securities,
18obligations, money, other property, rights to acquire
19interests or securities, or any combination of the
20foregoing, to be received by the interest holders of any
21party to the plan.
22(ii) The public organic record, if any, or private
23organic rules of the surviving association that will be
24in effect immediately after the merger becomes effective,
25except for changes that do not require approval of the
26interest holders of the surviving association under its
27organic law or organic rules.
28(iii) Any other terms or conditions of the plan, if
29the change would:
30(A) increase the interest holder liability to
1which the interest holder will be subject; or
2(B) otherwise adversely affect the interest
3holder in any material respect.
4(c) Approval of abandonment.--After a plan of merger has
5been approved by a domestic entity that is a merging association
6and before a statement of merger becomes effective, the plan may
7be abandoned as provided in the plan. Unless prohibited by the
8plan, a domestic entity that is a merging association may
9abandon the plan in the same manner as the plan was approved.
10(d) Statement of abandonment.--If a plan of merger is
11abandoned after a statement of merger has been delivered to the
12department for filing and before the statement becomes
13effective, a statement of abandonment, signed by a party to the
14plan, must be delivered to the department for filing before the
15statement of merger becomes effective. The statement of
16abandonment shall take effect on filing, and the merger shall be
17abandoned and shall not become effective. The statement of
18abandonment shall contain all of the following:
19(1) The name of each party to the plan of merger.
20(2) The date on which the statement of merger was filed
21by the department.
22(3) A statement that the merger has been abandoned in
23accordance with this section.
24(e) Cross references.--See sections 134 (relating to
25docketing statement) and 135 (relating to requirements to be met
26by filed documents).
27§ 335. Statement of merger; effectiveness.
28(a) General rule.--A statement of merger shall be signed by
29each merging association and delivered to the department for
30filing along with the certificates, if any, required by section
1139 (relating to tax clearance of certain fundamental
2transactions).
3(b) Contents.--A statement of merger shall contain all of
4the following:
5(1) With respect to each merging association that is not
6the surviving association:
7(i) its name;
8(ii) its jurisdiction of formation;
9(iii) its type;
10(iv) if it is a domestic filing association,
11domestic limited liability partnership or registered
12foreign association, the address of its registered
13office, including street and number, if any, in this
14Commonwealth, subject to section 109 (relating to name of
15commercial registered office provider in lieu of
16registered address);
17(v) if it is a domestic association that is not a
18domestic filing association or limited liability
19partnership, the address, including street and number, if
20any, of its principal office; and
21(vi) if it is a nonregistered foreign association,
22the address, including street and number, if any, of:
23(A) its registered or similar office, if any,
24required to be maintained by the law of its
25jurisdiction of formation; or
26(B) if it is not required to maintain a
27registered or similar office, its principal office.
28(2) With respect to the surviving association:
29(i) its name;
30(ii) its jurisdiction of formation;
1(iii) its type;
2(iv) if it is a domestic filing association,
3domestic limited liability partnership or registered
4foreign association, the address of its registered
5office, including street and number, if any, in this
6Commonwealth, subject to section 109;
7(v) if it is a domestic association that is not a
8domestic filing association or limited liability
9partnership, the address, including street and number, if
10any, of its principal office; and
11(vi) if it is a nonregistered foreign association,
12the address, including street and number, if any, of:
13(A) its registered or similar office, if any,
14required to be maintained by the law of its
15jurisdiction of formation; or
16(B) if it is not required to maintain a
17registered or similar office, its principal office.
18(3) If the statement of merger is not to be effective on
19filing, the later date or date and time on which it will
20become effective.
21(4) A statement that the merger was approved in the
22following ways as applicable:
23(i) By a domestic entity that is a merging
24association, in accordance with this chapter.
25(ii) By a foreign merging association, in accordance
26with the law of its jurisdiction of formation.
27(iii) By a domestic merging association that is not
28a domestic entity, in the same manner required by its
29organic law for approving a merger that requires the
30approval of its interest holders.
1(5) If the surviving association exists before the
2merger and is a domestic filing entity, any amendment to its
3public organic record approved as part of the plan of merger.
4(6) If the surviving association is created by the
5merger and is a domestic filing entity, its public organic
6record, as an attachment. The public organic record does not
7need to state the name or address of an incorporator of a
8corporation, organizer of a limited liability company or
9similar person with respect to any other type of entity.
10(7) If the surviving association is created by the
11merger and is a nonregistered foreign association, one of the
12following:
13(i) The street and mailing addresses of its
14registered agent and registered office in its
15jurisdiction of formation if it is a filing entity.
16(ii) The street and mailing address of its principal
17office if it is not a filing entity.
18(8) If the surviving association is created by the
19merger and is a domestic limited liability partnership or a
20domestic limited liability limited partnership that is not
21using the alternative procedure in section 8201(f) (relating
22to scope), its statement of registration, as an attachment.
23(9) If the surviving association is created by the
24merger and is a domestic electing partnership, its statement
25of election.
26(c) Other provisions.--In addition to the requirements of
27subsection (b), a statement of merger may contain any other
28provision not prohibited by law.
29(d) Domestic surviving association.--If the surviving
30association is a domestic entity, its public organic record, if
1any, shall satisfy the requirements of the law of this
2Commonwealth, except that the public organic record does not
3need to be signed and may omit any provision that is not
4required to be included in a restatement of the public organic
5record.
6(e) Filing of plan.--A plan of merger that is signed by all
7of the merging associations and meets all of the requirements of
8subsection (b) may be delivered to the department for filing
9instead of a statement of merger and on filing has the same
10effect. If a plan of merger is filed as provided in this
11subsection, references in this chapter to a statement of merger
12refer to the plan of merger filed under this subsection.
13(f) Effectiveness of statement of merger.--A statement of
14merger is effective as provided in section 136(c) (relating to
15processing of documents by Department of State).
16(g) Effectiveness of merger.--If the surviving association
17is a domestic association, the merger is effective when the
18statement of merger is effective. If the surviving association
19is a foreign association, the merger is effective on the later
20of:
21(1) the date and time provided by the organic law of the
22surviving association; or
23(2) when the statement of merger is effective.
24(h) Cross references.--See sections 134 (relating to
25docketing statement), 135 (relating to requirements to be met by
26filed documents) and 316 (relating to contents of plan).
27§ 336. Effect of merger.
28(a) General rule.--When a merger under this subchapter
29becomes effective, all of the following apply:
30(1) The surviving association continues or comes into
1existence.
2(2) Each merging association that is not the surviving
3association ceases to exist.
4(3) All property of each merging association vests in
5the surviving association without reversion or impairment,
6and the merger shall not constitute a transfer of any of that
7property.
8(4) All debts, obligations and other liabilities of each
9merging association are debts, obligations and other
10liabilities of the surviving association.
11(5) Except as otherwise provided by law or the plan of
12merger, all the rights, privileges, immunities, powers and
13purposes of each merging association vest in the surviving
14association.
15(6) If the surviving association exists before the
16merger, all of the following apply:
17(i) All of its property continues to be vested in it
18without transfer, reversion or impairment.
19(ii) It remains subject to all its debts,
20obligations and other liabilities.
21(iii) All its rights, privileges, immunities, powers
22and purposes continue to be vested in it.
23(iv) Its public organic record, if any, is amended
24to the extent provided in the statement of merger.
25(v) Its private organic rules that are to be in
26record form, if any, are amended to the extent provided
27in the plan of merger.
28(7) The name of the surviving association may be
29substituted for the name of any merging association that is a
30party to any pending action or proceeding.
1(8) If the surviving association is created by the
2merger, its private organic rules are effective and the
3following apply:
4(i) If it is a filing entity, its public organic
5record is effective.
6(ii) If it is a limited liability partnership or a
7limited liability limited partnership that is not using
8the alternative procedure under section 8201(f) (relating
9to scope), its statement of registration is effective.
10(iii) If it is an electing partnership, its
11statement of election is effective.
12(9) The interests in each merging association that are
13to be converted or canceled as provided in the plan of merger
14are converted or canceled, and the interest holders of those
15interests are entitled only to the rights provided to them
16under the plan and to any dissenters rights they have
17pursuant to section 317 (relating to contractual dissenters
18rights in entity transactions) or 333(d) (relating to
19approval of merger).
20(b) No dissolution rights.--Except as provided in the
21organic law or organic rules of a merging association, a merger
22under this subchapter does not give rise to any rights that an
23interest holder, governor or third party would have on a
24dissolution, liquidation or winding up of the merging
25association.
26(c) New interest holder liability.--When a merger under this
27subchapter becomes effective, a person that becomes subject to
28interest holder liability with respect to an association as a
29result of the merger has interest holder liability only to the
30extent provided by the organic law of that association and only
1for those debts, obligations and other liabilities that arise
2after the merger becomes effective.
3(d) Prior interest holder liability.--When a merger under
4this subchapter becomes effective, the interest holder liability
5of a person that ceases to hold an interest in a domestic entity
6that is a merging association with respect to which the person
7had interest holder liability shall be as follows:
8(1) The merger does not discharge any interest holder
9liability under the organic law of the domestic entity to the
10extent the interest holder liability arose before the merger
11became effective.
12(2) The person does not have interest holder liability
13under the organic law of the domestic entity for any debt,
14obligation or other liability that arises after the merger
15becomes effective.
16(3) The organic law of the domestic entity continues to
17apply to the release, collection or discharge of any interest
18holder liability preserved under paragraph (1) as if the
19merger had not occurred.
20(4) The person has whatever rights of contribution from
21any other person as are provided by law other than this
22chapter or the organic rules of the domestic entity with
23respect to any interest holder liability preserved under
24paragraph (1) as if the merger had not occurred.
25(e) Foreign surviving association.--When a merger under this
26subchapter becomes effective, a foreign association that is the
27surviving association may be served with process in this
28Commonwealth for the collection and enforcement of any debts,
29obligations or other liabilities of a domestic entity that is a
30merging association in accordance with applicable law.
1(f) Registration of foreign association.--When a merger
2under this subchapter becomes effective, the registration to do
3business in this Commonwealth of a registered foreign
4association that is a merging association and is not the
5surviving association is canceled.
6(g) Taxes.--Any taxes, interest, penalties and public
7accounts of the Commonwealth claimed against any of the merging
8associations that are settled, assessed or determined prior to
9or after the merger shall be the liability of the surviving
10association.
11SUBCHAPTER D
12INTEREST EXCHANGE
13Sec.
14341. Interest exchange authorized.
15342. Plan of interest exchange.
16343. Approval of interest exchange.
17344. Amendment or abandonment of plan of interest exchange.
18345. Statement of interest exchange; effectiveness.
19346. Effect of interest exchange.
20§ 341. Interest exchange authorized.
21(a) General rule.--Except as provided in section 318
22(relating to excluded entities and transactions) or this
23section, by complying with this subchapter:
24(1) A domestic or foreign association may acquire all of
25one or more classes or series of interests of a domestic
26entity in exchange for interests, securities, obligations,
27money, other property, rights to acquire interests or
28securities or any combination of the foregoing.
29(2) A domestic entity may acquire all of one or more
30classes or series of interests of a foreign association in
1exchange for interests, securities, obligations, money, other
2property, rights to acquire interests or securities or any
3combination of the foregoing.
4(b) Foreign associations.--By complying with the applicable
5provisions of this subchapter:
6(1) A foreign association may be the acquiring
7association in an interest exchange under this subchapter
8regardless of whether the law of its jurisdiction of
9formation authorizes an interest exchange.
10(2) A foreign association may be the acquired
11association in an interest exchange under this subchapter
12only if the interest exchange is authorized by the law of its
13jurisdiction of formation.
14(c) Protected agreements.--If a protected agreement of a
15domestic entity other than a business corporation contains a
16provision that applies to a merger of the entity but does not
17refer to an interest exchange, the provision shall apply to an
18interest exchange in which the domestic entity is the acquired
19association as if the interest exchange were a merger until the
20provision is amended after <-{The Legislative Reference Bureau
21shall insert here the effective date of this chapter} <-July 1,
222015.
23(d) Excluded entities.--The following domestic entities
24shall not be the acquired association in an interest exchange:
25(1) a health maintenance organization;
26(2) a hospital plan corporation; or
27(3) a professional health service organization.
<-28(e) Transitional provision.--A reference to a share exchange
29in a provision of the organic rules of a domestic business
30corporation which took effect before July 1, 2015, shall be
1deemed to include an interest exchange.
<-2(e) (f) Cross reference.--See section 314 (relating to
3regulatory conditions and required notices and approvals).
4§ 342. Plan of interest exchange.
5(a) General rule.--A domestic entity may be the acquired
6association in an interest exchange under this chapter by
7approving a plan of interest exchange. The plan shall be in
8record form and contain all of the following:
9(1) The name and type of the acquired association.
10(2) The name, jurisdiction of formation and type of the
11acquiring association.
12(3) The manner of:
13(i) exchanging the interests in the acquired
14association to be acquired in the interest exchange into
15interests, securities, obligations, money, other
16property, rights to acquire interests or securities, or
17any combination of the foregoing; and
18(ii) canceling, if desired, some or all other
19interests in the acquired association.
20(4) Any proposed amendments to:
21(i) the public organic record, if any, of the
22acquired association; and
23(ii) the private organic rules of the acquired
24association that are or are proposed to be in record
25form.
26(5) Provisions, if any, providing special treatment of
27interests in the acquired association held by any interest
28holder or group of interest holders as authorized by, and
29subject to, section 329 (relating to special treatment of
30interest holders).
1(6) The other terms and conditions of the interest
2exchange.
3(7) Any other provision required by:
4(i) the law of this Commonwealth; or
5(ii) the organic rules of the acquired association.
6(b) Optional contents.--In addition to the requirements of
7subsection (a), a plan of interest exchange may contain any
8other provision not prohibited by law.
9(c) Cross reference.--See section 316(c) (relating to
10contents of plan).
11§ 343. Approval of interest exchange.
12(a) Approval by domestic entities.--A plan of interest
13exchange in which the acquired association is a domestic entity
14shall not be effective unless it has been approved in the
15following ways:
16(1) By the acquired domestic entity in accordance with
17the applicable provisions of Subchapter B (relating to
18approval of entity transactions).
19(2) In record form, by each interest holder of the
20acquired domestic entity that will have interest holder
21liability for debts, obligations and other liabilities that
22arise after the interest exchange becomes effective, unless,
23as to an interest holder that does not approve the plan, both
24of the following apply:
25(i) The organic rules of the entity provide in
26record form for the approval of an interest exchange or a
27merger in which some or all of its interest holders
28become subject to interest holder liability by the vote
29or consent of fewer than all the interest holders.
30(ii) The interest holder voted for or consented in
1record form to that provision of the organic rules or
2became an interest holder after the adoption of that
3provision.
4(3) Except as provided in the organic rules of the
5domestic entity, by the following class votes:
6(i) the holders of any class or series of interests
7of the acquired association to be exchanged or canceled
8shall be entitled to vote as a class on the plan; and
9(ii) the holders of any class or series of interests
10of the acquired association shall be entitled to vote as
11a class on the plan if the plan effects any change in the
12organic rules and those holders would have been entitled
13to vote as a class if the change had been made in any
14other manner.
15(b) Approval by foreign associations.--An interest exchange
16in which the acquired association is a foreign association is
17not effective unless it is approved by the foreign association
18in accordance with the law of its jurisdiction of formation.
19(c) Acquiring association.--Except as provided in its
20organic law or organic rules, the interest holders of the
21acquiring association are not required to approve the interest
22exchange.
23(d) Dissenters rights.--If a shareholder of a domestic
24business corporation that is to be the acquired association in
25an interest exchange objects to the plan of exchange and
26complies with Subchapter D of Chapter 15 (relating to dissenters
27rights), the shareholder shall be entitled to dissenters rights
28to the extent provided in that subchapter.
29(e) Cross references.--See sections 317 (relating to
30contractual dissenters rights in entity transactions) and 329(c)
1(relating to special treatment of interest holders).
2§ 344. Amendment or abandonment of plan of interest exchange.
3(a) General rule.--A plan of interest exchange may be
4amended or abandoned only with the consent of each party to the
5plan, except as otherwise provided in the plan.
6(b) Approval of amendment.--A domestic entity that is the
7acquired association may approve an amendment of a plan of
8interest exchange in one of the following ways:
9(1) In the same manner as the plan was approved, if the
10plan does not provide for the manner in which it may be
11amended.
12(2) By its governors or interest holders in the manner
13provided in the plan, but an interest holder that was
14entitled to vote on or consent to approval of the plan is
15entitled to vote on or consent to any amendment of the plan
16that will change any of the following:
17(i) The amount or kind of interests, securities,
18obligations, money, other property, rights to acquire
19interests or securities, or any combination of the
20foregoing, to be received by any of the interest holders
21of the entity under the plan.
22(ii) The public organic record, if any, or private
23organic rules of the entity that will be in effect
24immediately after the interest exchange becomes
25effective, except for changes that do not require
26approval of the interest holders of the entity under its
27organic law or organic rules.
28(iii) Any other terms or conditions of the plan, if
29the change would:
30(A) increase the interest holder liability to
1which the interest holder will be subject; or
2(B) otherwise adversely affect the interest
3holder in any material respect.
4(c) Approval of abandonment.--After a plan of interest
5exchange has been approved by a domestic entity that is the
6acquired entity and before a statement of interest exchange
7becomes effective, the plan may be abandoned as provided in the
8plan. Unless prohibited by the plan, a domestic entity that is
9the acquired association may abandon the plan in the same manner
10as the plan was approved.
11(d) Statement of abandonment.--If a plan of interest
12exchange is abandoned after a statement of interest exchange has
13been delivered to the department for filing and before the
14statement becomes effective, a statement of abandonment, signed
15by the acquired association, must be delivered to the department
16for filing before the time the statement of interest exchange
17becomes effective. The statement of abandonment shall take
18effect on filing, and the interest exchange shall be abandoned
19and shall not become effective. The statement of abandonment
20shall contain all of the following:
21(1) The name of the acquired association.
22(2) The date on which the statement of interest exchange
23was filed by the department.
24(3) A statement that the interest exchange has been
25abandoned in accordance with this section.
26(e) Cross references.--See sections 134 (relating to
27docketing statement) and 135 (relating to requirements to be met
28by filed documents).
29§ 345. Statement of interest exchange; effectiveness.
30(a) General rule.--If the acquired association is a domestic
1entity, a statement of interest exchange shall be signed by that
2entity and delivered to the department for filing.
3(b) Contents.--A statement of interest exchange shall
4contain all of the following:
5(1) With respect to the acquired association:
6(i) its name;
7(ii) its jurisdiction of formation;
8(iii) its type;
9(iv) if it is a domestic filing association or
10domestic limited liability partnership, the address of
11its registered office, including street and number, if
12any, in this Commonwealth, subject to section 109
13(relating to name of commercial registered office
14provider in lieu of registered address); and
15(v) if it is a domestic association that is not a
16domestic filing association or limited liability
17partnership, the address, including street and number, if
18any, of its principal office.
19(2) With respect to the acquiring association:
20(i) its name;
21(ii) its jurisdiction of formation;
22(iii) its type;
23(iv) if it is a domestic filing association,
24domestic limited liability partnership or registered
25foreign association, the address of its registered
26office, including street and number, if any, in this
27Commonwealth, subject to section 109;
28(v) if it is a domestic association that is not a
29domestic filing association or limited liability
30partnership, the address, including street and number, if
1any, of its principal office; and
2(vi) if it is a nonregistered foreign association,
3the address, including street and number, if any, of:
4(A) its registered or similar office, if any,
5required to be maintained by the law of its
6jurisdiction of formation; or
7(B) if it is not required to maintain a
8registered or similar office, its principal office.
9(3) If the statement of interest exchange is not to be
10effective on filing, the later date or date and time on which
11it will become effective.
12(4) A statement that the plan of interest exchange was
13approved by the acquired association in accordance with this
14chapter.
15(5) Any amendments to the public organic record of the
16acquired association approved as part of the plan of interest
17exchange.
18(c) Other provisions.--In addition to the requirements of
19subsection (b), a statement of interest exchange may contain any
20other provision not prohibited by law.
21(d) Filing of plan.--A plan of interest exchange that is
22signed by the domestic entity that is the acquired association
23and that meets all of the requirements of subsection (b) may be
24delivered to the department for filing instead of a statement of
25interest exchange and on filing shall have the same effect. If a
26plan of interest exchange is delivered to the department for
27filing as provided in this subsection, references in this
28chapter to a statement of interest exchange shall refer to the
29plan of interest exchange filed under this subsection.
30(e) Effectiveness.--An interest exchange in which the
1acquired association is a domestic entity is effective when the
2statement of interest exchange is effective as provided in
3section 136(c) (relating to processing of documents by
4Department of State).
5(f) Cross references.--See sections 134 (relating to
6docketing statement) and 135 (relating to requirements to be met
7by filed documents).
8§ 346. Effect of interest exchange.
9(a) General rule.--When an interest exchange in which the
10acquired association is a domestic entity becomes effective, all
11of the following apply:
12(1) Interests in the acquired association are exchanged
13or canceled as provided in the plan of exchange, and the
14interest holders of those interests are entitled only to the
15rights provided to them under the plan and to any dissenters
16rights they have pursuant to section 317 (relating to
17contractual dissenters rights in entity transactions) or
18343(d) (relating to approval of interest exchange).
19(2) The acquiring association becomes the interest
20holder of the interests in the acquired association stated in
21the plan of interest exchange to be acquired by the acquiring
22entity.
23(3) The public organic record, if any, of the acquired
24association is amended to the extent provided in the
25statement of interest exchange.
26(4) The private organic rules of the acquired
27association that are to be in record form, if any, are
28amended to the extent provided in the plan of interest
29exchange.
30(b) <-Absence of No dissolution rights.--Except as provided in
1the organic rules of the acquired association, the interest
2exchange shall not give rise to any rights that an interest
3holder, governor or third party would have upon a dissolution,
4liquidation or winding up of the acquired association.
5(c) New interest holder liability.--When an interest
6exchange becomes effective, a person that becomes subject to
7interest holder liability with respect to an association as a
8result of the interest exchange has interest holder liability
9only to the extent provided by the organic law of the
10association and only for those debts, obligations and other
11liabilities that arise after the interest exchange becomes
12effective.
13(d) Prior interest holder liability.--When an interest
14exchange becomes effective, the interest holder liability of a
15person that ceases to hold an interest in a domestic acquired
16association with respect to which the person had interest holder
17liability is as follows:
18(1) The interest exchange does not discharge any
19interest holder liability under the organic law of the
20domestic acquired association to the extent the interest
21holder liability arose before the interest exchange became
22effective.
23(2) The person does not have interest holder liability
24under the organic law of the domestic acquired association
25for any debt, obligation or other liability that arises after
26the interest exchange becomes effective.
27(3) The organic law of the domestic acquired association
28continues to apply to the release, collection or discharge of
29any interest holder liability preserved under paragraph (1)
30as if the interest exchange had not occurred.
1(4) The person has whatever rights of contribution from
2any other person as are provided by law other than this title
3or the organic law or organic rules of the domestic acquired
4association with respect to any interest holder liability
5preserved under paragraph (1) as if the interest exchange had
6not occurred.
7SUBCHAPTER E
8CONVERSION
9Sec.
10351. Conversion authorized.
11352. Plan of conversion.
12353. Approval of conversion.
13354. Amendment or abandonment of plan of conversion.
14355. Statement of conversion; effectiveness.
15356. Effect of conversion.
16§ 351. Conversion authorized.
17(a) Domestic converting associations.--Except as provided in
18section 318 (relating to excluded entities and transactions) or
19this section, by complying with this chapter:
20(1) A domestic entity may become a domestic entity of a
21different type or a domestic banking institution.
22(2) A domestic banking institution may become a domestic
23association of a different type.
24(3) A domestic entity may become a foreign association
25of a different type, if the conversion is authorized by the
26law of the foreign jurisdiction.
27(b) Foreign converting associations.--By complying with the
28applicable provisions of this subchapter, a foreign association
29may become a domestic entity of a different type if the
30conversion is authorized by the law of the jurisdiction of
1formation of the foreign association.
2(c) Protected governance agreements.--If a protected
3governance agreement that is binding on a domestic entity
4immediately before the effectiveness of a transaction under this
5chapter contains a provision that applies to a merger of the
6entity but does not refer to a conversion, the provision shall
7apply to a conversion of the entity as if the conversion were a
8merger until the provision is amended after <-{the Legislative
9Reference Bureau shall insert here the effective date of this
10chapter} <-July 1, 2015.
11(d) Exceptions.--This subchapter may not be used to
12accomplish a transaction that has the same effect as a
13transaction under any of the following provisions:
14(1) Section 7104 (relating to election of an existing
15business corporation to become a cooperative corporation).
16(2) Section 7105 (relating to termination of status as a
17cooperative corporation for profit).
18(3) Section 7106 (relating to election of an existing
19nonprofit corporation to become a cooperative corporation).
20(4) Section 7107 (relating to termination of nonprofit
21cooperative corporation status).
22(e) Cross reference.--See section 314 (relating to
23regulatory conditions and required notices and approvals).
24§ 352. Plan of conversion.
25(a) General rule.--A domestic entity or domestic banking
26institution may be a party to a conversion by approving a plan
27of conversion. The plan shall be in record form and contain all
28of the following:
29(1) The name and type of the converting association.
30(2) The name, jurisdiction of formation and type of
1converted association.
2(3) The manner of:
3(i) canceling, if desired, some, but less than all,
4of the interests in the converting association;
5(ii) converting at least some of the interests in
6the converting association into interests in the
7converted association; and
8(iii) converting the interests in the converting
9association not canceled under subparagraph (i) or
10converted under subparagraph (ii) into interests,
11securities, obligations, money <-or, other property, rights
12to acquire interests or securities or any combination of
13the foregoing.
14(4) The proposed public organic record of the converted
15association if it will be a filing entity.
16(5) The full text of the private organic rules of the
17converted association that are proposed to be in record form.
18(6) Provisions, if any, providing special treatment of
19interests in the converting association held by any interest
20holder or group of interest holders as authorized by and
21subject to section 329 (relating to special treatment of
22interest holders).
23(7) The other terms and conditions of the conversion.
24(8) Any other provision required by:
25(i) the law of this Commonwealth;
26(ii) the law of the jurisdiction of formation of the
27converted association if it is to be a foreign
28association; or
29(iii) the organic rules of the converting
30association.
1(b) Optional contents.--In addition to the requirements of
2subsection (a), a plan of conversion may contain any other
3provision not prohibited by law.
4(c) Terms of interests.--The ownership, voting and other
5rights of the interest holders in the converted association
6shall be substantially the same as they were in the converting
7association except:
8(1) as provided in the plan of conversion pursuant to
9section 329;
10(2) as provided in the express terms of the organic
11rules of the converted association that are in record form;
12or
13(3) to the extent a difference in those rights is
14required by a provision of the organic law of the converted
15association that cannot be varied in its organic rules.
16(d) Cross reference.--See section 316(c) (relating to
17contents of plan).
18§ 353. Approval of conversion.
19(a) Approval by domestic associations.--A plan of conversion
20in which the converting association is a domestic entity or
21domestic banking institution shall not be effective unless it
22has been approved in the following ways:
23(1) In the case of a domestic entity, in accordance with
24the applicable provisions of Subchapter B (relating to
25approval of entity transactions).
26(2) In the case of a domestic banking institution that
27is a corporation, by at least:
28(i) In the case of a mutual savings bank:
29(A) two-thirds of the trustees present at a
30meeting at which the plan is proposed; and
1(B) two-thirds of all the trustees at a
2subsequent meeting held upon not less than ten days'
3notice to all the trustees.
4(ii) In the case of any other institution:
5(A) a majority of the directors; and
6(B) the shareholders entitled to cast at least
7two-thirds of the votes which all shareholders are
8entitled to cast thereon, and, if any class of shares
9is entitled to vote thereon as a class, the holders
10of at least two-thirds of the outstanding shares of
11such class, at a meeting held upon not less than ten
12days' notice to all shareholders.
13(3) In record form, by each interest holder, if any, of
14the converting association that will have interest holder
15liability for debts, obligations and other liabilities that
16arise after the conversion becomes effective, unless, as to
17an interest holder that does not approve the plan, both of
18the following apply:
19(i) The organic rules of the converting association
20provide in record form for the approval of a conversion
21or a merger in which some or all of its interest holders
22become subject to interest holder liability by the vote
23or consent of fewer than all of the interest holders.
24(ii) The interest holder voted for or consented in
25record form to that provision of the organic rules or
26became an interest holder after the adoption of that
27provision.
28(b) Approval by foreign associations.--A conversion in which
29the converting association is a foreign association shall not be
30effective unless it is approved by the foreign association in
1accordance with the law of its jurisdiction of formation.
2(c) Dissenters rights.--The following apply with respect to
3the rights of an interest holder of the converting association:
4(1) A shareholder of a domestic business corporation
5that is to be a converting association shall be entitled to
6dissenters rights if:
7(i) the shareholder objects to the plan of
8conversion and complies with Subchapter D of Chapter 15
9(relating to dissenters rights); and
10(ii) the conversion involves a change in the rights
11of the shareholder pursuant to section 352(c)(1) or (2)
12(relating to plan of conversion).
13(2) A shareholder of a domestic banking institution that
14is to be a converting association shall be entitled to the
15rights provided in section 1222 of the act of November 30,
161965 (P.L.847, No.356), known as the Banking Code of 1965,
17if:
18(i) the shareholder objects to the plan of
19conversion and complies with section 1222 of the Banking
20Code of 1965; and
21(ii) the conversion involves a change in the rights
22of the shareholder pursuant to section 352(c)(1) or (2).
23(3) See sections 317 (relating to contractual dissenters
24rights in entity transactions) and 329 (relating to special
25treatment of interest holders).
26§ 354. Amendment or abandonment of plan of conversion.
27(a) Approval of amendment.--A plan of conversion in which
28the converting association is a domestic association may be
29amended in one of the following ways:
30(1) In the same manner as the plan was approved, if the
1plan does not provide for the manner in which it may be
2amended.
3(2) By its governors or interest holders in the manner
4provided in the plan, but an interest holder that was
5entitled to vote on or consent to approval of the plan is
6entitled to vote on or consent to any amendment of the plan
7that will change any of the following:
8(i) The amount or kind of interests, securities,
9obligations, money, other property, rights to acquire
10interests or securities, or any combination of the
11foregoing, to be received by any of the interest holders
12of the converting association under the plan.
13(ii) The public organic record, if any, or private
14organic rules of the converted association that will be
15in effect immediately after the conversion becomes
16effective, except for changes that do not require
17approval of the interest holders of the converted
18association under its organic law or organic rules.
19(iii) Any other terms or conditions of the plan, if
20the change would:
21(A) increase the interest holder liability to
22which the interest holder will be subject; or
23(B) otherwise adversely affect the interest
24holder in any material respect.
25(b) Approval of abandonment.--After a plan of conversion has
26been approved by a converting association that is a domestic
27association and before a statement of conversion becomes
28effective, the plan may be abandoned as provided in the plan.
29Unless prohibited by the plan, a domestic converting association
30may abandon the plan in the same manner as the plan was
1approved.
2(c) Statement of abandonment.--If a plan of conversion is
3abandoned after a statement of conversion has been delivered to
4the department for filing and before the statement of conversion
5becomes effective, a statement of abandonment, signed by the
6converting association, must be delivered to the department for
7filing before the statement of conversion becomes effective. The
8statement of abandonment shall take effect on filing, and the
9conversion shall be abandoned and shall not become effective.
10The statement of abandonment shall contain all of the following:
11(1) The name of the converting association.
12(2) The date on which the statement of conversion was
13delivered to the department for filing.
14(3) A statement that the conversion has been abandoned
15in accordance with this section.
16(d) Cross references.--See sections 134 (relating to
17docketing statement) and 135 (relating to requirements to be met
18by filed documents).
19§ 355. Statement of conversion; effectiveness.
20(a) General rule.--A statement of conversion shall be signed
21by the converting association and delivered to the department
22for filing along with the certificates, if any, required by
23section 139 (relating to tax clearance of certain fundamental
24transactions).
25(b) Contents.--A statement of conversion shall contain all
26of the following:
27(1) With respect to the converting association:
28(i) its name;
29(ii) its jurisdiction of formation;
30(iii) its type;
1(iv) the date on which it was first created,
2incorporated, formed or otherwise came into existence;
3(v) if it is a domestic filing association, the
4statute under which it was first created, incorporated,
5formed or otherwise came into existence;
6(vi) if it is a domestic filing association,
7domestic limited liability partnership or registered
8foreign association:
9(A) the address of its registered office,
10including street and number, if any, in this
11Commonwealth, subject to section 109 (relating to
12name of commercial registered office provider in lieu
13of registered address); or
14(B) if it is not required to maintain a
15registered office in this Commonwealth, the address,
16including street and number, if any, of its principal
17office;
18(vii) if it is a domestic association that is not a
19domestic filing association or limited liability
20partnership, the address, including street and number, if
21any, of its principal office; and
22(viii) if it is a nonregistered foreign association,
23the address, including street and number, if any, of:
24(A) its registered or similar office, if any,
25required to be maintained by the law of its
26jurisdiction of formation; or
27(B) if it is not required to maintain a
28registered or similar office, its principal office.
29(2) With respect to the converted association:
30(i) its name;
1(ii) its jurisdiction of formation;
2(iii) its type;
3(iv) if it is a domestic filing association,
4domestic limited liability partnership or registered
5foreign association:
6(A) the address of its registered office,
7including street and number, if any, in this
8Commonwealth, subject to section 109; or
9(B) if it is not required to maintain a
10registered office in this Commonwealth, the address,
11including street and number, if any, of its principal
12office;
13(v) if it is a domestic association that is not a
14domestic filing association or limited liability
15partnership, the address, including street and number, if
16any, of its principal office; and
17(vi) if it is a nonregistered foreign association,
18the address, including street and number, if any, of:
19(A) its registered or similar office, if any,
20required to be maintained by the law of its
21jurisdiction of formation; or
22(B) if it is not required to maintain a
23registered or similar office, its principal office.
24(3) If the statement of conversion is not to be
25effective on filing, the later date or date and time on which
26it will become effective.
27(4) If the converting association is a domestic
28association, a statement that the plan of conversion was
29approved in accordance with this chapter or, if the
30converting association is a foreign association, a statement
1that the conversion was approved by the foreign association
2in accordance with the law of its jurisdiction of formation.
3(5) If the converted association is a domestic filing
4entity or domestic banking institution, its public organic
5record as an attachment. The public organic record does not
6need to state the name or address of an incorporator of a
7corporation, organizer of a limited liability company or
8similar person with respect to any other type of entity.
9(6) If the converted association is a domestic limited
10liability partnership or a domestic limited liability limited
11partnership that is not using the alternative procedure in
12section 8201(f) (relating to scope), its statement of
13registration as an attachment.
14(7) If the converted association is a domestic electing
15partnership, its statement of election as an attachment.
16(8) If the converted association is a nonregistered
17foreign association, one of the following:
18(i) The street and mailing addresses of its
19registered agent and registered office in its
20jurisdiction of formation if it is a filing entity.
21(ii) The street and mailing address of its principal
22office if it is not a filing entity.
23(c) Other provisions.--In addition to the requirements of
24subsection (b), a statement of conversion may contain any other
25provision not prohibited by law.
26(d) Domestic converted association.--If the converted
27association is a domestic association, its public organic
28record, if any, must satisfy the requirements of the law of this
29Commonwealth, except that the public organic record does not
30need to be signed and may omit any provision that is not
1required to be included in a restatement of the public organic
2record.
3(e) Filing of plan.--A plan of conversion that is signed by
4the converting association and meets all the requirements of
5subsection (b) may be delivered to the department for filing
6instead of a statement of conversion and on filing has the same
7effect. If a plan of conversion is filed as provided in this
8subsection, references in this chapter to a statement of
9conversion refer to the plan of conversion filed under this
10subsection.
11(f) Effectiveness of statement of conversion.--A statement
12of conversion is effective as provided in section 136(c)
13(relating to processing of documents by Department of State).
14(g) Effectiveness of conversion.--If the converted
15association is a domestic association, the conversion is
16effective when the statement of conversion is effective. If the
17converted association is a foreign association, the conversion
18is effective on the later of:
19(1) the date and time provided by the organic law of the
20converted association; or
21(2) when the statement of conversion is effective.
22(h) Cross references.--See sections 134 (relating to
23docketing statement) and 135 (relating to requirements to be met
24by filed documents).
25§ 356. Effect of conversion.
26(a) General rule.--When a conversion becomes effective, all
27of the following apply:
28(1) The converted association is:
29(i) Organized under and subject to the organic law
30of the converted association.
1(ii) The same association without interruption as
2the converting association.
3(iii) Deemed to have commenced its existence on the
4date the converting association commenced its existence
5in the jurisdiction in which the converting association
6was first created, incorporated, formed or otherwise came
7into existence, except for purposes of determining how
8the converted association is taxed.
9(2) All property of the converting association continues
10to be vested in the converted association without reversion
11or impairment, and the conversion shall not constitute a
12transfer of any of that property.
13(3) All debts, obligations and other liabilities of the
14converting association continue as debts, obligations and
15other liabilities of the converted association.
16(4) Except as provided by law or the plan of conversion,
17all of the rights, privileges, immunities, powers and
18purposes of the converting association continue to be vested
19without change in the converted association.
20(5) The name of the converted association may be
21substituted for the name of the converting association in any
22pending action or proceeding.
23(6) If a converted association is a filing association,
24its public organic record is effective.
25(7) If the converted association is a limited liability
26partnership or a limited liability limited partnership that
27is not using the alternative procedure in section 8201(f)
28(relating to scope), its statement of registration is
29effective.
30(8) If the converted association is an electing
1partnership, its statement of election is effective.
2(9) Any private organic rules of the converted
3association that are to be in record form and were approved
4as part of the plan of conversion are effective.
5(10) The interests in the converting association are
6converted or canceled in accordance with and as provided in
7the plan of conversion, and the interest holders of the
8converting association are entitled only to the rights
9provided to them under the plan and to any dissenters rights
10they have pursuant to section 317 (relating to contractual
11dissenters rights in entity transactions) or 353(c) (relating
12to approval of conversion).
13(11) Except as otherwise provided in the plan of
14conversion or organic rules pursuant to section 352(c)
15(relating to plan of conversion), the conversion does not
16constitute and shall not be deemed to result in a change of
17control of the converting association and the converted
18association shall remain under the control of the same
19persons that controlled the converting association
20immediately before the conversion.
21(b) No other rights.--The conversion does not give rise to
22any rights:
23(1) that a third party would have upon a transfer of
24assets, merger, dissolution, liquidation or winding up of the
25converting association, except as provided in subsection(a)
26(11); or
27(2) that an interest holder or governor would have upon
28a dissolution, liquidation or winding up of the converting
29association, except as provided in the organic law or organic
30rules of the converting association.
1(c) New interest holder liability.--When a conversion
2becomes effective, a person that becomes subject to interest
3holder liability with respect to a domestic association as a
4result of the conversion has interest holder liability only to
5the extent provided by the organic law of the association and
6only for those debts, obligations and other liabilities that
7arise after the conversion becomes effective.
8(d) Prior interest holder liability.--When a conversion
9becomes effective, the interest holder liability of a person
10that ceases to hold an interest in a domestic converting
11association with respect to which the person had interest holder
12liability is as follows:
13(1) The conversion does not discharge any interest
14holder liability under the organic law of the domestic
15converting association to the extent the interest holder
16liability arose before the conversion became effective.
17(2) The person does not have interest holder liability
18under the organic law of the domestic converting association
19for any debt, obligation or other liability that arises after
20the conversion becomes effective.
21(3) The organic law of the domestic converting
22association continues to apply to the release, collection or
23discharge of any interest holder liability preserved under
24paragraph (1) as if the conversion had not occurred.
25(4) The person has whatever rights of contribution from
26any other person as are provided by other law or the organic
27law or organic rules of the domestic converting association
28with respect to any interest holder liability preserved under
29paragraph (1) as if the conversion had not occurred.
30(e) Foreign converted association.--When a conversion
1becomes effective, a foreign association that is the converted
2association may be served with process in this Commonwealth for
3the collection and enforcement of any of its debts, obligations
4and other liabilities in accordance with applicable law.
5(f) Association not dissolved.--A conversion does not
6require a domestic converting association to liquidate, dissolve
7or wind up its affairs and does not constitute or cause the
8liquidation or dissolution of the association.
9(g) Taxes.--Any taxes, interest, penalties and public
10accounts of the Commonwealth claimed against the converting
11association that are settled, assessed or determined prior to or
12after the conversion shall be the liability of the converted
13association.
14(h) Cross references.--See sections 416 (relating to
15withdrawal deemed on certain transactions) and 417 (relating to
16required withdrawal on certain transactions).
17SUBCHAPTER F
18DIVISION
19Sec.
20361. Division authorized.
21362. Plan of division.
22363. Approval of division.
23364. Division without interest holder approval.
24365. Amendment or abandonment of plan of division.
25366. Statement of division; effectiveness.
26367. Effect of division.
27368. Allocation of liabilities in division.
28§ 361. Division authorized.
29(a) Domestic entities.--Except as provided in section 318
30(relating to excluded entities and transactions) or this
1section, by complying with this subchapter, a domestic entity
2may divide into:
3(1) the dividing <-entity association and one or more new
4associations that are either domestic entities or foreign
5associations; or
6(2) two or more new associations that are either
7domestic entities or foreign associations.
8(b) Foreign associations.--
9(1) A foreign association may be created by the division
10of a domestic entity only if the division is authorized by
11the law of the jurisdiction of formation of the foreign
12association.
13(2) If the division is authorized by the law of the
14jurisdiction of formation of the foreign association, one or
15more of the resulting associations created in a division of a
16foreign association may be a domestic entity.
17(c) Exception.--A domestic banking institution that is a
18domestic entity may be a dividing association only if all of the
19resulting associations are domestic banking institutions.
20(d) Cross reference.--See section 314 (relating to
21regulatory conditions and required notices and approvals).
22§ 362. Plan of division.
23(a) General rule.--A domestic entity may become a dividing
24association under this chapter by approving a plan of division.
25The plan shall be in record form and contain all of the
26following:
27(1) The name and type of the dividing association.
28(2) A statement as to whether the dividing association
29will survive the division.
30(3) The name, jurisdiction of formation and type of each
1new <-resulting association.
2(4) The manner of:
3(i) If the dividing association survives the
4division and it is desired:
5(A) Canceling some, but less than all, of the
6interests in the dividing association.
7(B) Converting some, but less than all, of the
8interests in the dividing association into interests,
9securities, obligations, money, other property,
10rights to acquire interests or securities, or any
11combination of the foregoing.
12(ii) If the dividing association does not survive
13the division, canceling or converting the interests in
14the dividing association into interests, securities,
15obligations, money <-or, other property, rights to acquire
16interests or securities, or any combination of the
17foregoing.
18(iii) Allocating between or among the resulting
19associations the property of the dividing association
20that will not be owned by all of the resulting
21associations as tenants in common pursuant to section
22367(a)(4) (relating to effect of division) and those
23liabilities of the dividing association as to which not
24all of the resulting associations will be liable jointly
25and severally pursuant to section 368(a)(3) (relating to
26allocation of liabilities in division).
27(iv) Distributing the interests of the new
28associations.
29(5) For each new association:
30(i) its proposed public organic record if it will be
1a filing association; and
2(ii) the full text of its private organic rules that
3will be in record form.
4(6) If the dividing association will survive the
5division, any proposed amendments to its public organic
6record or private organic rules that are or will be in record
7form.
8(7) Provisions, if any, providing special treatment of
9interests in the dividing association held by any interest
10holder or group of interest holders as authorized by and
11subject to section 329 (relating to special treatment of
12interest holders).
13(8) The other terms and conditions of the division.
14(9) Any other provision required by:
15(i) the law of this Commonwealth;
16(ii) the law of the jurisdiction of formation of any
17of the resulting associations; or
18(iii) the organic rules of the dividing association.
19(b) Optional contents.--In addition to the requirements of
20subsection (a), a plan of division may contain any other
21provision not prohibited by law.
22(c) Description of property and liabilities.--It shall not
23be necessary for a plan of division to list each individual
24liability or item of property of the dividing association to be
25allocated to a resulting association so long as the liabilities
26and property are described in a reasonable manner.
27(d) Cross reference.--See section 316(c) (relating to
28contents of plan).
29§ 363. Approval of division.
30(a) Approval by domestic entities.--Except as provided in
1section 364 (relating to division without interest holder
2approval) or subsection (d), a plan of division in which the
3dividing association is a domestic entity is not effective
4unless it has been approved in both of the following ways:
5(1) The plan is approved by the domestic entity in
6accordance with the applicable provisions of Subchapter B
7(relating to approval of entity transactions).
8(2) The plan is approved in record form by each interest
9holder, if any, of the domestic entity that will have
10interest holder liability for debts, obligations and other
11liabilities that arise after the division becomes effective,
12unless, as to an interest holder that does not approve the
13plan, both of the following apply:
14(i) The organic rules of the domestic entity provide
15in record form for the approval of a division in which
16some or all of its interest holders become subject to
17interest holder liability by the vote or consent of fewer
18than all of the interest holders.
19(ii) The interest holder voted for or consented in
20record form to that provision of the organic rules or
21became an interest holder after the adoption of the
22provision.
23(b) Approval by foreign associations.--A division of a
24foreign association in which one or more of the resulting
<-25entities associations is a domestic entity is not effective
26unless it is approved by the foreign association in accordance
27with the law of its jurisdiction of formation.
28(c) Dissenters rights.--If a shareholder of a domestic
29business corporation that is to be a dividing association
30objects to the plan of division and complies with Subchapter D
1of Chapter 15 (relating to dissenters rights), the shareholder
2shall be entitled to dissenters rights to the extent provided in
3that subchapter. See sections 317 (relating to contractual
4dissenters rights in entity transactions) and 329 (relating to
5special treatment of interest holders).
6(d) Transitional approval requirements.--
7(1) If a provision of the organic rules of a dividing
8association that is a domestic entity of the type described
9was adopted before the date indicated and requires for the
10proposal or adoption of a plan of merger a specific number or
11percentage of votes of governors or interest holders or other
12special procedures, a plan of division shall not be proposed
13or adopted by the governors or interest holders without that
14number or percentage of votes or compliance with the other
15special procedures:
16(i) For a dividing association that is a domestic
17business corporation, before October 1, 1989.
18(ii) For a dividing association that is a general
19partnership, before <-{the Legislative Reference Bureau
20shall insert here the effective date of this chapter}
<-21July 1, 2015.
22(iii) For a dividing association that is a limited
23partnership, before February 5, 1995.
24(iv) For a dividing association that is an
25unincorporated nonprofit association, before <-{the
26Legislative Reference Bureau shall insert here the
27effective date of this chapter} <-July 1, 2015.
28(2) If a provision of any debt securities, notes or
29similar evidences of indebtedness for money borrowed, whether
30secured or unsecured, indentures or other contracts that were
1issued, incurred or executed by a dividing association that
2is a domestic entity of the type described before the date
3indicated, and the provision requires the consent of the
4obligee to a merger of the dividing association or treats
5such a merger as a default, the provision shall apply to a
6division of the dividing association as if it were a merger:
7(i) For a dividing association that is a domestic
8business corporation, before August 21, 2001.
9(ii) For a dividing association that is a general
10partnership, before <-{the Legislative Reference Bureau
11shall insert here the effective date of this section}
<-12July 1, 2015.
13(iii) For a dividing association that is a limited
14partnership, before <-{the Legislative Reference Bureau
15shall insert here the effective date of this section}
<-16July 1, 2015.
17(iv) For a dividing association that is an
18unincorporated nonprofit association, before <-{the
19Legislative Reference Bureau shall insert here the
20effective date of this section} <-July 1, 2015.
21(3) When a provision described in paragraph (1) or (2)
22has been amended after the applicable date, the provision
23shall cease to be subject to the respective paragraph and
24shall thereafter apply only in accordance with its express
25terms.
26§ 364. Division without interest holder approval.
27(a) General rule.--Unless otherwise restricted by its
28organic rules, a plan of division of a domestic dividing
29association shall not require the approval of the interest
30holders of the dividing association if:
1(1) The plan does not do any of the following:
2(i) alter the jurisdiction of formation of the
3dividing association;
4(ii) provide for special treatment; or
5(iii) amend in any respect the provisions of the
6public organic record of the dividing association, except
7amendments which may be made without the approval of the
8interest holders.
9(2) Either:
10(i) the dividing association survives the division
11and all the interests and other securities and
12obligations, if any, of all of the new associations are
13owned solely by the dividing association; or
14(ii) the interests in each new association are
15distributed as provided in subsection (b).
16(b) Distribution of interests.--The requirements for
17distributing interests in each new association referred to in
18subsection (a)(2)(ii) are as follows:
19(1) if the dividing association is not a limited
20partnership, the dividing association has only one class of
21interests outstanding and the interests and other securities
22and obligations, if any, of each new association are
23distributed pro rata to the interest holders of the dividing
24association; or
25(2) if the dividing association is a limited
26partnership:
27(i) it has only one class of general partners and
28one class of limited partners;
29(ii) each new association is a limited partnership;
30and
1(iii) all of the following apply:
2(A) the general partner interests in each new
3association are distributed pro rata to the general
4partners of the dividing limited partnership;
5(B) the limited partner interests in each new
6association are distributed pro rata to the limited
7partners of the dividing limited partnership; and
8(C) no securities of obligations of any of the
9new associations are distributed to any of the
10interest holders of the dividing limited partnership.
11§ 365. Amendment or abandonment of plan of division.
12(a) Approval of amendment.--A plan of division in which the
13dividing association is a domestic entity may be amended in one
14of the following ways:
15(1) In the same manner as the plan was approved, if the
16plan does not provide for the manner in which it may be
17amended.
18(2) By its governors or interest holders in the manner
19provided in the plan, but an interest holder that was
20entitled to vote on or consent to approval of the plan is
21entitled to vote on or consent to any amendment of the plan
22that will change any of the following:
23(i) The amount or kind of interests, securities,
24obligations, money, other property, rights to acquire
25interests or securities, or any combination of the
26foregoing, to be received by any of the interest holders
27of the dividing association under the plan.
28(ii) The public organic record, if any, or private
29organic rules of any of the resulting associations that
30will be in effect immediately after the division becomes
1effective, except for changes that do not require
2approval of the interest holders of the resulting
3association under its organic law or organic rules.
4(iii) Any other terms or conditions of the plan, if
5the change would:
6(A) increase the interest holder liability to
7which the interest holder will be subject; or
8(B) otherwise adversely affect the interest
9holder in any material respect.
10(b) Approval of abandonment.--After a plan of division has
11been approved by a domestic entity that is the dividing
12association and before a statement of division becomes
13effective, the plan may be abandoned as provided in the plan.
14Unless prohibited by the plan, a domestic entity that is the
15dividing association may abandon the plan in the same manner as
16the plan was approved.
17(c) Statement of abandonment.--If a plan of division is
18abandoned after a statement of division has been delivered to
19the department for filing and before the statement becomes
20effective, a statement of abandonment, signed by the dividing
21association, must be delivered to the department for filing
22before the time the statement of division becomes effective. The
23statement of abandonment shall take effect on filing, and the
24division shall be abandoned and shall not become effective. The
25statement of abandonment shall contain all of the following:
26(1) The name of the dividing association.
27(2) The date on which the statement of division was
28filed by the department.
29(3) A statement that the division has been abandoned in
30accordance with this section.
1(d) Cross references.--See sections 134 (relating to
2docketing statement) and 135 (relating to requirements to be met
3by filed documents).
4§ 366. Statement of division; effectiveness.
5(a) General rule.--A statement of division shall be signed
6by the dividing association and delivered to the department for
7filing along with the certificates, if any, required by section
8139 (relating to tax clearance of certain fundamental
9transactions).
10(b) Contents.--A statement of division shall contain all of
11the following:
12(1) With respect to the dividing association:
13(i) its name;
14(ii) its jurisdiction of formation;
15(iii) its type;
16(iv) if it is a domestic filing association,
17domestic limited liability partnership or registered
18foreign association, the address of its registered
19office, including street and number, if any, in this
20Commonwealth, subject to section 109 (relating to name of
21commercial registered office provider in lieu of
22registered address);
23(v) if it is a domestic association that is not a
24domestic filing association or limited liability
25partnership, the address, including street and number, if
26any, of its principal office; and
27(vi) if it is a nonregistered foreign association,
28the address, including street and number, if any, of:
29(A) its registered or similar office, if any,
30required to be maintained by the law of its
1jurisdiction of formation; or
2(B) if it is not required to maintain a
3registered or similar office, its principal office.
4(2) A statement as to whether the dividing association
5will survive the division.
6(3) With respect to each resulting association created
7by the division:
8(i) its name;
9(ii) its jurisdiction of formation;
10(iii) its type;
11(iv) if it is a domestic filing association,
12domestic limited liability partnership or registered
13foreign association, the address of its registered
14office, including street and number, if any, in this
15Commonwealth, subject to section 109;
16(v) if it is a domestic association that is not a
17domestic filing association or limited liability
18partnership, the address, including street and number, if
19any, of its principal office; and
20(vi) if it is a nonregistered foreign association,
21the address, including street and number, if any, of:
22(A) its registered or similar office, if any,
23required to be maintained by the law of its
24jurisdiction of formation; or
25(B) if it is not required to maintain a
26registered or similar office, its principal office.
27(4) If the statement of division is not to be effective
28on filing, the later date or date and time on which it will
29become effective.
30(5) A statement that the division was approved in the
1following ways:
2(i) By a dividing association that is a domestic
3entity, in accordance with this chapter.
4(ii) By a dividing association that is a foreign
5association, in accordance with the law of its
6jurisdiction of formation.
7(6) If the dividing association is a domestic filing
8entity and survives the division, any amendment to its public
9organic record approved as part of the plan of division.
10(7) For each resulting association created by the
11division that is a domestic entity, its public organic
12record, if any, as an attachment. The public organic record
13does not need to state the name or address of an incorporator
14of a corporation, organizer of a limited liability company or
15similar person with respect to any other type of entity.
16(8) For each new association that is a domestic limited
17liability partnership or a domestic limited liability limited
18partnership that is not using the alternative procedure in
19section 8201(f) (relating to scope), its statement of
20registration as an attachment.
21(9) For each new association that is an electing
22partnership, its statement of election as an attachment.
23(10) The property and liabilities of the dividing
24association that are to be allocated to each resulting
25association, but it shall not be necessary to list in the
26statement of division each individual liability or item of
27property of the dividing association to be allocated to a
28resulting association so long as the liabilities and property
29are described in a reasonable manner.
30(c) Other provisions.--In addition to the requirements of
1subsection (b), a statement of division may contain any other
2provision not prohibited by law.
3(d) New domestic entity.--If a new association is a domestic
4entity, its public organic record, if any, must satisfy the
5requirements of the law of this Commonwealth, except that it
6does not need to be signed and may omit any provision that is
7not required to be included in a restatement of the public
8organic record.
9(e) Filing of plan.--A plan of division that is signed by
10the dividing association and meets all of the requirements of
11subsection (b) may be delivered to the department for filing
12instead of a statement of division and on filing has the same
13effect. If a plan of division is filed as provided in this
14subsection, references in this chapter to a statement of
15division refer to the plan of division filed under this
16subsection.
17(f) Effectiveness of statement of division.--A statement of
18division is effective as provided in section 136(c) (relating to
19processing of documents by Department of State).
20(g) Effectiveness of division.--A division takes effect as
21follows:
22(1) If the division is one in which all of the resulting
23associations are domestic associations, the division is
24effective when the statement of division is effective.
25(2) If the division is one in which one or more of the
26resulting associations is a foreign association, the division
27is effective on the later of:
28(i) the effectiveness of the statement of division;
29or
30(ii) when the division is effective under the law of
1each of the jurisdictions of formation of the foreign
2resulting associations.
3(h) Cross references.--See sections 134 (relating to
4docketing statement) and 135 (relating to requirements to be met
5by filed documents).
6§ 367. Effect of division.
7(a) General rule.--When a division becomes effective, all of
8the following apply:
9(1) If the dividing association is to survive the
10division:
11(i) It continues to exist.
12(ii) Its public organic record, if any, is amended
13as provided in the statement of division.
14(iii) Its private organic rules that are to be in
15record form, if any, are amended to the extent provided
16in the plan of division.
17(2) If the dividing association is not to survive the
18division, the dividing association ceases to exist.
19(3) With respect to each new association, all of the
20following apply:
21(i) It comes into existence.
22(ii) It holds any property allocated to it as the
23successor to the dividing association, and not by
24transfer, whether directly or indirectly, or by operation
25of law.
26(iii) Its public organic record, if any, and private
27organic rules are effective.
<-28(iv) If it is a limited liability partnership, its
29statement of registration is effective.
<-30(iv) (v) If it is a limited liability limited
1partnership and is not using the alternative procedure in
2section 8201(f) (relating to scope), its statement of
3registration is effective.
<-4(v) (vi) If it is an electing partnership, its
5statement of election is effective.
6(4) Property of the dividing association:
7(i) That is allocated by the plan of division
8either:
9(A) vests in the new associations as provided in
10the plan of division; or
11(B) remains vested in the dividing association.
12(ii) That is not allocated by the plan of division:
13(A) remains vested in the dividing association,
14if the dividing association survives the division; or
15(B) is allocated to and vests equally in the
16resulting associations as tenants in common, if the
17dividing association does not survive the division.
18(iii) Vests as provided in this paragraph without
19transfer, reversion or impairment.
20(5) A resulting association to which a cause of action
21is allocated as provided in paragraph (4) may be substituted
22or added in any pending action or proceeding to which the
23dividing association is a party at the effective time of the
24division.
25(6) The liabilities of the dividing association are
26allocated between or among the resulting associations as
27provided in section 368 (relating to allocation of
28liabilities in division).
29(7) The interests in the dividing association that are
30to be converted or canceled in the division are converted or
1canceled, and the interest holders of those interests are
2entitled only to the rights provided to them under the plan
3of division and to any dissenters rights they may have
4pursuant to section 317 (relating to contractual dissenters
5rights in entity transactions) or 363(c) (relating to
6approval of division).
7(b) Dividing association not dissolved.--Except as provided
8in the organic law or organic rules of the dividing association,
9the division does not give rise to any rights that an interest
10holder, governor or third party would have upon a dissolution,
11liquidation or winding up of the dividing association.
12(c) New interest holder liability.--When a division becomes
13effective, a person that did not have interest holder liability
14with respect to the dividing association and that becomes
15subject to interest holder liability with respect to an
16association as a result of the division has interest holder
17liability only to the extent provided by the organic law of the
18association and only for those liabilities that arise after the
19division becomes effective.
20(d) Prior interest holder liability.--When a division
21becomes effective, the interest holder liability of a person
22that ceases to hold an interest in the dividing association that
23is a domestic entity with respect to which the person had
24interest holder liability is as follows:
25(1) The division does not discharge any interest holder
26liability under the organic law of the domestic entity to the
27extent the interest holder liability arose before the
28division became effective.
29(2) The person does not have interest holder liability
30under the organic law of the domestic entity for any debt,
1obligation or other liability that arises after the division
2becomes effective.
3(3) The organic law of the domestic entity continues to
4apply to the release, collection or discharge of any interest
5holder liability preserved under paragraph (1) as if the
6division had not occurred.
7(4) The person has whatever rights of contribution from
8any other person as are provided by other law or the organic
9law or organic rules of the domestic entity with respect to
10any interest holder liability preserved by paragraph (1) as
11if the division had not occurred.
12(e) Registration of registered foreign <-entity association.--
13When a division of a registered foreign <-entity association in
14which at least one of the resulting associations is a domestic
15entity becomes effective, the registration to do business of the
16dividing association is canceled if it does not survive the
17division.
18(f) Real property.--Except with regard to the real property
19of a dividing association that is a domestic nonprofit
20corporation, the allocation of any fee or freehold interest or
21leasehold having a remaining term of 30 years or more in any
22tract or parcel of real property situate in this Commonwealth
23owned by a dividing association, including property owned by a
24foreign association dividing solely under the law of another
25jurisdiction, to a new association is not effective until one of
26the following documents is filed in the office for the recording
27of deeds of the county, or each of them, in which the tract or
28parcel is situated:
29(1) A deed, lease or other instrument of confirmation
30describing the tract or parcel.
1(2) A duly executed duplicate original copy of the
2statement of division.
3(3) A copy of the statement of division certified by the
4department.
5(4) A declaration of acquisition stating the value of
6real estate holdings in the county of the new association as
7an acquired association.
8(g) Secured collateral.--The allocation to a new association
9of property that is collateral covered by an effective financing
10statement shall not be effective until a new financing statement
11naming the new association as a debtor is effective under
12Article 9 of the Uniform Commercial Code as enacted in the
13relevant jurisdiction.
14(h) Vehicles.--The provisions of 75 Pa.C.S. § 1114 (relating
15to transfer of vehicle by operation of law) shall not be
16applicable to an allocation of ownership of any motor vehicle,
17trailer or semitrailer to a new association under this section
18or under a similar law of any other jurisdiction, but any such
19allocation shall be effective only upon compliance with the
20requirements of 75 Pa.C.S. § 1116 (relating to issuance of new
21certificate following transfer), unless the dividing association
22is a domestic nonprofit corporation.
23(i) Disposition of interests.--Unless otherwise provided in
24the plan of division, the interests and any securities or
25obligations of each new association shall be distributed to:
26(1) the dividing association, if it survives the
27division; or
28(2) the holders of the common or other residuary
29interest of the dividing association that do not assert
30dissenters rights, pro rata, if the dividing association does
1not survive the division.
2§ 368. Allocation of liabilities in division.
3(a) General rule.--Except as provided in this section, when
4a division becomes effective, a resulting association is
5responsible:
6(1) Individually for the liabilities the resulting
7association undertakes or incurs in its own name after the
8division.
9(2) Individually for the liabilities of the dividing
10association that are allocated to or remain the liability of
11that resulting association to the extent specified in the
12plan of division.
13(3) Jointly and severally with the other resulting
14associations for the liabilities of the dividing association
15that are not allocated by the plan of division.
16(b) Joint and several liability.--If an allocation of
17property or liabilities in a division is ineffective or voidable
18pursuant to fraudulent transfer or similar law, both of the
19following apply:
20(1) The allocations of liabilities in the plan of
21division are ineffective and the liabilities of the dividing
22association become liabilities of all of the resulting
23associations, jointly and severally.
24(2) The validity and effectiveness of the division are
25not affected thereby.
26(c) Breach of obligation.--If a division breaches an
27obligation of the dividing association, all of the resulting
28associations are liable, jointly and severally, for the breach,
29but the validity and effectiveness of the division are not
30affected thereby.
1(d) Application of fraudulent transfer law.--In applying the
2law governing fraudulent transfers to a division:
3(1) The law applies to the dividing association as
4follows:
5(i) If it does not survive the division, it is not
6subject to that law.
7(ii) If it survives the division, it is subject to
8that law only in its capacity as a resulting association.
9(2) The law applies to each resulting association as
10follows:
11(i) The association is treated as a debtor.
12(ii) The liabilities allocated to the association
13are treated as an obligation incurred by the debtor.
14(iii) The association is treated as not having
15received a reasonably equivalent value in exchange for
16incurring the obligation.
17(iv) The property allocated to the association is
18treated as remaining property.
19(e) Distribution tests not applicable.--A direct or indirect
20allocation of property or liabilities in a division is not a
21distribution for purposes of the organic law of the dividing
22association or any of the resulting associations.
23(f) Liens and other charges.--Liens, security interests and
24other charges on the property of the dividing association are
25not impaired by the division, notwithstanding any otherwise
26enforceable allocation of liabilities of the dividing
27association.
28(g) Security agreements.--If the dividing association is
29bound by a security agreement governed by Article 9 of the
30Uniform Commercial Code as enacted in any jurisdiction and the
1security agreement provides that the security interest attaches
2to after-acquired collateral, each resulting association is
3bound by the security agreement.
4(h) Creditors and guarantors.--An allocation of a liability
5does not:
6(1) Affect the rights under other law of a creditor owed
7payment of the liability or performance of the obligation
8that creates the liability, except that those rights are
9available only against an association responsible for the
10liability or obligation under this section.
11(2) Release or reduce the obligation of a surety or
12guarantor of the liability or obligation.
13(i) Regulatory approvals.--The conditions in this section
14for freeing one or more of the resulting associations from the
15liabilities of the dividing association and for allocating some
16or all of the liabilities of the dividing association shall be
17conclusively deemed to have been satisfied if the plan of
18division has been approved by the Department of Banking and
19Securities, the Insurance Department or the Pennsylvania Public
20Utility Commission in a final order issued after August 21,
212001, that is not subject to further appeal.
22(j) Taxes.--Any taxes, interest, penalties and public
23accounts of the Commonwealth claimed against the dividing
24association that are settled, assessed or determined prior to or
25after the division shall be the liability of all of the
26resulting associations. Upon the application of the dividing
27association, the Department of Revenue, with the concurrence of
28the Department of Labor and Industry, shall release one or more,
29but less than all, of the resulting associations from liability
30and liens for all taxes, interest, penalties and public accounts
1of the dividing association due the Commonwealth for periods
2prior to the effective date of the division if those departments
3are satisfied that the public revenues will be adequately
4secured.
5SUBCHAPTER G
6DOMESTICATION
7Sec.
8371. Domestication authorized.
9372. Plan of domestication.
10373. Approval of domestication.
11374. Amendment or abandonment of plan of domestication.
12375. Statement of domestication; effectiveness.
13376. Effect of domestication.
14§ 371. Domestication authorized.
15(a) Domestic entities.--Except as provided in section 318
16(relating to excluded entities and transactions), by complying
17with this chapter, a domestic entity may become a domestic
18entity of the same type in a foreign jurisdiction if the
19domestication is authorized by the law of the foreign
20jurisdiction.
21(b) Foreign entities.--By complying with the applicable
22provisions of this subchapter, a foreign entity may become a
23domestic entity of the same type in this Commonwealth if this
24title provides for the formation of that type of entity.
25(c) Cross reference.--See section 314 (relating to
26regulatory conditions and required notices and approvals).
27§ 372. Plan of domestication.
28(a) General rule.--A domestic entity may become a foreign
29entity of the same type by approving a plan of domestication.
30The plan shall be in record form and contain all of the
1following:
2(1) The name and type of the domesticating entity.
3(2) The name and jurisdiction of formation of the
4domesticated entity.
5(3) The manner, if any, of canceling or converting those
6interests in the domesticating entity, if any, that are to
7receive special treatment as authorized by and subject to
8section 329 (relating to special treatment of interest
9holders).
10(4) The proposed public organic record of the
11domesticated entity if it is a filing entity.
12(5) The full text of the private organic rules of the
13domesticated entity that are proposed to be in record form.
14(6) The other terms and conditions of the domestication.
15(7) Any other provision required by:
16(i) law of this Commonwealth;
17(ii) the law of the jurisdiction of formation of the
18foreign domesticated entity; or
19(iii) the organic rules of the domesticating entity.
20(b) Optional contents.--In addition to the requirements of
21subsection (a), a plan of domestication may contain any other
22provision not prohibited by law.
23(c) Terms of interests.--Except as provided in the plan of
24domestication pursuant to section 329, the terms of the
25interests in the domesticated entity and the rights of the
26interest holders in the domesticated entity shall be
27substantially the same as the terms of the interests and the
28rights of the interest holders in the domesticating entity,
29except to the extent a different term or right is required by a
30provision of the organic law of the domesticated entity that
1cannot be varied in its organic rules.
2(d) Cross reference.--See section 316(c) (relating to
3contents of plan).
4§ 373. Approval of domestication.
5(a) Approval by domestic entities.--A plan of domestication
6in which the domesticating entity is a domestic entity is not
7effective unless it has been approved by the domestic entity in
8accordance with the applicable provisions of Subchapter B
9(relating to approval of entity transactions).
10(b) Approval by foreign entities.--A plan of domestication
11in which the domesticating entity is a foreign entity is not
12effective unless it has been approved in one of the following
13ways:
14(1) In accordance with the law of the jurisdiction of
15formation of the foreign entity.
16(2) By at least a majority of the votes cast with
17respect to approval of the domestication by all interest
18holders of the foreign entity entitled to vote generally on a
19merger to which the foreign entity is a party if the law of
20the foreign entity's jurisdiction of formation does not
21provide for a domestication of the foreign entity.
22(c) Cross references.--See sections 317 (relating to
23contractual dissenters rights in entity transactions) and 329
24(relating to special treatment of interest holders).
25§ 374. Amendment or abandonment of plan of domestication.
26(a) Approval of amendment.--A plan of domestication in which
27the domesticating entity is a domestic entity may be amended in
28one of the following ways:
29(1) In the same manner as the plan was approved, if the
30plan does not provide for the manner in which it may be
1amended.
2(2) By the governors or interest holders of the domestic
3entity in the manner provided in the plan, but an interest
4holder that was entitled to vote on or consent to approval of
5the plan is entitled to vote on or consent to any amendment
6of the plan that will change any of the following:
7(i) The amount or kind of interests, securities,
8obligations, money, other property, rights to acquire
9interests or securities, or any combination of the
10foregoing, to be received by any of the interest holders
11of the domesticating entity under the plan.
12(ii) The public organic record, if any, or private
13organic rules of the domesticated entity that will be in
14effect immediately after the domestication becomes
15effective, except for changes that do not require
16approval of the interest holders of the domesticated
17entity under its organic law or organic rules.
18(iii) Any other terms or conditions of the plan, if
19the change would adversely affect the interest holder in
20any material respect.
21(b) Approval of abandonment.--After a plan of domestication
22has been approved by a domestic entity that is the domesticating
23entity and before a statement of domestication becomes
24effective, the plan may be abandoned as provided in the plan.
25Unless prohibited by the plan, a domestic entity that is the
26domesticating entity may abandon the plan in the same manner as
27the plan was approved.
28(c) Statement of abandonment.--If a plan of domestication is
29abandoned after a statement of domestication has been delivered
30to the department for filing and before the statement becomes
1effective, a statement of abandonment, signed by the
2domesticating entity, must be delivered to the department for
3filing before the time the statement of domestication becomes
4effective. The statement of abandonment shall take effect on
5filing, and the domestication shall be abandoned and shall not
6become effective. The statement of abandonment shall contain all
7of the following:
8(1) The name of the domesticating entity.
9(2) The date on which the statement of domestication was
10delivered to the department for filing.
11(3) A statement that the domestication has been
12abandoned in accordance with this section.
13(d) Cross references.--See sections 134 (relating to
14docketing statement) and 135 (relating to requirements to be met
15by filed documents).
16§ 375. Statement of domestication; effectiveness.
17(a) General rule.--A statement of domestication shall be
18signed by the domesticating entity and delivered to the
19department for filing along with the certificates, if any,
20required by section 139 (relating to tax clearance of certain
21fundamental transactions).
22(b) Contents.--A statement of domestication shall contain
23all of the following:
24(1) With respect to the domesticating entity:
25(i) its name;
26(ii) its jurisdiction of formation;
27(iii) its type;
28(iv) the date on which it was first created,
29incorporated, formed or otherwise came into existence;
30(v) if it is a domestic filing entity, domestic
1limited liability partnership or registered foreign
2association, the address of its registered office,
3including street and number, if any, in this
4Commonwealth, subject to section 109 (relating to name of
5commercial registered office provider in lieu of
6registered address);
7(vi) if it is a domestic entity that is not a
8domestic filing entity or limited liability partnership,
9the address, including street and number, if any, of its
10principal office; and
11(vii) if it is a nonregistered foreign association,
12the address, including street and number, if any, of:
13(A) its registered or similar office, if any,
14required to be maintained by the law of its
15jurisdiction of formation; or
16(B) if it is not required to maintain a
17registered or similar office, its principal office.
18(2) With respect to the domesticated entity:
19(i) its name;
20(ii) its jurisdiction of formation;
21(iii) its type;
22(iv) if it is a domestic filing entity, domestic
23limited liability partnership or registered foreign
24association, the address of its registered office,
25including street and number, if any, in this
26Commonwealth, subject to section 109;
27(v) if it is a domestic entity that is not a
28domestic filing entity or limited liability partnership,
29the address, including street and number, if any, of its
30principal office; and
1(vi) if it is a nonregistered foreign association,
2the address, including street and number, if any, of:
3(A) its registered or similar office, if any,
4required to be maintained by the law of its
5jurisdiction of formation; or
6(B) if it is not required to maintain a
7registered or similar office, its principal office.
8(3) If the statement of domestication is not to be
9effective on filing, the later date or date and time on which
10it will become effective.
11(4) If the domesticating entity is a domestic entity, a
12statement that the plan of domestication was approved in
13accordance with Subchapter B (relating to approval of entity
14transactions) or, if the domesticating entity is a foreign
15entity, a statement that the domestication was approved in
16accordance with section 373(b) (relating to approval of
17domestication).
18(5) If the domesticated entity is a domestic filing
19entity, its public organic record as an attachment. The
20public organic record does not need to state the name or
21address of an incorporator of a corporation, organizer of a
22limited liability company or similar person with respect to
23any other type of entity.
24(6) If the domesticated entity is a domestic limited
25liability partnership or a domestic limited liability limited
26partnership that is not using the alternative procedure in
27section 8201(f) (relating to scope), its statement of
28registration as an attachment.
29(7) If the domesticated entity is an electing
30partnership, its statement of election as an attachment.
1(8) If the domesticating entity is to be a domestic
2entity in both this Commonwealth and the foreign
3jurisdiction, a statement to that effect.
4(c) Other provisions.--In addition to the requirements of
5subsection (b), a statement of domestication may contain any
6other provision not prohibited by law.
7(d) Public organic record of new domestic entity.--If the
8domesticated entity is a domestic entity, its public organic
9record, if any, must satisfy the requirements of the law of this
10Commonwealth, except that it does not need to be signed and may
11omit any provision that is not required to be included in a
12restatement of the public organic record.
13(e) Filing of plan.--A plan of domestication that is signed
14by a domesticating entity that is a domestic entity and meets
15all of the requirements of subsection (b) may be delivered to
16the department for filing instead of a statement of
17domestication and on filing has the same effect. If a plan of
18domestication is filed as provided in this subsection,
19references in this chapter to a statement of domestication refer
20to the plan of domestication filed under this subsection.
21(f) Effectiveness of domestication.--A domestication in
22which the domesticated entity is a domestic entity is effective
23when the statement of domestication is effective under section
24136(c) (relating to processing of documents by Department of
25State). A domestication in which the domesticated entity is a
26foreign entity becomes effective on the later of:
27(1) the date and time provided by the organic law of the
28domesticated entity; or
29(2) when the statement of domestication is effective.
30(g) Cross references.--See sections 134 (relating to
1docketing statement) and 135 (relating to requirements to be met
2by filed documents).
3§ 376. Effect of domestication.
4(a) General rule.--When a domestication becomes effective,
5all of the following apply:
6(1) The domesticated entity is:
7(i) organized under and subject to the organic law
8of the domesticated entity;
9(ii) the same entity without interruption as the
10domesticating entity;
11(iii) deemed to have commenced its existence on the
12date the domesticating entity commenced its existence in
13the jurisdiction in which the domesticating entity was
14first created, formed, incorporated or otherwise came
15into existence; and
16(iv) also organized under and subject to the organic
17law of the domesticating entity if the statement of
18domestication includes the statement provided for in
19section 375(b)(8) (relating to statement of
20domestication; effectiveness).
21(2) All property of the domesticating entity continues
22to be vested in the domesticated entity without transfer,
23reversion or impairment.
24(3) All debts, obligations and other liabilities of the
25domesticating entity continue as debts, obligations and other
26liabilities of the domesticated entity.
27(4) Except as provided by law or the plan of
28domestication, all of the rights, privileges, immunities,
29powers and purposes of the domesticating entity remain in the
30domesticated entity.
1(5) The name of the domesticated entity may be
2substituted for the name of the domesticating entity in any
3pending action or proceeding.
4(6) If the domesticated entity is a filing entity, its
5public organic record is effective and is binding on its
6interest holders.
7(7) If the domesticated entity is a domestic limited
8liability partnership or a limited liability limited
9partnership that is not using the alternative procedure in
10section 8201(f) (relating to scope), its statement of
11registration is effective.
12(8) If the domesticated entity is an electing
13partnership, its statement of election is effective.
14(9) The private organic rules of the domesticated entity
15that are to be in record form, if any, approved as part of
16the plan of domestication are effective.
17(10) The interest holders in the domesticating entity
18are interest holders in the domesticated entity except to the
19extent that an interest holder does not receive interests in
20the domesticated entity pursuant to a provision in the plan
21of domestication for special treatment pursuant to section
22329 (relating to special treatment of interest holders).
23(b) No dissolution rights.--Except as otherwise provided in
24the organic law or organic rules of a domestic domesticating
25entity, the domestication does not give rise to any rights that
26an interest holder, governor or third party would have upon a
27dissolution, liquidation or winding up of the domesticating
28entity.
29(c) Collection of liabilities.--When a domestication becomes
30effective, a foreign domesticated entity may be served with
1process in this Commonwealth for the collection and enforcement
2of any of its debts, obligations and other liabilities in
3accordance with applicable law.
4(d) New interest holder liability.--When a domestication
5becomes effective, a person that becomes subject to interest
6holder liability with respect to a domestic association as a
7result of the domestication has interest holder liability only
8to the extent provided by the organic law of the association and
9only for those debts, obligations and other liabilities that
10arise after the domestication is effective.
11(e) Prior interest holder liability.--When a domestication
12becomes effective, the following rules apply:
13(1) The domestication does not discharge any interest
14holder liability under the organic law of a domesticating
15domestic entity to the extent the interest holder liability
16arose before the domestication became effective.
17(2) A person does not have interest holder liability
18under the organic law of a domestic domesticating entity for
19any debt, obligation or other liability that arises after the
20domestication becomes effective.
21(3) The organic law of a domestic domesticating entity
22continues to apply to the release, collection or discharge of
23any interest holder liability preserved under paragraph (1)
24as if the domestication had not occurred.
25(4) A person has whatever rights of contribution from
26any other person as are provided by other law or the organic
27rules of a domestic domesticating entity with respect to any
28interest holder liability preserved under paragraph (1) as if
29the domestication had not occurred.
30(f) Service of process.--When a domestication becomes
1effective, a foreign domesticated entity may be served with
2process in this Commonwealth for the collection and enforcement
3of any of its debts, obligations and other liabilities in
4accordance with applicable law.
5(g) No dissolution.--A domestication does not require a
6domestic domesticating entity to liquidate, dissolve or wind up
7its affairs and does not constitute or cause the liquidation or
8dissolution of the entity.
9(h) Taxes.--Any taxes, interest, penalties and public
10accounts of the Commonwealth claimed against the domesticating
11entity that are settled, assessed or determined prior to or
12after the domestication shall be the liability of the
13domesticated entity.
14(i) Cross references.--See sections 416 (relating to
15withdrawal deemed on certain transactions) and 417 (relating to
16required withdrawal on certain transactions).
17CHAPTER 4
18FOREIGN ASSOCIATIONS
19Subchapter
20A. General Provisions
21B. Registration
22SUBCHAPTER A
23GENERAL PROVISIONS
24Sec.
25401. Application of chapter.
26402. Governing law.
27403. Activities not constituting doing business.
28§ 401. Application of chapter.
29(a) General rule.--Except as otherwise provided in this
30section or in subsequent provisions of this chapter, this
1chapter shall apply to all foreign associations.
2(b) Application to foreign banking institutions.--The words
3"foreign filing association" or "foreign association" in this
4chapter include an association that, if a domestic association,
5would be a banking institution or credit union. The term does
6not include an interstate bank as defined in section 102 of the
7act of November 30, 1965 (P.L.847, No.356), known as the Banking
8Code of 1965.
9(c) Domestic Federal financial association exclusion.--
10Except as permitted by act of Congress, this chapter shall not
11apply to:
12(1) Any of the following institutions or similar
13federally chartered institutions engaged in this Commonwealth
14in activities similar to those conducted by banking
15institutions or credit unions:
16(i) National banking associations organized under
17The National Bank Act (13 Stat. 99, 12 U.S.C. § 1 et
18seq.).
19(ii) Federal savings and loan associations and
20Federal mutual savings banks organized under the Home
21Owners' Loan Act (48 Stat. 128, 12 U.S.C. § 1461 et
22seq.).
23(iii) Federal credit unions organized under the
24Federal Credit Union Act (48 Stat. 1216, 12 U.S.C. § 1751
25et seq.).
26(2) Any other Federal association intended by the
27Congress to be treated for State law purposes as a domestic
28association of this Commonwealth.
29(d) Foreign insurance corporations.--A foreign insurance
30corporation shall be subject to this chapter, except as provided
1in section 402(e) (relating to governing law) or 411(g)
2(relating to registration to do business in this Commonwealth).
3(e) Government entities.--This chapter shall apply to and
4the words "association" and "foreign association" shall include
5a government or other sovereign, other than the Commonwealth or
6any of its political subdivisions, and any governmental
7corporation, agency or other entity thereof.
8(f) Admitted foreign fraternal benefit society exclusion.--
9This chapter shall not apply to any foreign corporation not-for-
10profit licensed to transact business in this Commonwealth under
11section 2455 of the act of May 17, 1921 (P.L.682, No.284), known
12as The Insurance Company Law of 1921.
13§ 402. Governing law.
14(a) General rule.--The law of the jurisdiction of formation
15of a foreign association governs the following:
16(1) The internal affairs of the association.
17(2) The liability that a person has as an interest
18holder or governor for a debt, obligation or other liability
19of the association.
20(3) The liability of a series or protected cell of a
21foreign association.
22(b) Effect of differences in law.--A foreign association is
23not precluded from registering to do business in this
24Commonwealth because of any difference between the law of the
25jurisdiction of formation of the foreign association and the law
26of this Commonwealth.
27(c) Limitations on domestic associations applicable.--
28Registration of a foreign association to do business in this
29Commonwealth does not authorize the foreign association to
30engage in any activities and affairs or exercise any power that
1a domestic association of the same type may not engage in or
2exercise in this Commonwealth.
3(d) Equal rights and privileges of registered foreign
4associations.--Except as otherwise provided by law, a registered
5foreign association, so long as its registration to do business
6is not terminated or canceled, shall enjoy the same rights and
7privileges as a domestic entity and shall be subject to the same
8liabilities, restrictions, duties and penalties now in force or
9hereafter imposed on domestic entities, to the same extent as if
10it had been formed under this title. A foreign insurance
11corporation shall be deemed a registered foreign association
12except as provided in subsection (e).
13(e) Foreign insurance corporations.--A foreign insurance
14corporation shall, insofar as it is engaged in the business of
15writing insurance or reinsurance as principal, be subject to the
16law of this Commonwealth regulating the conduct of the business
17of insurance by a foreign insurance corporation in lieu of the
18provisions of subsection (d) regarding its rights, privileges,
19liabilities, restrictions and duties and the penalties to which
20it may be subject.
21(f) Agricultural lands.--Interests in agricultural land
22shall be subject to the restrictions of, and escheatable as
23provided by, the act of April 6, 1980 (P.L.102, No.39), referred
24to as the Agricultural Land Acquisition by Aliens Law.
25§ 403. Activities not constituting doing business.
26(a) General rule.--Activities of a foreign filing
27association or foreign limited liability partnership that do not
28constitute doing business in this Commonwealth under this
29chapter shall include the following:
30(1) Maintaining, defending, mediating, arbitrating or
1settling an action or proceeding.
2(2) Carrying on any activity concerning its internal
3affairs, including holding meetings of its interest holders
4or governors.
5(3) Maintaining accounts in financial institutions.
6(4) Maintaining offices or agencies for the transfer,
7exchange and registration of securities of the association or
8maintaining trustees or depositories with respect to the
9securities.
10(5) Selling through independent contractors.
11(6) Soliciting or obtaining orders by any means if the
12orders require acceptance outside of this Commonwealth before
13the orders become contracts.
14(7) Creating or acquiring indebtedness, mortgages or
15security interests in property.
16(8) Securing or collecting debts or enforcing mortgages
17or security interests in property securing the debts and
18holding, protecting or maintaining property so acquired.
19(9) Conducting an isolated transaction that is not in
20the course of similar transactions.
21(10) Owning, without more, property.
22(11) Doing business in interstate or foreign commerce.
23(b) Participation in other associations.--Being an interest
24holder or governor of a foreign association that does business
25in this Commonwealth shall not by itself constitute doing
26business in this Commonwealth.
27(c) Applicability.--This section shall not apply in
28determining the contacts or activities that may subject a
29foreign filing association or foreign limited liability
30partnership to service of process, taxation or regulation under
1law of this Commonwealth other than this title.
2SUBCHAPTER B
3REGISTRATION
4Sec.
5411. Registration to do business in this Commonwealth.
6412. Foreign registration statement.
7413. Amendment of foreign registration statement.
8414. Noncomplying name of foreign association.
9415. Voluntary withdrawal of registration.
10416. Withdrawal deemed on certain transactions.
11417. Required withdrawal on certain transactions.
12418. Transfer of registration.
13419. Termination of registration.
14§ 411. Registration to do business in this Commonwealth.
15(a) Registration required.--Except as provided in section
16401 (relating to application of chapter) or subsection (g), a
17foreign filing association or foreign limited liability
18partnership may not do business in this Commonwealth until it
19registers with the department under this chapter.
20(b) Penalty for failure to register.--A foreign filing
21association or foreign limited liability partnership doing
22business in this Commonwealth may not maintain an action or
23proceeding in this Commonwealth unless it is registered to do
24business under this chapter.
25(c) Contracts and acts not impaired by failure to
26register.--The failure of a foreign filing association or
27foreign limited liability partnership to register to do business
28in this Commonwealth does not impair the validity of a contract
29or act of the foreign filing association or foreign limited
30liability partnership or preclude it from defending an action or
1proceeding in this Commonwealth.
2(d) Limitations on liability preserved.--A limitation on the
3liability of an interest holder or governor of a foreign filing
4association or of a partner of a foreign limited liability
5partnership is not waived solely because the foreign filing
6association or foreign limited liability partnership does
7business in this Commonwealth without registering.
8(e) Governing law not affected.--Section 402 (relating to
9governing law) applies even if a foreign association fails to
10register under this chapter.
11(f) Registered office.--Subject to section 109 (relating to
12name of commercial registered office provider in lieu of
13registered address), every registered foreign association shall
14have, and continuously maintain, in this Commonwealth a
15registered office, which may but need not be the same as its
16place of business in this Commonwealth.
17(g) Foreign insurance corporations.--A foreign insurance
18corporation is not required to register under this chapter.
19§ 412. Foreign registration statement.
20(a) General rule.--To register to do business in this
21Commonwealth, a foreign filing association or foreign limited
22liability partnership must deliver a foreign registration
23statement to the department for filing. The statement must be
24signed by the association and state all of the following:
25(1) Both:
26(i) The name of the foreign filing association or
27foreign limited liability partnership.
28(ii) If the name does not comply with section 202
29(relating to requirements for names generally), an
30alternate name adopted pursuant to section 414(a)
1(relating to noncomplying name of foreign association).
2(2) The type of association and, if it is a foreign
3limited partnership, whether it is a foreign limited
4liability limited partnership.
5(3) The association's jurisdiction of formation.
6(4) The street and mailing addresses of the
7association's principal office and, if the law of the
8association's jurisdiction of formation requires the
9association to maintain an office in that jurisdiction, the
10street and mailing addresses of the office.
11(5) Subject to section 109 (relating to name of
12commercial registered office provider in lieu of registered
13address), the address, including street and number, if any,
14of its registered office in this Commonwealth.
15(6) If the association may have one or more series, a
16statement to that effect.
17(b) Qualification or registration under former statutes.--
18The effect of a foreign association qualifying or registering to
19do business under prior provisions of law shall be as follows:
20(1) With respect to corporations for profit, the
21following apply:
22(i) If a foreign corporation for profit was admitted
23to do business in this Commonwealth by the filing of a
24power of attorney and statement under the former act of
25June 8, 1911 (P.L.710, No.283), entitled "An act to
26regulate the doing of business in this Commonwealth by
27foreign corporations; the registration thereof and
28service of process thereon; and providing punishment and
29penalties for the violation of its provisions; and
30repealing previous legislation on the subject," on <-{the
1Legislative Reference Bureau shall insert here the
2effective date of this chapter} <-July 1, 2015, the power
3of attorney and statement shall be deemed a filed
4registration statement under this chapter. The
5corporation shall include in its first amended
6registration statement under this chapter the information
7required by this chapter to be set forth in a
8registration statement.
9(ii) A certificate of authority issued under the
10former provisions of the act of May 5, 1933 (P.L.364,
11No.106), known as the Business Corporation Law of 1933,
12or Subpart B of Part II (relating to business
13corporations) that is in effect on <-{the Legislative
14Reference Bureau shall insert here the effective date of
15this chapter} <-July 1, 2015, shall be deemed to be a
16registration statement under this chapter and shall be
17deemed not to contain any reference to the kind of
18business that the corporation proposes to do in this
19Commonwealth.
20(iii) A certificate of authority issued under the
21former provisions of Subchapter B of Chapter 41 (relating
22to qualification) that is in effect on <-{the Legislative
23Reference Bureau shall insert here the effective date of
24this chapter} <-July 1, 2015, shall be deemed to be a
25registration statement under this chapter.
26(2) With respect to corporations not-for-profit, the
27following apply:
28(i) If a foreign corporation not-for-profit was
29admitted to do business in this Commonwealth by the
30filing of a power of attorney and statement under the
1former act of June 8, 1911 (P.L.710, No.283), on <-{the
2Legislative Reference Bureau shall insert here the
3effective date of this chapter} <-July 1, 2015, the power
4of attorney and statement shall be deemed a filed
5registration statement under this chapter. The
6corporation shall include in its first amended
7registration statement under this chapter the information
8required by this chapter to be set forth in a
9registration statement.
10(ii) A certificate of authority issued under the
11former provisions of the act of May 5, 1933 (P.L.289,
12No.105), known as the Nonprofit Corporation Law of 1933,
13or the former provisions of Article B of Part III known
14as the Nonprofit Corporation Law of 1972, as added by the
15act of November 15, 1972 (P.L.1063, No.271), that is in
16effect on <-{the Legislative Reference Bureau shall insert
17here the effective date of this chapter} <-July 1, 2015,
18shall be deemed to be a registration statement under this
19chapter and shall be deemed not to contain any reference
20to the kind of business that the corporation proposes to
21do in this Commonwealth.
22(iii) A certificate of authority issued under the
23former provisions of Subchapter B of Chapter 61 (relating
24to qualification) that is in effect on <-{the Legislative
25Reference Bureau shall insert here the effective date of
26this chapter} <-July 1, 2015, shall be deemed to be a
27registration statement under this chapter.
28(3) With respect to limited partnerships, the following
29apply:
30(i) An application for registration filed under the
1former provisions of 59 Pa.C.S. § 563 (relating to
2registration) that is in effect on <-{the Legislative
3Reference Bureau shall insert here the effective date of
4this chapter} <-July 1, 2015, shall be deemed to be a
5registration statement under this chapter and shall be
6deemed not to contain any reference to:
7(A) the general character of the business the
8limited partnership proposes to transact in this
9Commonwealth; or
10(B) the names and addresses of the limited
11partners.
12(ii) An application for registration filed under the
13former provisions of section 8582 (relating to
14registration) that is in effect on <-{the Legislative
15Reference Bureau shall insert here the effective date of
16this chapter} <-July 1, 2015, shall be deemed to be a
17registration statement under this chapter and shall be
18deemed not to contain:
19(A) any reference to the address of the office
20at which is kept a list of the names and addresses of
21the limited partners and their capital contributions;
22or
23(B) an undertaking to keep those records until
24the registration of the limited partnership in this
25Commonwealth is canceled or withdrawn.
26(4) An application for registration filed by a limited
27liability company under the former provisions of section 8981
28(relating to foreign limited liability companies) that is in
29effect on <-{the Legislative Reference Bureau shall insert here
30the effective date of this chapter} <-July 1, 2015, shall be
1deemed to be a registration statement under this chapter.
2(5) A certificate of authority issued to a business
3trust under the former provisions of section 9507 (relating
4to foreign business trusts) that is in effect on <-{the
5Legislative Reference Bureau shall insert here the effective
6date of this chapter} <-July 1, 2015, shall be deemed to be a
7registration statement under this chapter.
8(c) Cross references.--See:
9Section 134 (relating to docketing statement).
10Section 135 (relating to requirements to be met by filed
11documents).
12Section 4124 (relating to advertisement of registration
13to do business).
14Section 6124 (relating to advertisement of registration
15to do business).
16§ 413. Amendment of foreign registration statement.
17(a) General rule.--A registered foreign association shall
18deliver to the department for filing an amendment to its foreign
19registration statement if there is a change in any of the
20following:
21(1) The name of the association.
22(2) The type of association, including, if it is a
23foreign limited partnership, whether the association became
24or ceased to be a foreign limited liability limited
25partnership.
26(3) The association's jurisdiction of formation.
27(4) An address required by section 412(a)(4) (relating
28to foreign registration statement).
29(5) Its registered office.
30(6) The authority of the association to have one or more
1series.
2(b) Contents of amendment.--An amendment of a foreign
3registration statement shall be signed by the registered foreign
4association and state all of the following:
5(1) The name under which the registered foreign
6association is registered to do business in this
7Commonwealth.
8(2) Subject to section 109 (relating to name of
9commercial registered office provider in lieu of registered
10address), the address, including street and number, if any,
11of its registered office in this Commonwealth.
12(3) If the amendment is not to be effective on filing,
13the later date or date and time on which it will become
14effective.
15(4) The information that is to be changed.
16(c) Cross references.--See sections 134 (relating to
17docketing statement) and 135 (relating to requirements to be met
18by filed documents).
19§ 414. Noncomplying name of foreign association.
20(a) General rule.--A foreign filing association or foreign
21limited liability partnership whose name does not comply with
22Subchapter A of Chapter 2 (relating to names) may not register
23to do business in this Commonwealth until it adopts, for the
24purpose of doing business in this Commonwealth, an alternate
25name that complies with Subchapter A of Chapter 2. A foreign
26association that registers under an alternate name under this
27subsection is not required to comply with 54 Pa.C.S. Ch. 3
28(relating to fictitious names) with respect to the alternate
29name. After registering to do business in this Commonwealth
30under an alternate name, a foreign association shall do business
1in this Commonwealth under any of the following:
2(1) The alternate name.
3(2) Its proper name under the law of its jurisdiction of
4formation, with the addition of the name of its jurisdiction
5of formation.
6(3) A name the foreign association is authorized to use
7under 54 Pa.C.S. Ch. 3.
8(b) Change of name.--If a registered foreign association
9changes its name to one that does not comply with Subchapter A
10of Chapter 2, it may not do business in this Commonwealth until
11it complies with subsection (a) by amending its registration to
12adopt an alternate name that complies with Subchapter A of
13Chapter 2.
<-14(c) Filed documents.--If a registered foreign association
15adopts an alternate name under subsection (a), the association
16shall use the alternate name in response to a requirement in
17this title that a document delivered to the department for
18filing state the name of the association.
19§ 415. Voluntary withdrawal of registration.
20(a) General rule.--A registered foreign association may
21withdraw its registration by delivering a statement of
22withdrawal to the department for filing. The statement of
23withdrawal shall be signed by the association and state all of
24the following:
25(1) The name of the association and its jurisdiction of
26formation.
27(2) Subject to section 109 (relating to name of
28commercial registered office provider in lieu of registered
29address), the address, including street and number, if any,
30of its registered office in this Commonwealth.
1(3) That the association is not doing business in this
2Commonwealth.
3(4) That the association withdraws its registration to
4do business in this Commonwealth.
5(b) Filing.--The statement of withdrawal and the
6certificates required by section 139 (relating to tax clearance
7of certain fundamental transactions) shall be delivered to the
8department for filing and shall take effect on filing.
9(c) Cross references.--See sections 134 (relating to
10docketing statement) and 135 (relating to requirements to be met
11by filed documents).
12§ 416. Withdrawal deemed on certain transactions.
<-13(a) Merger.--A registered foreign association that merges
14into a domestic filing entity or domestic limited liability
15partnership shall be deemed to have withdrawn its registration
16on the effective date of the merger.
<-17(a) (b) Conversion.--A registered foreign association that
18converts to any type of domestic filing entity or to a domestic
19limited liability partnership shall be deemed to have withdrawn
20its registration on the effective date of the conversion.
<-21(b) (c) Domestication.--A registered foreign association
22that domesticates in this Commonwealth as a domestic filing
23entity or a domestic limited liability partnership shall be
24deemed to have withdrawn its registration on the effective date
25of the domestication.
26§ 417. Required withdrawal on certain transactions.
27(a) Application of section.--This section shall apply to a
28registered foreign association that has been:
<-29(1) a nonsurviving party to a merger in which the
30survivor is a nonregistered foreign association;
1(2) a dividing association which did not survive the
2division;
<-3(1) (3) dissolved and completed winding up;
<-4(2) (4) converted to a domestic or foreign nonfiling
5association other than a limited liability partnership; or
<-6(3) (5) the domesticating entity in a domestication in
7which the domesticated entity is a domestic or foreign
8nonfiling association other than a limited liability
9partnership.
10(b) Statement of withdrawal.--A registered foreign
11association described in subsection (a) shall deliver a
12statement of withdrawal and the certificates required by section
13139 (relating to tax clearance of certain fundamental
14transactions) to the department for filing. The statement shall
15be signed by the dissolved or converted association and state as
16follows:
17(1) In the case of a foreign association that has
18completed winding up, all of the following:
19(i) The name under which the association is
20registered to do business in this Commonwealth and its
21jurisdiction of formation.
22(ii) That the association withdraws its registration
23to do business in this Commonwealth.
24(2) In the case of a foreign association that has
25converted to a domestic or foreign nonfiling association
26other than a limited liability partnership, all of the
27following:
28(i) The name under which the association is
29registered to do business in this Commonwealth and its
30jurisdiction of formation.
1(ii) The type of nonfiling association to which the
2association has converted and its jurisdiction of
3formation.
4(iii) That the association withdraws its
5registration to do business in this Commonwealth.
6(3) In the case of a foreign association that has
7domesticated as a domestic or foreign nonfiling association
8other than a limited liability partnership in a jurisdiction
9other than this Commonwealth, all of the following:
10(i) The name under which the association is
11registered to do business in this Commonwealth and its
12jurisdiction of formation.
13(ii) The jurisdiction of formation of the
14domesticated association.
15(iii) That the association withdraws its
16registration to do business in this Commonwealth.
17(c) Cross references.--See sections 134 (relating to
18docketing statement) and 135 (relating to requirements to be met
19by filed documents).
20§ 418. Transfer of registration.
21(a) General rule.--If a registered foreign association
22merges into a nonregistered foreign association or converts to a
23foreign association required to register with the department to
24do business in this Commonwealth, the association shall deliver
25to the department for filing an application for transfer of
26registration. The application shall be signed by the surviving
27or converted association and state all of the following:
28(1) The name of the association before the merger or
29conversion.
30(2) The type of association it was before the merger or
1conversion.
2(3) The name of the applicant association and, if the
3name does not comply with section 202 (relating to
4requirements for names generally), an alternate name adopted
5in accordance with section 414(a) (relating to noncomplying
6name of foreign association).
7(4) The type of association of the applicant association
8and its jurisdiction of formation.
9(5) If different than the information for the foreign
10association before the merger or conversion, all of the
11following information regarding the applicant association:
12(i) The street and mailing addresses of the
13principal office of the association and, if the law of
14the association's jurisdiction of formation requires it
15to maintain an office in that jurisdiction, the street
16and mailing addresses of that office.
17(ii) Subject to section 109 (relating to name of
18commercial registered office provider in lieu of
19registered address), the address of its registered office
20in this Commonwealth.
21(b) Effect of application.--When an application for transfer
22of registration takes effect, the registration of the registered
23foreign association to do business in this Commonwealth is
24transferred without interruption to the association into which
25it has merged or to which it has been converted.
26(c) Cross references.--See sections 134 (relating to
27docketing statement) and 135 (relating to requirements to be met
28by filed documents).
29§ 419. Termination of registration.
30(a) General rule.--The department may terminate the
1registration of a registered foreign association in the manner
2provided in subsections (b) and (c) if the department finds that
3the association:
4(1) has not amended its registration when required by
5section 413 (relating to amendment of foreign registration
6statement); or
7(2) has been administratively, voluntarily or
8involuntarily dissolved under the law of its jurisdiction of
9formation.
10(b) Notice by department.--The department may terminate the
11registration of a registered foreign association by taking both
12of the following actions:
13(1) Filing a notice of termination or noting the
14termination in the records of the department.
15(2) Delivering a copy of the notice or the information
16in the notation to the association's registered office or, if
17the association does not have a registered office, to the
18association's principal office.
19(c) Contents.--The notice shall state, or the information in
20the notation under subsection (b) shall include, both of the
21following:
22(1) The effective date of the termination, which shall
23be no less than 60 days after the date the department
24delivers the copy.
25(2) The grounds for termination under subsection (a).
26(d) Effectiveness or cure.--The registration of a registered
27foreign association to do business in this Commonwealth shall
28cease on the effective date of the notice of termination or
29notation under subsection (b), unless before that date the
30association cures each ground for termination stated in the
1notice or notation. If the association cures each ground, the
2department shall file a record stating as such.
3Section 10. Section 1103(a) introductory paragraph and the
4definitions of "articles," "dissenters rights," <-"distribution,"
5"foreign business corporation," "nonqualified foreign business
6corporation," "plan," "qualified foreign business corporation"
7and "registered corporation" of Title 15 are amended to read:
8§ 1103. Definitions.
9(a) General definitions.--Subject to additional definitions
10contained in subsequent provisions of this subpart that are
11applicable to specific provisions of this subpart, the following
12words and phrases when used in Part I (relating to preliminary
13provisions) or in this subpart shall have the meanings given to
14them in this section unless the context clearly indicates
15otherwise:
16* * *
17"Articles." The original articles of incorporation, all
18amendments thereof and any other articles, statements or
19certificates permitted or required to be filed in the Department
20of State by sections 108 (relating to change in location or
21status of registered office provided by agent) and 138 (relating
22to statement of correction), Chapter 3 (relating to entity
23transactions) or this subpart and including what have heretofore
24been designated by law as certificates of incorporation or
25charters. If an amendment of the articles or [articles of merger
26or division made in the manner permitted by this subpart] a
27statement filed under Chapter 3 restates articles in their
28entirety [or if there are articles of consolidation, conversion
29or domestication], thenceforth the "articles" shall not include
30any prior documents and any certificate issued by the department
1with respect thereto shall so state.
2* * *
3["Dissenters rights." The rights and remedies provided by
4Subchapter D of Chapter 15 (relating to dissenters rights).]
5* * *
<-6"Distribution." Â A direct or indirect transfer of money or
7other property (except its own shares or options, rights or
8warrants to acquire its own shares) or incurrence of
9indebtedness by a corporation to or for the benefit of any or
10all of its shareholders in respect of any of its shares whether
11by dividend or by purchase, redemption or other acquisition of
12its shares or otherwise. Neither the making of, nor payment or
13performance upon, a guaranty or similar arrangement by a
14corporation for the benefit of any or all of its shareholders
15nor a direct or indirect transfer or allocation of assets or
16liabilities effected under Chapter 3 (relating to entity
17transactions) or 19 (relating to fundamental changes) with the
18approval of the shareholders shall constitute a distribution for
19the purposes of this subpart.
20* * *
21"Foreign business corporation." A foreign corporation for
22profit subject to Chapter [41] 4 (relating to foreign [business
23corporations] associations), whether or not required to qualify
24thereunder.
25* * *
26["Nonqualified foreign business corporation." A foreign
27business corporation that is not a qualified foreign business
28corporation as defined in this section.]
29* * *
30["Plan." A plan of reclassification, merger, consolidation,
1exchange, asset transfer, division or conversion.]
2* * *
3["Qualified foreign business corporation." A foreign
4business corporation that is:
5(1) authorized under Chapter 41 (relating to foreign
6business corporations) to do business in this Commonwealth;
7or
8(2) a foreign insurance corporation.]
9* * *
10["Registered corporation." A corporation defined in section
112502 (relating to registered corporation status).]
12* * *
13Section 11. Sections 1105 and 1106 of Title 15 are amended
14to read:
15§ 1105. Restriction on equitable relief.
16A shareholder of a business corporation shall not have any
17right to obtain, in the absence of fraud or fundamental
18unfairness, an injunction against any proposed plan or amendment
19of articles authorized under any provision of this [subpart]
20title, nor any right to claim the right to valuation and payment
21of the fair value of his shares because of the plan or
22amendment, except that he may dissent and claim such payment if
23and to the extent provided in Subchapter D of Chapter 15
24(relating to dissenters rights) where this [subpart] title
25expressly provides that dissenting shareholders shall have the
26rights and remedies provided in that subchapter. Absent fraud or
27fundamental unfairness, the rights and remedies so provided
28shall be exclusive. Structuring a plan or transaction for the
29purpose or with the effect of eliminating or avoiding the
30application of dissenters rights is not fraud or fundamental
1unfairness within the meaning of this section.
2§ 1106. Uniform application of subpart.
3(a) General rule.--Except as provided in subsection (b),
4Part I (relating to preliminary provisions) and this subpart
5[and its amendments] are intended to provide uniform rules for
6the government and regulation of the affairs of business
7corporations and of their officers, directors and shareholders
8regardless of the date or manner of incorporation or
9qualification, or of the issuance of any shares thereof.
10(b) Exceptions.--
11(1) Unless expressly provided otherwise in any amendment
12to this subpart, the amendment shall take effect only
13prospectively.
14(2) An existing corporation lawfully using a name or, as
15part of its name, a word that could not be used as or
16included in the name of a corporation subsequently
17incorporated or qualified under this subpart may continue to
18use the name or word as part of its name if the use or
19inclusion of the word or name was lawful when first adopted
20by the corporation in this Commonwealth.
21(3) Subsection (a) shall not adversely affect the rights
22specifically provided for or saved in this [subpart] title.
23See:
24The provisions of section 341(c) (relating to interest
25exchange authorized).
26The provisions of section 351(c) (relating to conversion
27authorized).
28The transitional approval requirements set forth in
29section 363(d) (relating to approval of division).
30The provisions of section 1524(e) (relating to
1transitional provision).
2The provisions of section 1554(c) (relating to
3transitional provision).
4The cumulative voting rights set forth in section 1758(c)
5(2) (relating to cumulative voting).
6[The special voting requirements specified in section
71931(h) (relating to special requirements).
8The provisions of section 1952(g) and (h) (relating to
9proposal and adoption of plan of division).]
10The provisions of section 2301(d) (relating to
11transitional provisions).
12The provisions of section 2541(a)(2) and (3) and (c)
13(relating to application and effect of subchapter).
14The provisions of section 2543(b)(1) and (2) (relating to
15exceptions generally).
16The provisions of section 2551(b)(3)(i), (5) and (6)
17(relating to exceptions).
18The provisions of section 2553(b)(2) (relating to
19exception).
20(4) Except as otherwise expressly provided in the
21articles, a domestic corporation for profit that, on
22September 30, 1989, was not subject to the Business
23Corporation Law of 1933 and that thereafter becomes subject
24to this subpart by operation of law shall be deemed to have
25in effect articles that provide that the following provisions
26of this subpart shall not be applicable to the corporation:
27(i) Section 1726(a)(1) (relating to removal by the
28shareholders) insofar as it provides a statutory right on
29the part of shareholders to remove directors from office
30without assigning any cause.
1(ii) Section 1755(b)(2) (relating to special
2meetings).
3(iii) Section 1912(a)(2) (relating to proposal of
4amendments).
5Section 12. Sections 1303, 1304 and 1305 of Title 15 are
6repealed:
7[§ 1303. Corporate name.
8(a) General rule.--The corporate name may be in any
9language, but must be expressed in Roman letters or characters
10or Arabic or Roman numerals, and shall contain:
11(1) the word "corporation," "company," "incorporated" or
12"limited" or an abbreviation of any of them;
13(2) the word "association," "fund" or "syndicate"; or
14(3) words or abbreviations of like import in languages
15other than English.
16(b) Duplicate use of names.--The corporate name shall be
17distinguishable upon the records of the department from:
18(1) The name of any other domestic corporation for
19profit or not-for-profit which is either in existence or for
20which articles of incorporation have been filed but have not
21yet become effective, or of any foreign corporation for
22profit or not-for-profit which is either authorized to do
23business in this Commonwealth or for which an application for
24a certificate of authority has been filed but has not yet
25become effective, or the name of any association registered
26at any time under 54 Pa.C.S. Ch. 5 (relating to corporate and
27other association names), unless:
28(i) the other association:
29(A) has stated that it is about to change its
30name, or to cease to do business, or is being wound
1up, or is a foreign association about to withdraw
2from doing business in this Commonwealth, and the
3statement and a written consent to the adoption of
4the name is filed in the Department of State;
5(B) has filed with the Department of Revenue a
6certificate of out of existence, or has failed for a
7period of three successive years to file with the
8Department of Revenue a report or return required by
9law and the fact of such failure has been certified
10by the Department of Revenue to the Department of
11State;
12(C) has abandoned its name under the laws of its
13jurisdiction of incorporation, by amendment, merger,
14consolidation, division, expiration, dissolution or
15otherwise, without its name being adopted by a
16successor in a merger, consolidation, division or
17otherwise, and an official record of that fact,
18certified as provided by 42 Pa.C.S. § 5328 (relating
19to proof of official records), is presented by any
20person to the department; or
21(D) has had the registration of its name under
2254 Pa.C.S. Ch. 5 terminated.
23(2) A name the exclusive right to which is at the
24time reserved by any other person whatsoever in the
25manner provided by statute. A name shall be rendered
26unavailable for corporate use by reason of the filing in
27the Department of State of any assumed or fictitious name
28required by 54 Pa.C.S. Ch. 3 (relating to fictitious
29names) to be filed in the department only if and to the
30extent expressly so provided in that chapter.
1(c) Required approvals or conditions.--
2(1) The corporate name shall not imply that the
3corporation is:
4(i) A governmental agency of the Commonwealth or of
5the United States.
6(ii) A bank, bank and trust company, savings bank,
7private bank or trust company, as defined in the act of
8November 30, 1965 (P.L.847, No.356), known as the Banking
9Code of 1965, unless the corporation or proposed
10corporation is a Pennsylvania bank holding company or is
11otherwise authorized by statute to use its proposed name.
12(iii) An insurance company nor contain any of the
13words "annuity," "assurance," "beneficial," "bond,"
14"casualty," "endowment," "fidelity," "fraternal,"
15"guaranty," "indemnity," "insurance," "insurer,"
16"reassurance," "reinsurance," "surety" or "title" when
17used in such a way as to imply that the corporation is
18engaged in the business of writing insurance or
19reinsurance as principal or any other words of like
20purport unless it is duly licensed as an insurance
21company by its jurisdiction of incorporation or the
22Insurance Department certifies that it has no objection
23to the use by the corporation or proposed corporation of
24the designation. The corporate name of a domestic
25insurance corporation shall:
26(A) contain the word "mutual" if, and only if,
27it is a mutual insurance company; and
28(B) clearly designate the object and purpose of
29the corporation.
30(iv) A public utility corporation furnishing
1electric or gas service to the public, unless the
2corporation or proposed corporation has as an express
3corporate purpose the furnishing of service subject to
4the jurisdiction of the Pennsylvania Public Utility
5Commission or the Federal Energy Regulatory Commission.
6(v) A credit union. See 17 Pa.C.S. § 104 (relating
7to prohibition on use of words "credit union," etc.).
8(2) The corporate name shall not contain:
9(i) The word "college," "university" or "seminary"
10when used in such a way as to imply that it is an
11educational institution conforming to the standards and
12qualifications prescribed by the State Board of
13Education, unless there is submitted a certificate from
14the Department of Education certifying that the
15corporation or proposed corporation is entitled to use
16that designation.
17(ii) Words that constitute blasphemy, profane
18cursing or swearing or that profane the Lord's name.
19(iii) The words "engineer" or "engineering" or
20"surveyor" or "surveying" or any other word implying that
21any form of the practice of engineering or surveying as
22defined in the act of May 23, 1945 (P.L.913, No.367),
23known as the Professional Engineers Registration Law, is
24provided unless at least one of the incorporators of a
25proposed corporation or the directors of the existing
26corporation has been properly registered with the State
27Registration Board for Professional Engineers in the
28practice of engineering or surveying and there is
29submitted to the department a certificate from the board
30to that effect.
1(iv) The words "architect" or "architecture" or any
2other word implying that any form of the practice of
3architecture as defined in the act of December 14, 1982
4(P.L.1227, No.281), known as the Architects Licensure
5Law, is provided unless at least one of the incorporators
6of a proposed corporation or the directors of the
7existing corporation has been properly registered with
8the Architects Licensure Board in the practice of
9architecture and there is submitted to the department a
10certificate from the board to that effect.
11(v) The word "cooperative" or an abbreviation
12thereof unless the corporation is a cooperative
13corporation.
14(d) Other rights unaffected.--This section shall not
15abrogate or limit the law as to unfair competition or unfair
16practices nor derogate from the common law, the principles of
17equity or the provisions of Title 54 (relating to names) with
18respect to the right to acquire and protect trade names.
19Subsection (b) shall not apply if the applicant files in the
20department a certified copy of a final order of a court of
21competent jurisdiction establishing the prior right of the
22applicant to the use of a name in this Commonwealth.
23(e) Remedies for violation of section.--The use of a name in
24violation of this section shall not vitiate or otherwise affect
25the corporate existence, but any court having jurisdiction may
26enjoin the corporation from using or continuing to use a name in
27violation of this section upon the application of:
28(1) the Attorney General, acting on his own motion or at
29the instance of any administrative department, board or
30commission of this Commonwealth; or
1(2) any person adversely affected.
2(f) Cross references.--See sections 135(e) (relating to
3distinguishable names) and 1106(b)(2) (relating to uniform
4application of subpart).
5§ 1304. Required name changes by senior corporations.
6(a) Adoption of new name upon reactivation.--Where a
7corporate name is made available on the basis that the
8corporation or other association that formerly registered the
9name has failed to file in the Department of Revenue a report or
10a return required by law or where the corporation or other
11association has filed in the Department of Revenue a certificate
12of out of existence, the corporation or other association shall
13cease to have by virtue of its prior registration any right to
14the use of the name. The corporation or other association, upon
15withdrawal of the certificate of out of existence or upon the
16removal of its delinquency in the filing of the required reports
17or returns, shall make inquiry with the Department of State with
18regard to the availability of its name and, if the name has been
19made available to another domestic or foreign corporation for
20profit or not-for-profit or other association by virtue of these
21conditions, shall adopt a new name in accordance with law before
22resuming its activities.
23(b) Enforcement of undertaking to release name.--If a
24corporation has used a name that is not distinguishable upon the
25records of the Department of State from the name of another
26corporation or other association as permitted by section 1303(b)
27(1) (relating to duplicate use of names) and the other
28corporation or other association continues to use its name in
29this Commonwealth and does not change its name, cease to do
30business, be wound up or withdraw as it proposed to do in its
1consent or change its name as required by subsection (a), any
2court having jurisdiction may enjoin the other corporation or
3other association from continuing to use its name or a name that
4is not distinguishable therefrom upon the application of:
5(1) the Attorney General, acting on his own motion or at
6the instance of any administrative department, board or
7commission of this Commonwealth; or
8(2) any person adversely affected.
9§ 1305. Reservation of corporate name.
10(a) General rule.--The exclusive right to the use of a
11corporate name may be reserved by any person. The reservation
12shall be made by delivering to the Department of State an
13application to reserve a specified corporate name, executed by
14the applicant. If the department finds that the name is
15available for corporate use, it shall reserve the name for the
16exclusive use of the applicant for a period of 120 days.
17(b) Transfer of reservation.--The right to exclusive use of
18a specified corporate name reserved under subsection (a) may be
19transferred to any other person by delivering to the department
20a notice of the transfer, executed by the person who reserved
21the name, and specifying the name and address of the transferee.
22(c) Cross references.--See sections 134 (relating to
23docketing statement) and 4131 (relating to registration of
24name).]
25Section 13. Sections 1306(b), 1341(b)(3) and (d), 1571(a),
26(b), (c) and (h) and<-, 1575(a) introductory paragraph and (b) <-and
271704(b)(1) of Title 15 are amended to read:
28§ 1306. Articles of incorporation.
29* * *
30(b) Other provisions authorized.--A provision of the
1original articles or a provision of the articles approved by the
2shareholders, in either case adopted under subsection (a)(8)
3(ii), may relax or be inconsistent with and supersede any
4provision of Chapter 3 (relating to entity transactions), 13
5(relating to incorporation), 15 (relating to corporate powers,
6duties and safeguards), 17 (relating to officers, directors and
7shareholders) or 19 (relating to fundamental changes) concerning
8the subjects specified in subsection (a)(8)(ii), except where a
9provision of those chapters expressly provides that the articles
10shall not relax or be inconsistent with any provision on a
11specified subject. Notwithstanding the foregoing, the articles
12may provide greater rights for shareholders than are authorized
13by any provision of those chapters that otherwise provides that
14the articles shall not relax or be inconsistent with any
15provision on a specified subject.
16* * *
17§ 1341. Statement of revival.
18* * *
19(b) Contents of statement.--The statement of revival shall
20be executed in the name of the forfeited or expired corporation
21and shall, subject to section 109 (relating to name of
22commercial registered office provider in lieu of registered
23address), set forth:
24* * *
25(3) The name that the corporation adopts as its new name
26if the adoption of a new name is required by section [1304]
27207 (relating to required name changes by senior
28[corporations] associations).
29* * *
30(d) Cross [reference.--See section 134 (relating to
1docketing statement).] references.--See sections 134 (relating
2to docketing statement) and 135 (relating to requirements to be
3met by filed documents).
4§ 1571. Application and effect of subchapter.
5(a) General rule.--Except as otherwise provided in
6subsection (b), any shareholder (as defined in section 1572
7(relating to definitions)) of a business corporation shall have
8the [right to dissent from, and to obtain payment of the fair
9value of his shares in the event of, any corporate action, or to
10otherwise obtain fair value for his shares,] rights and remedies
11provided in this subchapter in connection with a transaction
12under this title only where this [part] title expressly provides
13that a shareholder shall have the rights and remedies provided
14in this subchapter. See:
15Section 329(c) (relating to special treatment of interest
16holders).
17Section 333 (relating to approval of merger).
18Section 343 (relating to approval of interest exchange).
19Section 353 (relating to approval of conversion).
20Section 363 (relating to approval of division).
21Section 1906(c) (relating to dissenters rights upon special
22treatment).
23[Section 1930 (relating to dissenters rights).
24Section 1931(d) (relating to dissenters rights in share
25exchanges).]
26Section 1932(c) (relating to dissenters rights in asset
27transfers).
28[Section 1952(d) (relating to dissenters rights in division).
29Section 1962(c) (relating to dissenters rights in
30conversion).]
1Section 2104(b) (relating to procedure).
2Section 2324 (relating to corporation option where a
3restriction on transfer of a security is held invalid).
4Section 2325(b) (relating to minimum vote requirement).
5Section 2704(c) (relating to dissenters rights upon
6election).
7Section 2705(d) (relating to dissenters rights upon renewal
8of election).
9Section 2904(b) (relating to procedure).
10Section 2907(a) (relating to proceedings to terminate breach
11of qualifying conditions).
12Section 7104(b)(3) (relating to procedure).
13(b) Exceptions.--
14(1) Except as otherwise provided in paragraph (2), the
15holders of the shares of any class or series of shares shall
16not have the right to dissent and obtain payment of the fair
17value of the shares under this subchapter if, on the record
18date fixed to determine the shareholders entitled to notice
19of and to vote at the meeting at which a plan specified in
20any of section [1930, 1931(d),] 333, 343, 353, 363 or 1932(c)
21[or 1952(d)] is to be voted on or on the date of the first
22public announcement that such a plan has been approved by the
23shareholders by consent without a meeting, the shares are
24either:
25(i) listed on a national securities exchange [or
26designated as a national market system security on an
27interdealer quotation system by the National Association
28of Securities Dealers, Inc.] registered under section 6
29of the Exchange Act; or
30(ii) held beneficially or of record by more than
12,000 persons.
2(2) Paragraph (1) shall not apply to and dissenters
3rights shall be available without regard to the exception
4provided in that paragraph in the case of:
5(ii) Shares of any preferred or special class or
6series unless the articles, the plan or the terms of the
7transaction entitle all shareholders of the class or
8series to vote thereon and require for the adoption of
9the plan or the effectuation of the transaction the
10affirmative vote of a majority of the votes cast by all
11shareholders of the class or series.
12(iii) Shares entitled to dissenters rights under
13section 329(d) or 1906(c) (relating to dissenters rights
14upon special treatment).
15(3) The shareholders of a corporation that acquires by
16purchase, lease, exchange or other disposition all or
17substantially all of the shares, property or assets of
18another corporation by the issuance of shares, obligations or
19otherwise, with or without assuming the liabilities of the
20other corporation and with or without the intervention of
21another corporation or other person, shall not be entitled to
22the rights and remedies of dissenting shareholders provided
23in this subchapter regardless of the fact, if it be the case,
24that the acquisition was accomplished by the issuance of
25voting shares of the corporation to be outstanding
26immediately after the acquisition sufficient to elect a
27majority or more of the directors of the corporation.
28(c) Grant of optional dissenters rights.--The bylaws or a
29resolution of the board of directors may direct that all or a
30part of the shareholders shall have dissenters rights in
1connection with any corporate action or other transaction that
2would otherwise not entitle such shareholders to dissenters
3rights. See section 317 (relating to contractual dissenters
4rights in entity transactions).
5* * *
6(h) Cross references.--[See sections 1105 (relating to
7restriction on equitable relief), 1904 (relating to de facto
8transaction doctrine abolished), 1763(c) (relating to
9determination of shareholders of record) and 2512 (relating to
10dissenters rights procedure).] See:
11Section 315 (relating to nature of transactions).
12Section 1105 (relating to restriction on equitable
13relief).
14Section 1763(c) (relating to determination of
15shareholders of record).
16Section 2512 (relating to dissenters rights procedure).
17§ 1575. Notice to demand payment.
18(a) General rule.--If the proposed corporate action is
19approved by the required vote at a meeting of shareholders of a
20business corporation, the corporation shall [mail] deliver a
21further notice to all dissenters who gave due notice of
22intention to demand payment of the fair value of their shares
23and who refrained from voting in favor of the proposed action.
24If the proposed corporate action is approved by the shareholders
25by less than unanimous consent without a meeting or is taken
26without the need for approval by the shareholders, the
27corporation shall [send] deliver to all shareholders who are
28entitled to dissent and demand payment of the fair value of
29their shares a notice of the adoption of the plan or other
30corporate action. In either case, the notice shall:
1* * *
2(b) Time for receipt of demand for payment.--The time set
3for receipt of the demand and deposit of certificated shares
4shall be not less than 30 days from the [mailing] delivery of
5the notice.
<-6§ 1704. Place and notice of meetings of shareholders.
7* * *
8(b) Notice.--Notice in record form of every meeting of the
9shareholders shall be given by, or at the direction of, the
10secretary or other authorized person to each shareholder of
11record entitled to vote at the meeting at least:
12(1) ten days prior to the day named for a meeting that
13will consider a transaction under Chapter 3 (relating to
14entity transactions) or a fundamental change under Chapter 19
15(relating to fundamental changes); or
16* * *
17Section 14. Section 1757(a) and (b) of Title 15 are amended
18and the section is amended by adding a subsection to read:
19§ 1757. Action by shareholders.
20(a) General rule.--Except as otherwise provided in this
21[subpart] title or in a bylaw adopted by the shareholders,
22whenever any corporate action is to be taken by vote of the
23shareholders of a business corporation, it shall be authorized
24upon receiving the affirmative vote of a majority of the votes
25cast by all shareholders entitled to vote thereon and, if any
26shareholders are entitled to vote thereon as a class, upon
27receiving the affirmative vote of a majority of the votes cast
28by the shareholders entitled to vote as a class.
29(b) Changes in required vote.--Whenever a provision of this
30[subpart] title requires a specified number or percentage of
1votes of shareholders or of a class of shareholders for the
2taking of any action, a business corporation may prescribe in a
3bylaw adopted by the shareholders that a higher number or
4percentage of votes shall be required for the action. See
5sections 1504(d) (relating to amendment of voting provisions)
6and 1914(e) (relating to amendment of voting provisions).
7* * *
8(d) Cross reference.--See section 321 (relating to approval
9by business corporation).
10Section 15. Section 1766(c) of Title 15 is amended to read:
11§ 1766. Consent of shareholders in lieu of meeting.
12* * *
13(c) Effectiveness of action by partial consent.--An action
14taken pursuant to subsection (b) to approve a transaction under
15Chapter 3 (relating to entity transactions) shall not become
16effective until after at least ten days' notice of the action
17has been given to each shareholder entitled to vote thereon who
18has not consented thereto. Any other action may become effective
19immediately, but prompt notice that the action has been taken
20shall be given to each shareholder entitled to vote thereon that
21has not consented. This subsection may not be relaxed by any
22provision of the articles.
23* * *
24Section 16. Sections 1901, 1902 1902(a) <-and 1904 of Title 15
25are <-repealed amended to read:
26[§ 1901. Omission of certain provisions from filed plans.
27(a) General rule.--A plan as filed in the Department of
28State under any provision of this chapter may omit all
29provisions of the plan except provisions, if any:
30(1) that are intended to amend or constitute the
1operative provisions of the articles of a corporation as in
2effect subsequent to the effective date of the plan; or
3(2) that allocate or specify the respective assets and
4liabilities of the resulting corporations, in the case of a
5plan of division.
6(b) Availability of full plan.--If any of the provisions of
7a plan are omitted from the plan as filed in the department, the
8articles of amendment, merger, consolidation, exchange, division
9or conversion shall state that the full text of the plan is on
10file at the principal place of business of the reclassifying,
11surviving or new or a resulting corporation and shall state the
12address thereof. A corporation that takes advantage of this
13section shall furnish a copy of the full text of the plan, on
14request and without cost, to any shareholder of any corporation
15that was a party to the plan and, unless all parties to the plan
16were closely held corporations, on request and at cost to any
17other person.<-]
18§ 1902. Statement of termination.
<-19(a) General rule.--If a statement with respect to shares,
20articles of amendment or articles of merger, consolidation,
21exchange, division or conversion of a business corporation or to
22which it is a party have been filed in the Department of State
23prior to the termination of the amendment or plan pursuant to
24provisions therefor set forth in the resolution or petition
25relating to the amendment or in the plan, the termination shall
26not be effective unless the corporation shall, prior to the time
27the amendment or plan is to become effective, file in the
28department a statement of termination. The statement of
29termination shall be executed by the corporation that filed the
30amendment or by each corporation that is a party to the plan,
1unless the plan permits termination by less than all of the
2corporations, in which case the statement shall be executed on
3behalf of the corporation or corporations exercising the right
4to terminate, and shall set forth:
5(1) A copy of the statement with respect to shares,
6articles of amendment or articles of merger, consolidation,
7exchange, division or conversion relating to the amendment or
8plan that is terminated.
9(2) A statement that the amendment or plan has been
10terminated in accordance with the provisions therefor set
11forth therein.
12(b) Cross references.--See sections 134 (relating to
13docketing statement) and 138 (relating to statement of
14correction).
15(a) General rule.--If [a statement with respect to shares,]
16articles of amendment [or articles of merger, consolidation,
17exchange, division or conversion of a business corporation or to
18which it is a party] have been filed in the [Department of
19State] department prior to the termination of the amendment [or
20plan] pursuant to provisions therefor set forth in the
21resolution or petition relating to the amendment [or in the
22plan], the termination shall not be effective unless the
23corporation shall, prior to the time the amendment [or plan] is
24to become effective, file in the department a statement of
25termination. The statement of termination shall be [executed]
26signed by the corporation that filed the amendment [or by each
27corporation that is a party to the plan, unless the plan permits
28termination by less than all of the corporations, in which case
29the statement shall be executed on behalf of the corporation or
30corporations exercising the right to terminate,] and shall set
1forth:
2(1) A copy of the [statement with respect to shares,]
3articles of amendment [or articles of merger, consolidation,
4exchange, division or conversion relating to the amendment or
5plan that is terminated].
6(2) A statement that the amendment [or plan] has been
7terminated in accordance with the provisions therefor set
8forth therein.
9* * *
10§ 1904. De facto transaction doctrine abolished.
11The doctrine of de facto mergers, consolidations and other
12fundamental transactions is abolished and the rules laid down by
13Bloch v. Baldwin Locomotive Works, 75 Pa. D. & C. 24 (C.P. Del.
14Cty. 1950), and Marks v. The Autocar Co., 153 F.Supp. 768 (E.D.
15Pa. 1954), and similar cases are overruled. A transaction that
16in form satisfies the requirements of this [subpart<-] title may
17be challenged by reason of its substance only to the extent
18permitted by section 1105 (relating to restriction on equitable
19relief).<-]
20Section 17. Section 1905 of Title 15 is amended to read:
21§ 1905. Proposal of fundamental transactions.
22Where any provision of this chapter requires that an
23amendment of the articles[, a plan] or the dissolution of a
24business corporation be proposed or approved by action of the
25board of directors, that requirement shall be construed to
26authorize and be satisfied by the written agreement or consent
27of all of the shareholders of the corporation entitled to vote
28thereon.
29Section 18. Section 1906(a), (d)(1) and (e) of Title 15 are
30amended and the section is amended by adding a subsection to
1read:
2§ 1906. Special treatment of holders of shares of same class or
3series.
4(a) General rule.--Except as otherwise restricted in the
5articles, a plan may contain a provision classifying the holders
6of shares of a class or series into one or more separate groups
7by reference to any facts or circumstances that are not
8manifestly unreasonable and providing mandatory treatment for
9shares of the class or series held by particular shareholders or
10groups of shareholders that differs materially from the
11treatment accorded other shareholders or groups of shareholders
12holding shares of the same class or series (including a
13provision modifying or rescinding rights previously created
14under this section) if:
15(1) (i) [such provision is specifically authorized by a
16majority of the votes cast by all shareholders entitled
17to vote on the plan, as well as] the plan is approved by
18a majority of the votes cast by any class or series of
19shares any of the shares of which are so classified into
20groups, whether or not such class or series would
21otherwise be entitled to vote on the plan; and
22(ii) the provision voted on specifically enumerates
23the type and extent of the special treatment authorized;
24or
25(2) under all the facts and circumstances, a court of
26competent jurisdiction finds such special treatment is
27undertaken in good faith, after reasonable deliberation and
28is in the best interest of the corporation.
29* * *
30(c.2) Notice to shareholders.--A notice to shareholders of a
1meeting called to act on a plan that provides for special
2treatment must state that the plan provides for special
3treatment. The notice must identify the shareholders receiving
4special treatment unless the notice is accompanied by either a
5summary of the plan that includes that information or the full
6text of the plan.
7(d) Exceptions.--This section shall not apply to:
8(1) [The creation or issuance of securities, contracts,
9warrants or other instruments evidencing any shares, option
10rights, securities having conversion or option rights or
11obligations authorized by section 2513 (relating to disparate
12treatment of certain persons).] (Reserved).
13* * *
14(e) Definition.--As used in this section, the term "plan"
15[includes] means:
16(1) an amendment of the articles that effects a
17reclassification of shares, whether or not the amendment is
18accompanied by a separate plan of reclassification; [and]
19(1.1) a plan of asset transfer adopted under section
201932(b) (relating to voluntary transfer of corporate assets);
21or
22(2) a resolution recommending that the corporation
23dissolve voluntarily adopted under section 1972(a) (relating
24to proposal of voluntary dissolution).
25Section 19. Section 1908 of Title 15 is amended to read:
26§ 1908. Submission of matters to shareholders.
27A business corporation may agree, in record form, to submit
28an amendment [or plan] or other matter to its shareholders
29whether or not the board of directors determines, at any time
30after approving the matter, that the matter is no longer
1advisable and recommends that the shareholders reject or vote
2against it, regardless of whether the board of directors changes
3its recommendation. If a corporation so agrees to submit a
4matter to its shareholders, the matter is deemed to have been
5validly adopted by the corporation when it has been approved by
6the shareholders.
7Section 20. Subchapter C heading of Chapter 19 of Title 15
8is amended to read:
9SUBCHAPTER C
10MERGER [,CONSOLIDATION, SHARE EXCHANGES] LIABILITIES AND
11SALE OF ASSETS
12Section 21. Sections 1921, 1922, 1923, 1924, 1925, 1926,
131927, 1928, 1929, 1930 and 1931 of Title 15 are repealed:
14[§ 1921. Merger and consolidation authorized.
15(a) Domestic surviving or new corporation.--Any two or more
16domestic business corporations, or any two or more foreign
17business corporations, or any one or more domestic business
18corporations and any one or more foreign business corporations,
19may, in the manner provided in this subchapter, be merged into
20one of the domestic business corporations, designated in this
21subchapter as the surviving corporation, or consolidated into a
22new corporation to be formed under this subpart, if the foreign
23business corporations are authorized by the laws of the
24jurisdiction under which they are incorporated to effect a
25merger or consolidation with a corporation of another
26jurisdiction.
27(b) Foreign surviving or new corporation.--Any one or more
28domestic business corporations, and any one or more foreign
29business corporations, may, in the manner provided in this
30subchapter, be merged into one of the foreign business
1corporations, designated in this subchapter as the surviving
2corporation, or consolidated into a new corporation to be
3incorporated under the laws of the jurisdiction under which one
4of the foreign business corporations is incorporated, if the
5laws of that jurisdiction authorize a merger with or
6consolidation into a corporation of another jurisdiction.
7(c) Business trusts, partnerships and other associations.--
8The provisions of this subchapter applicable to domestic and
9foreign business corporations shall also be applicable to a
10merger, consolidation or share exchange to which a domestic
11business corporation is a party or in which such a corporation
12is the resulting entity with, into or involving a domestic or
13foreign partnership, business trust or other association. The
14surviving, resulting or exchanging entity in such a merger,
15consolidation or share exchange may be a corporation,
16partnership, business trust or other association. Subject to the
17provisions of Subchapter F of Chapter 85 (relating to merger and
18consolidation), the powers and duties vested in and imposed upon
19the board of directors and shareholders in this subchapter shall
20be exercised and performed by the group of persons under the
21direction of whom the business and affairs of the partnership,
22business trust or other association are managed and the holders
23or owners of beneficial or other interests in the partnership,
24business trust or other association, respectively, irrespective
25of the names by which the managing group and the holders or
26owners of beneficial or other interests are designated. The
27units into which the beneficial or other interests in the
28partnership, business trust or other association are divided
29shall be deemed to be shares for the purposes of applying the
30provisions of this subchapter to a merger, consolidation or
1share exchange involving the partnership, business trust or
2other association. Dissenters rights shall be available to a
3holder of beneficial or other interests only to the extent, if
4any, provided by the law under which the partnership, business
5trust or other association is organized.
6§ 1922. Plan of merger or consolidation.
7(a) Preparation of plan.--A plan of merger or consolidation,
8as the case may be, shall be prepared, setting forth:
9(1) The terms and conditions of the merger or
10consolidation.
11(2) If the surviving or new corporation is or is to be a
12domestic business corporation:
13(i) any changes desired to be made in the articles,
14which may include a restatement of the articles in the
15case of a merger; or
16(ii) in the case of a consolidation, all of the
17statements required by this subpart to be set forth in
18restated articles.
19(3) The manner and basis of converting the shares of
20each corporation into shares or other securities or
21obligations of the surviving or new corporation, or of
22canceling some or all of the shares of a corporation, as the
23case may be, and, if any of the shares of any of the
24corporations that are parties to the merger or consolidation
25are not to be canceled or converted solely into shares or
26other securities or obligations of the surviving or new
27corporation, the shares or other securities or obligations of
28any other person or cash, property or rights that the holders
29of such shares are to receive in exchange for, or upon
30conversion of, such shares, and the surrender of any
1certificates evidencing them, which securities or
2obligations, if any, of any other person or cash, property or
3rights may be in addition to or in lieu of the shares or
4other securities or obligations of the surviving or new
5corporation.
6(4) Any provisions desired providing special treatment
7of shares held by any shareholder or group of shareholders as
8authorized by, and subject to the provisions of, section 1906
9(relating to special treatment of holders of shares of same
10class or series).
11(5) Such other provisions as are deemed desirable.
12(b) Post-adoption amendment.--A plan of merger or
13consolidation may contain a provision that the boards of
14directors of the constituent corporations may amend the plan at
15any time prior to its effective date, except that an amendment
16made subsequent to the adoption of the plan by the shareholders
17of any constituent domestic business corporation shall not
18change:
19(1) The amount or kind of shares, obligations, cash,
20property or rights to be received in exchange for or on
21conversion of all or any of the shares of the constituent
22domestic business corporation adversely to the holders of
23those shares.
24(2) Any provision of the articles of the surviving or
25new corporation as it is to be in effect immediately
26following consummation of the merger or consolidation except
27provisions that may be amended without the approval of the
28shareholders under section 1914(c)(2) (relating to adoption
29of amendments).
30(3) Any of the other terms and conditions of the plan if
1the change would adversely affect the holders of any shares
2of the constituent domestic business corporation.
3(c) Proposal.--Except where the approval of the board of
4directors is unnecessary under this subchapter, every merger or
5consolidation shall be proposed in the case of each domestic
6business corporation by the adoption by the board of directors
7of a resolution approving the plan of merger or consolidation.
8Except where the approval of the shareholders is unnecessary
9under this subchapter, the board of directors shall direct that
10the plan be submitted to a vote of the shareholders entitled to
11vote thereon at a regular or special meeting of the
12shareholders.
13(d) Party to plan or transaction.--A corporation,
14partnership, business trust or other association that approves a
15plan in its capacity as a shareholder or creditor of a merging
16or consolidating corporation, or that furnishes all or a part of
17the consideration contemplated by a plan, does not thereby
18become a party to the plan or the merger or consolidation for
19the purposes of this subchapter.
20(e) Reference to outside facts.--Any of the terms of a plan
21of merger or consolidation may be made dependent upon facts
22ascertainable outside of the plan if the manner in which the
23facts will operate upon the terms of the plan is set forth in
24the plan. Such facts may include, without limitation, actions or
25events within the control of or determinations made by a party
26to the plan or a representative of a party to the plan.
27§ 1923. Notice of meeting of shareholders.
28(a) General rule.--Notice in record form of the meeting of
29shareholders that will act on the proposed plan must be given to
30each shareholder of record, whether or not entitled to vote
1thereon, of each domestic business corporation that is a party
2to the merger or consolidation. The notice must include or be
3accompanied by the proposed plan or a summary thereof. If
4Subchapter D of Chapter 15 (relating to dissenters rights) is
5applicable to the holders of shares of any class or series, the
6text of that subchapter and of section 1930 (relating to
7dissenters rights) must be furnished to the holders of shares of
8that class or series. If the surviving or new corporation will
9be a nonregistered corporation, the notice must state that a
10copy of its bylaws as they will be in effect immediately
11following the merger or consolidation will be furnished to any
12shareholder on request and without cost.
13(b) Cross references.--See Subchapter A of Chapter 17
14(relating to notice and meetings generally) and sections 2512
15(relating to dissenters rights procedure) and 2528 (relating to
16notice of shareholder meetings).
17§ 1924. Adoption of plan.
18(a) General rule.--The plan of merger or consolidation shall
19be adopted upon receiving the affirmative vote of a majority of
20the votes cast by all shareholders entitled to vote thereon of
21each of the domestic business corporations that is a party to
22the merger or consolidation and, if any class or series of
23shares is entitled to vote thereon as a class, the affirmative
24vote of a majority of the votes cast in each class vote. The
25holders of any class or series of shares of a domestic
26corporation that is a party to a merger or consolidation that
27effects any change in the articles of the corporation shall be
28entitled to vote as a class on the plan if they would have been
29entitled to a class vote under the provisions of section 1914
30(relating to adoption of amendments) had the change been
1accomplished under Subchapter B (relating to amendment of
2articles). A proposed plan of merger or consolidation shall not
3be deemed to have been adopted by the corporation unless it has
4also been approved by the board of directors, regardless of the
5fact that the board has directed or suffered the submission of
6the plan to the shareholders for action.
7(b) Adoption by board of directors.--
8(1) Unless otherwise required by its bylaws, a plan of
9merger or consolidation shall not require the approval of the
10shareholders of a constituent domestic business corporation
11if:
12(i) whether or not the constituent corporation is
13the surviving corporation:
14(A) the surviving or new corporation is a
15domestic business corporation and the articles of the
16surviving or new corporation are identical to the
17articles of the constituent corporation, except
18changes that under section 1914(c) (relating to
19adoption by board of directors) may be made without
20shareholder action;
21(B) each share of the constituent corporation
22outstanding immediately prior to the effective date
23of the merger or consolidation is to continue as or
24to be converted into, except as may be otherwise
25agreed by the holder thereof, an identical share of
26the surviving or new corporation after the effective
27date of the merger or consolidation; and
28(C) the plan provides that the shareholders of
29the constituent corporation are to hold in the
30aggregate shares of the surviving or new corporation
1to be outstanding immediately after the effectiveness
2of the plan entitled to cast at least a majority of
3the votes entitled to be cast generally for the
4election of directors;
5(ii) immediately prior to the adoption of the plan
6and at all times thereafter prior to its effective date,
7another corporation that is a party to the plan owns
8directly or indirectly 80% or more of the outstanding
9shares of each class of the constituent corporation; or
10(iii) no shares of the constituent corporation have
11been issued prior to the adoption of the plan of merger
12or consolidation by the board of directors pursuant to
13section 1922 (relating to plan of merger or
14consolidation).
15(2) If a merger or consolidation is effected pursuant to
16paragraph (1)(i) or (iii), the plan of merger or
17consolidation shall be deemed adopted by the constituent
18corporation when it has been adopted by the board of
19directors pursuant to section 1922.
20(3) If a merger or consolidation of a subsidiary
21corporation with a parent corporation is effected pursuant to
22paragraph (1)(ii), the plan of merger or consolidation shall
23be deemed adopted by the subsidiary corporation when it has
24been adopted by the board of the parent corporation and
25neither approval of the plan by the board of directors of the
26subsidiary corporation nor execution of articles of merger or
27consolidation by the subsidiary corporation shall be
28necessary.
29(4) (i) Unless otherwise required by its bylaws, a plan
30of merger or consolidation providing for the merger or
1consolidation of a domestic business corporation
2(referred to in this paragraph as the "constituent
3corporation") with or into a single indirect wholly owned
4subsidiary (referred to in this paragraph as the
5"subsidiary corporation") of the constituent corporation
6shall not require the approval of the shareholders of
7either the constituent corporation or the subsidiary
8corporation if all of the provisions of this paragraph
9are satisfied.
10(ii) A merger or consolidation under this paragraph
11shall satisfy the following conditions:
12(A) The constituent corporation and the
13subsidiary corporation are the only parties to the
14merger or consolidation, other than the resulting
15corporation, if any, in a consolidation (the
16corporation that survives or results from the merger
17or consolidation is referred to in this paragraph as
18the "resulting subsidiary").
19(B) Each share or fraction of a share of the
20capital stock of the constituent corporation
21outstanding immediately prior to the effective time
22of the merger or consolidation is converted in the
23merger or consolidation into a share or equal
24fraction of a share of capital stock of a holding
25company having the same designations, rights, powers
26and preferences and the qualifications, limitations
27and restrictions as the share of stock of the
28constituent corporation being converted in the merger
29or consolidation.
30(C) The holding company and the resulting
1subsidiary are each domestic business corporations.
2(D) Immediately following the effective time of
3the merger or consolidation, the articles of
4incorporation and bylaws of the holding company are
5identical to the articles of incorporation and bylaws
6of the constituent corporation immediately before the
7effective time of the merger or consolidation except
8for changes that could be made without shareholder
9approval under section 1914(c) (relating to adoption
10by board of directors).
11(E) Immediately following the effective time of
12the merger or consolidation, the resulting subsidiary
13is a direct or indirect wholly owned subsidiary of
14the holding company.
15(F) The directors of the constituent corporation
16become or remain the directors of the holding company
17upon the effective time of the merger or
18consolidation.
19(G) The board of directors of the constituent
20corporation has made a good faith determination that
21the shareholders of the constituent corporation will
22not recognize gain or loss for United States Federal
23Income Tax purposes.
24(iii) As used in this paragraph only, the term
25"holding company" means a corporation that, from its
26incorporation until consummation of the merger or
27consolidation governed by this paragraph, was at all
28times a direct wholly owned subsidiary of the constituent
29corporation and whose capital stock is issued in the
30merger or consolidation.
1(iv) If the holding company is a registered
2corporation, the shares of the holding company issued in
3connection with the merger or consolidation shall be
4deemed to have been acquired at the time that the shares
5of the constituent corporation converted in the merger or
6consolidation were acquired.
7(5) A plan of merger or consolidation adopted by the
8board of directors under this subsection without the approval
9of the shareholders shall not, by itself, create or impair
10any rights or obligations on the part of any person under
11section 2538 (relating to approval of transactions with
12interested shareholders) or under Subchapters E (relating to
13control transactions), F (relating to business combinations),
14G (relating to control-share acquisitions), H (relating to
15disgorgement by certain controlling shareholders following
16attempts to acquire control), I (relating to severance
17compensation for employees terminated following certain
18control-share acquisitions) and J (relating to business
19combination transactions - labor contracts) of Chapter 25,
20nor shall it change the standard of care applicable to the
21directors under Subchapter B of Chapter 17 (relating to
22fiduciary duty).
23(c) Termination of plan.--Prior to the time when a merger or
24consolidation becomes effective, the merger or consolidation may
25be terminated pursuant to provisions therefor, if any, set forth
26in the plan. If articles of merger or consolidation have been
27filed in the Department of State prior to the termination, a
28statement under section 1902 (relating to statement of
29termination) shall be filed in the department.
30(d) Cross reference.--See section 2539 (relating to adoption
1of plan of merger by board of directors).
2§ 1925. Authorization by foreign corporations.
3The plan of merger or consolidation shall be authorized,
4adopted or approved by each foreign business corporation that
5desires to merge or consolidate in accordance with the laws of
6the jurisdiction in which it is incorporated.
7§ 1926. Articles of merger or consolidation.
8Upon the adoption of the plan of merger or consolidation by
9the corporations desiring to merge or consolidate, as provided
10in this subchapter, articles of merger or articles of
11consolidation, as the case may be, shall, except as provided by
12section 1924(b)(3) (relating to adoption by board of directors),
13be executed by each corporation and shall, subject to section
14109 (relating to name of commercial registered office provider
15in lieu of registered address), set forth:
16(1) The name and the location of the registered office,
17including street and number, if any, of the domestic
18surviving or new corporation or, in the case of a foreign
19surviving or new corporation, the name of the corporation and
20its jurisdiction of incorporation, together with either:
21(i) If a qualified foreign business corporation, the
22address, including street and number, if any, of its
23registered office in this Commonwealth.
24(ii) If a nonqualified foreign business corporation,
25the address, including street and number, if any, of its
26principal office under the laws of the jurisdiction in
27which it is incorporated.
28(2) The name and address, including street and number,
29if any, of the registered office of each other domestic
30business corporation and qualified foreign business
1corporation that is a party to the merger or consolidation.
2(3) If the plan is to be effective on a specified date,
3the hour, if any, and the month, day and year of the
4effective date.
5(4) The manner in which the plan was adopted by each
6domestic corporation and, if one or more foreign corporations
7are parties to the merger or consolidation, the fact that the
8plan was authorized, adopted or approved, as the case may be,
9by each of the foreign corporations in accordance with the
10laws of the jurisdiction in which it is incorporated.
11(5) Except as provided in section 1901 (relating to
12omission of certain provisions from filed plans), the plan of
13merger or consolidation.
14§ 1927. Filing of articles of merger or consolidation.
15(a) General rule.--The articles of merger or articles of
16consolidation, as the case may be, and the certificates or
17statement, if any, required by section 139 (relating to tax
18clearance of certain fundamental transactions) shall be filed in
19the Department of State.
20(b) Cross reference.--See section 134 (relating to docketing
21statement).
22§ 1928. Effective date of merger or consolidation.
23Upon the filing of the articles of merger or the articles of
24consolidation in the Department of State or upon the effective
25date specified in the plan of merger or consolidation, whichever
26is later, the merger or consolidation shall be effective. The
27merger or consolidation of one or more domestic business
28corporations into a foreign business corporation shall be
29effective according to the provisions of law of the jurisdiction
30in which the foreign corporation is incorporated, but not until
1articles of merger or articles of consolidation have been
2adopted and filed, as provided in this subchapter.
3§ 1929. Effect of merger or consolidation.
4(a) Single surviving or new corporation.--Upon the merger or
5consolidation becoming effective, the several corporations
6parties to the merger or consolidation shall be a single
7corporation which, in the case of a merger, shall be the
8corporation designated in the plan of merger as the surviving
9corporation and, in the case of a consolidation, shall be the
10new corporation provided for in the plan of consolidation. The
11separate existence of all corporations parties to the merger or
12consolidation shall cease, except that of the surviving
13corporation, in the case of a merger. The surviving or new
14corporation, as the case may be, if it is a domestic business
15corporation, shall not thereby acquire authority to engage in
16any business or exercise any right that a corporation may not be
17incorporated under this subpart to engage in or exercise.
18(b) Property rights.--All the property, real, personal and
19mixed, and franchises of each of the corporations parties to the
20merger or consolidation, and all debts due on whatever account
21to any of them, including subscriptions for shares and other
22choses in action belonging to any of them, shall be deemed to be
23vested in and shall belong to the surviving or new corporation,
24as the case may be, without further action, and the title to any
25real estate, or any interest therein, vested in any of the
26corporations shall not revert or be in any way impaired by
27reason of the merger or consolidation. The surviving or new
28corporation shall thenceforth be responsible for all the
29liabilities of each of the corporations so merged or
30consolidated. Liens upon the property of the merging or
1consolidating corporations shall not be impaired by the merger
2or consolidation and any claim existing or action or proceeding
3pending by or against any of the corporations may be prosecuted
4to judgment as if the merger or consolidation had not taken
5place or the surviving or new corporation may be proceeded
6against or substituted in its place.
7(c) Taxes.--Any taxes, interest, penalties and public
8accounts of the Commonwealth claimed against any of the merging
9or consolidating corporations that are settled, assessed or
10determined prior to or after the merger or consolidation shall
11be the liability of the surviving or new corporation and,
12together with interest thereon, shall be a lien against the
13franchises and property, both real and personal, of the
14surviving or new corporation.
15(d) Articles of incorporation.--In the case of a merger, the
16articles of incorporation of the surviving domestic business
17corporation, if any, shall be deemed to be amended to the
18extent, if any, that changes in its articles are stated in the
19plan of merger. In the case of a consolidation into a domestic
20business corporation, the statements that are set forth in the
21plan of consolidation, or articles of incorporation set forth
22therein, shall be deemed to be the articles of incorporation of
23the new corporation.
24§ 1930. Dissenters rights.
25(a) General rule.--If any shareholder of a domestic business
26corporation that is to be a party to a merger or consolidation
27pursuant to a plan of merger or consolidation objects to the
28plan of merger or consolidation and complies with the provisions
29of Subchapter D of Chapter 15 (relating to dissenters rights),
30the shareholder shall be entitled to the rights and remedies of
1dissenting shareholders therein provided, if any. See also
2section 1906(c) (relating to dissenters rights upon special
3treatment).
4(b) Plans adopted by directors only.--Except as otherwise
5provided pursuant to section 1571(c) (relating to grant of
6optional dissenters rights), Subchapter D of Chapter 15 shall
7not apply to any of the shares of a corporation that is a party
8to a merger or consolidation pursuant to section 1924(b)(1)(i)
9or (4) (relating to adoption by board of directors).
10(c) Cross references.--See sections 1571(b) (relating to
11exceptions) and 1904 (relating to de facto transaction doctrine
12abolished).
13§ 1931. Share exchanges.
14(a) General rule.--All the outstanding shares of one or more
15classes or series of a domestic business corporation, designated
16in this section as the exchanging corporation, may, in the
17manner provided in this section, be acquired by any person,
18designated in this section as the acquiring person, through an
19exchange of all the shares pursuant to a plan of exchange. The
20plan of exchange may also provide for the shares of any other
21class or series of the exchanging corporation to be canceled or
22converted into shares, other securities or obligations of any
23person or cash, property or rights. The procedure authorized by
24this section shall not be deemed to limit the power of any
25person to acquire all or part of the shares or other securities
26of any class or series of a corporation through a voluntary
27exchange or otherwise by agreement with the holders of the
28shares or other securities.
29(b) Plan of exchange.--A plan of exchange shall be prepared,
30setting forth:
1(1) The terms and conditions of the exchange.
2(2) The manner and basis of canceling the shares of the
3exchanging corporation or exchanging or converting the shares
4of the exchanging corporation into shares or other securities
5or obligations of the acquiring person, and, if any of the
6shares of the exchanging corporation are not to be exchanged
7or converted solely into shares or other securities or
8obligations of the acquiring person, the shares or other
9securities or obligations of any other person or cash,
10property or rights that the holders of the shares of the
11exchanging corporation are to receive in exchange for, or
12upon conversion of, the shares and the surrender of any
13certificates evidencing them, which securities or
14obligations, if any, of any other person or cash, property
15and rights may be in addition to or in lieu of the shares or
16other securities or obligations of the acquiring person.
17(3) Any changes desired to be made in the articles of
18the exchanging corporation, which may include a restatement
19of the articles.
20(4) Any provisions desired providing special treatment
21of shares held by any shareholder or group of shareholders as
22authorized by, and subject to the provisions of, section 1906
23(relating to special treatment of holders of shares of same
24class or series). Notwithstanding subsection (a), a plan that
25provides special treatment may affect less than all of the
26outstanding shares of a class or series.
27(5) Such other provisions as are deemed desirable.
28(c) Proposal and adoption.--The plan of exchange shall be
29proposed and adopted and may be amended after its adoption and
30terminated by the exchanging corporation in the manner provided
1by this subchapter for the proposal, adoption, amendment and
2termination of a plan of merger except section 1924(b) (relating
3to adoption by board of directors). There shall be included in,
4or enclosed with, the notice of the meeting of shareholders to
5act on the plan a copy or a summary of the plan and, if
6Subchapter D of Chapter 15 (relating to dissenters rights) is
7applicable, a copy of the subchapter and of subsection (d). The
8holders of any class of shares to be exchanged or converted
9pursuant to the plan of exchange shall be entitled to vote as a
10class on the plan if they would have been entitled to vote on a
11plan of merger that affects the class in substantially the same
12manner as the plan of exchange.
13(d) Dissenters rights in share exchanges.--Any holder of
14shares that are to be canceled, exchanged or converted pursuant
15to a plan of exchange who objects to the plan and complies with
16the provisions of Subchapter D of Chapter 15 shall be entitled
17to the rights and remedies of dissenting shareholders therein
18provided, if any. See section 1906(c) (relating to dissenters
19rights upon special treatment).
20(e) Articles of exchange.--Upon adoption of a plan of
21exchange, as provided in this section, articles of exchange
22shall be executed by the exchanging corporation and shall set
23forth:
24(1) The name and, subject to section 109 (relating to
25name of commercial registered office provider in lieu of
26registered address), the location of the registered office,
27including street and number, if any, of the exchanging
28corporation.
29(2) If the plan is to be effective on a specified date,
30the hour, if any, and the month, day and year of the
1effective date.
2(3) The manner in which the plan was adopted by the
3exchanging corporation.
4(4) Except as provided in section 1901 (relating to
5omission of certain provisions from filed plans), the plan of
6exchange.
7The articles of exchange shall be filed in the Department of
8State. See sections 134 (relating to docketing statement) and
9135 (relating to requirements to be met by filed documents).
10(f) Effective date.--Upon the filing of articles of exchange
11in the department or upon the effective date specified in the
12plan of exchange, whichever is later, the plan shall become
13effective.
14(g) Effect of plan.--Upon the plan of exchange becoming
15effective, the shares of the exchanging corporation that are,
16under the terms of the plan, to be canceled, converted or
17exchanged shall cease to exist or shall be converted or
18exchanged. The former holders of the shares shall thereafter be
19entitled only to the shares, other securities or obligations or
20cash, property or rights into which they have been converted or
21for which they have been exchanged in accordance with the plan,
22and the acquiring person shall be the holder of the shares of
23the exchanging corporation stated in the plan to be acquired by
24such person. The articles of incorporation of the exchanging
25corporation shall be deemed to be amended to the extent, if any,
26that changes in its articles are stated in the plan of exchange.
27(h) Special requirements.--If any provision of the articles
28or bylaws of an exchanging domestic business corporation adopted
29before October 1, 1989, requires for the proposal or adoption of
30a plan of merger, consolidation or asset transfer a specific
1number or percentage of votes of directors or shareholders or
2other special procedures, the plan of exchange shall not be
3proposed by the directors or adopted by the shareholders without
4that number or percentage of votes or compliance with the other
5special procedures.
6(i) Reference to outside facts.--Any of the terms of a plan
7of exchange may be made dependent upon facts ascertainable
8outside of the plan if the manner in which the facts will
9operate upon the terms of the plan is set forth in the plan.
10Such facts may include, without limitation, actions or events
11within the control of or determinations made by a party to the
12plan or a representative of a party to the plan.]
13Section 22. Section 1932(b)(1), (2) and (4) of Title 15 are
14amended to read:
15§ 1932. Voluntary transfer of corporate assets.
16* * *
17(b) Shareholder approval required.--
18(1) A sale, lease, exchange or other disposition of all,
19or substantially all, the property and assets, with or
20without the goodwill, of a business corporation, if not made
21pursuant to subsection (a) or (d) or to section 1551
22(relating to distributions to shareholders) or Subchapter [D]
23F of Chapter 3 (relating to division), may be made only
24pursuant to a plan of asset transfer in the manner provided
25in this subsection. A corporation selling, leasing or
26otherwise disposing of all, or substantially all, its
27property and assets is referred to in this subsection and in
28subsection (c) as the "transferring corporation."
29(2) The property or assets of a direct or indirect
30subsidiary corporation that is controlled by a parent
1corporation shall also be deemed the property or assets of
2the parent corporation for the purposes of this subsection
3and of subsection (c). A merger [or consolidation] to which
4such a subsidiary corporation is a party and in which a third
5party acquires direct or indirect ownership of the property
6or assets of the subsidiary corporation constitutes an "other
7disposition" of the property or assets of the parent
8corporation within the meaning of that term as used in this
9section.
10* * *
11(4) The plan of asset transfer shall be proposed and
12adopted, and may be amended after its adoption and
13terminated, by the transferring corporation in the manner
14provided in [this subchapter] Chapter 3 (relating to entity
15transactions) for the proposal, adoption, amendment and
16termination of a plan of merger, except section [1924(b)
17(relating to adoption by board of directors)] 321(d)
18(relating to approval by business corporation). The
19procedures of [this subchapter] Chapter 3 shall not be
20applicable to the person acquiring the property or assets of
21the transferring corporation. There shall be included in, or
22enclosed with, the notice of the meeting of the shareholders
23of the transferring corporation to act on the plan a copy or
24a summary of the plan and, if Subchapter D of Chapter 15
25(relating to dissenters rights) is applicable, a copy of the
26subchapter and of subsection (c).
27* * *
28Section 23. Subchapter D heading and sections 1951, 1952,
291953, 1954, 1955, 1956, 1957, Subchapter E and section 1980 of
30Chapter 19 of Title 15 are repealed:
1[SUBCHAPTER D
2DIVISION
3§ 1951. Division authorized.
4(a) Division of domestic corporation.--Any domestic business
5corporation may, in the manner provided in this subchapter, be
6divided into two or more domestic business corporations
7incorporated or to be incorporated under this article, or into
8one or more domestic business corporations and one or more
9foreign business corporations to be incorporated under the laws
10of another jurisdiction or jurisdictions, or into two or more
11foreign business corporations, if the laws of the other
12jurisdictions authorize the division.
13(b) Division of foreign corporation.--Any foreign business
14corporation may, in the manner provided in this subchapter, be
15divided into one or more domestic business corporations to be
16incorporated under this subpart and one or more foreign business
17corporations incorporated or to be incorporated under the laws
18of another jurisdiction or jurisdictions, or into two or more
19domestic business corporations, if the foreign business
20corporation is authorized under the laws of the jurisdiction
21under which it is incorporated to effect a division.
22(c) Surviving and new corporations.--The corporation
23effecting a division, if it survives the division, is designated
24in this subchapter as the surviving corporation. All
25corporations originally incorporated by a division are
26designated in this subchapter as new corporations. The surviving
27corporation, if any, and the new corporation or corporations are
28collectively designated in this subchapter as the resulting
29corporations.
30§ 1952. Proposal and adoption of plan of division.
1(a) Preparation of plan.--A plan of division shall be
2prepared, setting forth:
3(1) The terms and conditions of the division, including
4the manner and basis of:
5(i) The reclassification of the shares of the
6surviving corporation, if there be one, and, if any of
7the shares of the dividing corporation are not to be
8converted solely into shares or other securities or
9obligations of one or more of the resulting corporations,
10the shares or other securities or obligations of any
11other person, or cash, property or rights that the
12holders of such shares are to receive in exchange for or
13upon conversion of such shares, and the surrender of any
14certificates evidencing them, which securities or
15obligations, if any, of any other person or cash,
16property or rights may be in addition to or in lieu of
17shares or other securities or obligations of one or more
18of the resulting corporations.
19(ii) The disposition of the shares and other
20securities or obligations, if any, of the new corporation
21or corporations resulting from the division.
22(2) A statement that the dividing corporation will, or
23will not, survive the division.
24(3) Any changes desired to be made in the articles of
25the surviving corporation, if there be one, including a
26restatement of the articles.
27(4) The articles of incorporation required by subsection
28(b).
29(5) Any provisions desired providing special treatment
30of shares held by any shareholder or group of shareholders as
1authorized by, and subject to the provisions of, section 1906
2(relating to special treatment of holders of shares of same
3class or series).
4(6) Such other provisions as are deemed desirable.
5(b) Articles of new corporations.--There shall be included
6in or annexed to the plan of division:
7(1) Articles of incorporation, which shall contain all
8of the statements required by this subpart to be set forth in
9restated articles, for each of the new domestic business
10corporations, if any, resulting from the division.
11(2) Articles of incorporation, certificates of
12incorporation or other charter documents for each of the new
13foreign business corporations, if any, resulting from the
14division.
15(c) Proposal and adoption.--Except as otherwise provided in
16section 1953 (relating to division without shareholder
17approval), the plan of division shall be proposed and adopted,
18and may be amended after its adoption and terminated, by a
19domestic business corporation in the manner provided for the
20proposal, adoption, amendment and termination of a plan of
21merger in Subchapter C (relating to merger, consolidation, share
22exchanges and sale of assets), except section 1924(b) (relating
23to adoption by board of directors), or, if the dividing
24corporation is a foreign business corporation, in accordance
25with the laws of the jurisdiction in which it is incorporated.
26There shall be included in, or enclosed with, the notice of the
27meeting of shareholders to act on the plan a copy or a summary
28of the plan and, if Subchapter D of Chapter 15 (relating to
29dissenters rights) is applicable, a copy of the subchapter and
30of subsection (d).
1(d) Dissenters rights in division.--
2(1) Except as otherwise provided in paragraph (2), any
3shareholder of a business corporation that adopts a plan of
4division who objects to the plan and complies with the
5provisions of Subchapter D of Chapter 15 shall be entitled to
6the rights and remedies of dissenting shareholders therein
7provided, if any. See section 1906(c) (relating to dissenters
8rights upon special treatment).
9(2) Except as otherwise provided pursuant to section
101571(c) (relating to grant of optional dissenters rights),
11Subchapter D of Chapter 15 shall not apply to any of the
12shares of a corporation that is a party to a plan of division
13pursuant to section 1953 (relating to division without
14shareholder approval).
15(f) Action by holders of preferred or special shares.--If
16the dividing corporation has outstanding any shares of any
17preferred or special class or series, the holders of the
18outstanding shares of the class or series shall be entitled to
19vote as a class on the plan regardless of any limitations stated
20in the articles or bylaws on the voting rights of the class or
21series if the plan of division:
22(1) provides that the dividing corporation will not
23survive the division; or
24(2) amends the articles or bylaws of the surviving
25corporation in a manner that would entitle the holders of
26such preferred or special shares to a class vote thereon
27under the articles, bylaws or section 1914(b) (relating to
28statutory voting rights).
29(g) Rights of holders of indebtedness.--If any debt
30securities, notes or similar evidences of indebtedness for money
1borrowed, whether secured or unsecured, indentures or other
2contracts were issued, incurred or executed by the dividing
3corporation before August 21, 2001, and have not been amended
4subsequent to that date, the liability of the dividing
5corporation thereunder shall not be affected by the division nor
6shall the rights of the obligees thereunder be impaired by the
7division, and each of the resulting corporations may be
8proceeded against or substituted in place of the dividing
9corporation as joint and several obligors on such liability,
10regardless of any provision of the plan of division apportioning
11the liabilities of the dividing corporation.
12(h) Special requirements.--If any provision of the articles
13or bylaws of a dividing domestic business corporation adopted
14before October 1, 1989, requires for the proposal or adoption of
15a plan of merger, consolidation or asset transfer a specific
16number or percentage of votes of directors or shareholders or
17other special procedures, the plan of division shall not be
18proposed or adopted by the directors or (if adoption by the
19shareholders is otherwise required by this subchapter) adopted
20by the shareholders without that number or percentage of votes
21or compliance with the other special procedures.
22(i) Reference to outside facts.--Any of the terms of a plan
23of division may be made dependent upon facts ascertainable
24outside of the plan if the manner in which the facts will
25operate upon the terms of the plan is set forth in the plan.
26Such facts may include, without limitation, actions or events
27within the control of or determinations made by the dividing
28corporation or a representative of the dividing corporation.
29§ 1953. Division without shareholder approval.
30(a) General rule.--Unless otherwise restricted by its bylaws
1or required by section 1952(f) (relating to action by holders of
2preferred or special shares), a plan of division that does not
3alter the state of incorporation of a business corporation,
4provide for special treatment nor amend in any respect the
5provisions of its articles (except amendments which under
6section 1914(c) (relating to adoption by board of directors) may
7be made without shareholder action) shall not require the
8approval of the shareholders of the corporation if:
9(1) the dividing corporation has only one class of
10shares outstanding and the shares and other securities, if
11any, of each corporation resulting from the plan are
12distributed pro rata to the shareholders of the dividing
13corporation;
14(2) the dividing corporation survives the division and
15all the shares and other securities and obligations, if any,
16of all new corporations resulting from the plan are owned
17solely by the surviving corporation; or
18(3) the allocation of assets among the resulting
19corporations effected by the division, if effected by means
20of a sale, lease, exchange or other disposition, would not
21require the approval of shareholders under section 1932(b)
22(relating to shareholder approval required).
23(b) Limitation.--A plan of division adopted by the board of
24directors under this section without the approval of the
25shareholders shall not, by itself, create or impair any rights
26or obligations on the part of any person under section 2538
27(relating to approval of transactions with interested
28shareholders) or under Subchapters E (relating to control
29transactions), F (relating to business combinations), G
30(relating to control-share acquisitions), H (relating to
1disgorgement by certain controlling shareholders following
2attempts to acquire control), I (relating to severance
3compensation for employees terminated following certain control-
4share acquisitions) and J (relating to business combination
5transactions - labor contracts) of Chapter 25, nor shall it
6change the standard of care applicable to the directors under
7Subchapter B of Chapter 17 (relating to fiduciary duty).
8§ 1954. Articles of division.
9Upon the adoption of a plan of division by the corporation
10desiring to divide, as provided in this subchapter, articles of
11division shall be executed by the corporation and shall, subject
12to section 109 (relating to name of commercial registered office
13provider in lieu of registered address), set forth:
14(1) The name and the location of the registered office,
15including street and number, if any, of the dividing domestic
16business corporation or, in the case of a dividing foreign
17business corporation, the name of the corporation and the
18jurisdiction in which it is incorporated, together with
19either:
20(i) If a qualified foreign business corporation, the
21address, including street and number, if any, of its
22registered office in this Commonwealth.
23(ii) If a nonqualified foreign business corporation,
24the address, including street and number, if any, of its
25principal office under the laws of that jurisdiction.
26(2) The statute under which the dividing corporation was
27incorporated and the date of incorporation.
28(3) A statement that the dividing corporation will, or
29will not, survive the division.
30(4) The name and the address, including street and
1number, if any, of the registered office of each new domestic
2business corporation or qualified foreign business
3corporation resulting from the division.
4(5) If the plan is to be effective on a specific date,
5the hour, if any, and the month, day and year of the
6effective date.
7(6) The manner in which the plan was adopted by the
8corporation.
9(7) Except as provided in section 1901 (relating to
10omission of certain provisions from filed plans), the plan of
11division.
12§ 1955. Filing of articles of division.
13(a) General rule.--The articles of division, and the
14certificates or statement, if any, required by section 139
15(relating to tax clearance of certain fundamental transactions)
16shall be filed in the Department of State.
17(b) Cross references.--See sections 134 (relating to
18docketing statement) and 135 (relating to requirements to be met
19by filed documents).
20§ 1956. Effective date of division.
21Upon the filing of articles of division in the Department of
22State or upon the effective date specified in the plan of
23division, whichever is later, the division shall become
24effective. The division of a domestic business corporation into
25one or more foreign business corporations or the division of a
26foreign business corporation shall be effective according to the
27laws of the jurisdictions where the foreign corporations are or
28are to be incorporated, but not until articles of division have
29been adopted and filed as provided in this subchapter.
30§ 1957. Effect of division.
1(a) Multiple resulting corporations.--Upon the division
2becoming effective, the dividing corporation shall be subdivided
3into the distinct and independent resulting corporations named
4in the plan of division and, if the dividing corporation is not
5to survive the division, the existence of the dividing
6corporation shall cease. The resulting corporations, if they are
7domestic business corporations, shall not thereby acquire
8authority to engage in any business or exercise any right that a
9corporation may not be incorporated under this subpart to engage
10in or exercise. Any resulting foreign business corporation that
11is stated in the articles of division to be a qualified foreign
12business corporation shall be a qualified foreign business
13corporation under Article D (relating to foreign business
14corporations), and the articles of division shall be deemed to
15be the application for a certificate of authority and the
16certificate of authority issued thereon of the corporation.
17(b) Property rights; allocations of assets and
18liabilities.--
19(1) (i) All the property, real, personal and mixed, and
20franchises of the dividing corporation, and all debts due
21on whatever account to it, including subscriptions for
22shares and other choses in action belonging to it, shall
23(except as otherwise provided in paragraph (2)), to the
24extent allocations of assets are contemplated by the plan
25of division, be deemed without further action to be
26allocated to and vested in the resulting corporations on
27such a manner and basis and with such effect as is
28specified in the plan, or per capita among the resulting
29corporations, as tenants in common, if no specification
30is made in the plan, and the title to any real estate, or
1interest therein, vested in any of the corporations shall
2not revert or be in any way impaired by reason of the
3division.
4(ii) Upon the division becoming effective, the
5resulting corporations shall each thenceforth be
6responsible as separate and distinct corporations only
7for such liabilities as each corporation may undertake or
8incur in its own name but shall be liable for the
9liabilities of the dividing corporation in the manner and
10on the basis provided in subparagraphs (iv) and (v).
11(iii) Liens upon the property of the dividing
12corporation shall not be impaired by the division.
13(iv) Except as provided in section 1952(g) (relating
14to proposal and adoption of plan of division), to the
15extent allocations of liabilities are contemplated by the
16plan of division, the liabilities of the dividing
17corporation shall be deemed without further action to be
18allocated to and become the liabilities of the resulting
19corporations on such a manner and basis and with such
20effect as is specified in the plan; and one or more, but
21less than all, of the resulting corporations shall be
22free of the liabilities of the dividing corporation to
23the extent, if any, specified in the plan, if in either
24case:
25(A) no fraud on minority shareholders or
26shareholders without voting rights or violation of
27law shall be effected thereby; and
28(B) the plan does not constitute a fraudulent
29transfer under 12 Pa.C.S. Ch. 51 (relating to
30fraudulent transfers).
1(v) If the conditions in subparagraph (iv) for
2freeing one or more of the resulting corporations from
3the liabilities of the dividing corporation or for
4allocating some or all of the liabilities of the dividing
5corporation are not satisfied, the liabilities of the
6dividing corporation as to which those conditions are not
7satisfied shall not be affected by the division nor shall
8the rights of creditors thereunder be impaired by the
9division and any claim existing or action or proceeding
10pending by or against the corporation with respect to
11those liabilities may be prosecuted to judgment as if the
12division had not taken place, or the resulting
13corporations may be proceeded against or substituted in
14place of the dividing corporation as joint and several
15obligors on those liabilities, regardless of any
16provision of the plan of division apportioning the
17liabilities of the dividing corporation.
18(vi) The conditions in subparagraph (iv) for freeing
19one or more of the resulting corporations from the
20liabilities of the dividing corporation and for
21allocating some or all of the liabilities of the dividing
22corporation shall be conclusively deemed to have been
23satisfied if the plan of division has been approved by
24the Department of Banking, the Insurance Department or
25the Pennsylvania Public Utility Commission in a final
26order issued after August 21, 2001, that has become not
27subject to further appeal.
28(2) (i) The allocation of any fee or freehold interest
29or leasehold having a remaining term of 30 years or more
30in any tract or parcel of real property situate in this
1Commonwealth owned by a dividing corporation (including
2property owned by a foreign business corporation dividing
3solely under the law of another jurisdiction) to a new
4corporation resulting from the division shall not be
5effective until one of the following documents is filed
6in the office for the recording of deeds of the county,
7or each of them, in which the tract or parcel is
8situated:
9(A) A deed, lease or other instrument of
10confirmation describing the tract or parcel.
11(B) A duly executed duplicate original copy of
12the articles of division.
13(C) A copy of the articles of division certified
14by the Department of State.
15(D) A declaration of acquisition setting forth
16the value of real estate holdings in such county of
17the corporation as an acquired company.
18(ii) The provisions of 75 Pa.C.S. § 1114 (relating
19to transfer of vehicle by operation of law) shall not be
20applicable to an allocation of ownership of any motor
21vehicle, trailer or semitrailer to a new corporation
22under this section or under a similar law of any other
23jurisdiction but any such allocation shall be effective
24only upon compliance with the requirements of 75 Pa.C.S.
25§ 1116 (relating to issuance of new certificate following
26transfer).
27(3) It shall not be necessary for a plan of division to
28list each individual asset or liability of the dividing
29corporation to be allocated to a new corporation so long as
30those assets and liabilities are described in a reasonable
1manner.
2(4) Each new corporation shall hold any assets and
3liabilities allocated to it as the successor to the dividing
4corporation, and those assets and liabilities shall not be
5deemed to have been assigned to the new corporation in any
6manner, whether directly or indirectly or by operation of
7law.
8(c) Taxes.--Any taxes, interest, penalties and public
9accounts of the Commonwealth claimed against the dividing
10corporation that are settled, assessed or determined prior to or
11after the division shall be the liability of any of the
12resulting corporations and, together with interest thereon,
13shall be a lien against the franchises and property, both real
14and personal, of all the corporations. Upon the application of
15the dividing corporation, the Department of Revenue, with the
16concurrence of the Office of Employment Security of the
17Department of Labor and Industry, shall release one or more, but
18less than all, of the resulting corporations from liability and
19liens for all taxes, interest, penalties and public accounts of
20the dividing corporation due the Commonwealth for periods prior
21to the effective date of the division if those departments are
22satisfied that the public revenues will be adequately secured.
23(d) Articles of surviving corporation.--The articles of
24incorporation of the surviving corporation, if there be one,
25shall be deemed to be amended to the extent, if any, that
26changes in its articles are stated in the plan of division.
27(e) Articles of new corporations.--The statements that are
28set forth in the plan of division with respect to each new
29domestic business corporation and that are required or permitted
30to be set forth in restated articles of incorporation of
1corporations incorporated under this subpart, or the articles of
2incorporation of each new corporation set forth therein, shall
3be deemed to be the articles of incorporation of each new
4corporation.
5(f) Directors and officers.--Unless otherwise provided in
6the plan, the directors and officers of the dividing corporation
7shall be the initial directors and officers of each of the
8resulting corporations.
9(g) Disposition of shares.--Unless otherwise provided in the
10plan, the shares and other securities or obligations, if any, of
11each new corporation resulting from the division shall be
12distributable to:
13(1) the surviving corporation, if the dividing
14corporation survives the division; or
15(2) the holders of the common or other residuary shares
16of the dividing corporation pro rata, in any other case.
17(h) Conflict of laws.--It is the intent of the General
18Assembly that:
19(1) The effect of a division of a domestic business
20corporation shall be governed solely by the laws of this
21Commonwealth and any other jurisdiction under the laws of
22which any of the resulting corporations is incorporated.
23(2) The effect of a division on the assets and
24liabilities of the dividing corporation shall be governed
25solely by the laws of this Commonwealth and any other
26jurisdiction under the laws of which any of the resulting
27corporations is incorporated.
28(3) The validity of any allocations of assets or
29liabilities by a plan of division of a domestic business
30corporation, regardless of whether or not any of the new
1corporations is a foreign business corporation, shall be
2governed solely by the laws of this Commonwealth.
3(4) In addition to the express provisions of this
4subsection, this subchapter shall otherwise generally be
5granted the protection of full faith and credit under the
6Constitution of the United States.
7SUBCHAPTER E
8CONVERSION
9§ 1961. Conversion authorized.
10(a) General rule.--Any business corporation may, in the
11manner provided in this subchapter, be converted into a
12nonprofit corporation, designated in this subchapter as the
13resulting corporation.
14(b) Exceptions.--This subchapter shall not authorize any
15conversion involving:
16(1) Beneficial, benevolent, fraternal or fraternal
17benefit societies having a lodge system and a representative
18form of government, or transacting any type of insurance
19whatsoever.
20(2) Any corporation that by the laws of this
21Commonwealth is subject to the supervision of the Department
22of Banking, the Insurance Department or the Pennsylvania
23Public Utility Commission, unless the agency expressly
24approves the transaction in writing.
25§ 1962. Proposal and adoption of plan of conversion.
26(a) Preparation of plan.--A plan of conversion shall be
27prepared, setting forth:
28(1) The terms and conditions of the conversion.
29(2) A restatement of the articles of the resulting
30corporation, which articles shall comply with the
1requirements of this part relating to nonprofit corporations.
2(3) Any provisions desired providing special treatment
3of shares held by any shareholder or group of shareholders as
4authorized by, and subject to the provisions of, section 1906
5(relating to special treatment of holders of shares of same
6class or series).
7(4) Such other provisions as are deemed desirable.
8(b) Proposal and adoption.--The plan of conversion shall be
9proposed and adopted, and may be amended after its adoption and
10terminated, by the business corporation in the manner provided
11for the proposal, adoption, amendment and termination of a plan
12of merger in Subchapter C (relating to merger, consolidation,
13share exchanges and sale of assets), except section 1924(b)
14(relating to adoption by board of directors). There shall be
15included in, or enclosed with, the notice of meeting of
16shareholders of the business corporation that will act upon the
17plan a copy or a summary of the plan and of Subchapter D of
18Chapter 15 (relating to dissenters rights) and of subsection
19(c).
20(c) Dissenters rights in conversion.--Any shareholder of a
21business corporation that adopts a plan of conversion into a
22nonprofit corporation who objects to the plan of conversion and
23complies with the provisions of Subchapter D of Chapter 15 shall
24be entitled to the rights and remedies of dissenting
25shareholders therein provided.
26(d) Reference to outside facts.--Any of the terms of a plan
27of conversion may be made dependent upon facts ascertainable
28outside of the plan if the manner in which the facts will
29operate upon the terms of the plan is set forth in the plan.
30Such facts may include, without limitation, actions or events
1within the control of or determinations made by the corporation
2or a representative of the corporation.
3§ 1963. Articles of conversion.
4Upon the adoption of a plan of conversion by the business
5corporation desiring to convert, as provided in this subchapter,
6articles of conversion shall be executed by the corporation and
7shall set forth:
8(1) The name of the corporation and, subject to section
9109 (relating to name of commercial registered office
10provider in lieu of registered address), the address,
11including street and number, if any, of its registered
12office.
13(2) The statute under which the corporation was
14incorporated and the date of incorporation.
15(3) If the plan is to be effective on a specified date,
16the hour, if any, and the month, day and year of the
17effective date.
18(4) The manner in which the plan was adopted by the
19corporation.
20(5) Except as provided in section 1901 (relating to
21omission of certain provisions from filed plans), the plan of
22conversion.
23§ 1964. Filing of articles of conversion.
24(a) General rule.--The articles of conversion shall be filed
25in the Department of State.
26(b) Cross reference.--See section 134 (relating to docketing
27statement).
28§ 1965. Effective date of conversion.
29Upon the filing of articles of conversion in the Department
30of State or upon the effective date specified in the plan of
1conversion, whichever is later, the conversion shall become
2effective.
3§ 1966. Effect of conversion.
4Upon the conversion becoming effective, the converting
5business corporation shall be deemed to be a nonprofit
6corporation subject to the provisions of this part relating to
7nonprofit corporations for all purposes, shall cease to be a
8business corporation and shall not thereafter operate in any
9manner resulting in pecuniary profit, incidental or otherwise,
10to its members or shareholders. The corporation shall remain
11liable for all existing obligations, public or private, and
12taxes due the Commonwealth or any other taxing authority for
13periods prior to the effective date of the conversion and, as a
14nonprofit corporation, it shall continue to be entitled to all
15assets theretofore pertaining to it as a business corporation.
16§ 1980. Dissolution by domestication.
17Whenever a domestic business corporation has domesticated
18itself under the laws of another jurisdiction by action similar
19to that provided by section 4161 (relating to domestication) and
20has authorized that action by the vote required by this
21subchapter for the approval of a proposal that the corporation
22dissolve voluntarily, the corporation may surrender its charter
23under the laws of this Commonwealth by filing in the Department
24of State articles of dissolution under this subchapter
25containing the statement specified by section 1977(b)(1) through
26(4) (relating to articles of dissolution). If the corporation as
27domesticated in the other jurisdiction qualifies to do business
28in this Commonwealth either prior to or simultaneously with the
29filing of the articles of dissolution under this section, the
30corporation shall not be required to file with the articles of
1dissolution the tax clearance certificates that would otherwise
2be required by section 139 (relating to tax clearance of certain
3fundamental transactions).]
<-4Section 24. Sections 2121, 2501(c), 2521, 2538(a)(1) and (2)
5and (b), 2539, 2721, 2921(b), 3301(c) and 3304(b) of Title 15
6are amended to read:
<-7Section 24. Sections 2101(c), 2121, 2301(c), 2501(b) and
8(c), 2521, 2538(a)(1) and (2) and (b), 2539, 2701(b), 2721,
92901(c), 2921(b), 3101(c), 3301(c) and 3304(b) of Title 15 are
10amended to read:
11§ 2101. Application and effect of chapter.
12* * *
13(c) Laws applicable to nonstock corporations.--Except as
14otherwise provided in this chapter, Part I (relating to
15preliminary provision) and this subpart shall be generally
16applicable to all nonstock corporations. The specific provisions
17of this chapter shall control over the general provisions of
18Part I and this subpart. In the case of a nonstock corporation,
19references in this part to "shares," "shareholder," "share
20register," "share ledger," "transfer book for shares," "number
21of shares entitled to vote" or "class of shares" shall mean
22memberships, member, membership register, membership ledger,
23membership transfer book, number of votes entitled to be cast or
24class of members, respectively. Except as otherwise provided in
25this article, a nonstock corporation may be simultaneously
26subject to this chapter and one or more other chapters of this
27article.
28§ 2121. Corporate name of nonstock corporations.
29(a) General rule.--The corporate name of a nonstock
30corporation may contain the word "mutual."
1(b) Insurance names.--See section [1303(c)(1)(iii) (relating
2to corporate name)] 202(c)(1)(iii) (relating to requirements for
3names generally).
<-4§ 2301. Application and effect of chapter.
5* * *
6(c) Laws applicable to statutory close corporations.--Except
7as otherwise provided in this chapter, Part I (relating to
8preliminary provisions) and this subpart shall be generally
9applicable to all statutory close corporations. The specific
10provisions of this chapter shall control over the general
11provisions of Part I and this subpart. Except as otherwise
12provided in this article, a statutory close corporation may be
13simultaneously subject to this chapter and one or more other
14chapters of this article.
15* * *
16§ 2501. Application and effect of chapter.
17* * *
<-18(b) Laws applicable to registered corporations.--Except as
19otherwise provided in this chapter, Part I (relating to
20preliminary provisions) and this subpart shall be generally
21applicable to all registered corporations. The specific
22provisions of this chapter shall control over the general
23provisions of Part I and this subpart. Except as otherwise
24provided in this article, a registered corporation may be
25simultaneously subject to this chapter and one or more other
26chapters of this article.
27(c) Effect of a contrary provision of the articles.--
28(1) [The] Except as provided in section 2521 (relating
29to call of special meetings of shareholders), the articles of
30a registered corporation may provide either expressly or by
1necessary implication that any one or more of the provisions
2of Subchapters B (relating to powers, duties and safeguards),
3C (relating to directors and shareholders) and D (relating to
4fundamental changes generally) shall not be applicable in
5whole or in part to the corporation.
6(2) The articles of a registered corporation may provide
7that any one or more of the provisions of Subchapter E
8(relating to control transactions) and following of this
9chapter shall not be applicable in whole or in part to the
10corporation only if, to the extent and in the manner,
11expressly permitted by the subchapter the applicability of
12which is so affected. Where any provision of Subchapter E and
13following of this chapter permits the applicability of a
14subchapter to be varied by a provision of the articles, the
15applicability may be varied by an amendment of the articles
16only if, to the extent and in the manner, expressly permitted
17by the subchapter the applicability of which is so affected.
18* * *
19§ 2521. Call of special meetings of shareholders.
20(a) General rule.--The shareholders of a registered
21corporation shall not be entitled by statute to call a special
22meeting of the shareholders.
23(b) Exception.--Subsection (a) shall not apply to the call
24of a special meeting by an interested shareholder (as defined in
25section 2553 (relating to interested shareholder)) for the
26purpose of approving a business combination under section
272555(3) or (4) (relating to requirements relating to certain
28business combinations).
29(c) Contrary articles provision.--A provision of the
30articles of a registered corporation described in section
12502(1) (relating to registered corporation status) adopted
2after <-{the Legislative Reference Bureau shall insert here the
3effective date of this amendment} <-July 1, 2015, may not provide
4that a special meeting may be called by less than 25% of the
5votes that all shareholders would be entitled to cast at the
6meeting.
7§ 2538. Approval of transactions with interested shareholders.
8(a) General rule.--The following transactions shall require
9the affirmative vote of the shareholders entitled to cast at
10least a majority of the votes that all shareholders other than
11the interested shareholder are entitled to cast with respect to
12the transaction, without counting the vote of the interested
13shareholder:
14(1) Any transaction authorized under Subchapter C of
15Chapter 19 (relating to merger[,consolidation, share
16exchanges] liabilities and sale of assets) or Subchapter C
17(relating to merger) or D (relating to interest exchange) of
18Chapter 3 between a registered corporation or subsidiary
19thereof and a shareholder of the registered corporation.
20(2) Any transaction authorized under Subchapter [D] F of
21Chapter [19] 3 (relating to division) in which the interested
22shareholder receives a disproportionate amount of any of the
23shares or other securities of any corporation surviving or
24resulting from the plan of division.
25* * *
26(b) Exceptions.--Subsection (a) shall not apply to a
27transaction:
28(1) that has been approved by a majority vote of the
29board of directors without counting the vote of directors
30who:
1(i) are directors or officers of, or have a material
2equity interest in, the interested shareholder; or
3(ii) were nominated for election as a director by
4the interested shareholder, and first elected as a
5director, within 24 months of the date of the vote on the
6proposed transaction;
7(2) in which the consideration to be received by the
8shareholders for shares of any class of which shares are
9owned by the interested shareholder is not less than the
10highest amount paid by the interested shareholder in
11acquiring shares of the same class; or
12(3) effected pursuant to section [1924(b)(1)(ii)
13(relating to adoption by board of directors)] 321(d)(1)(ii)
14(relating to approval by business corporation).
15* * *
16§ 2539. Adoption of plan of merger by board of directors.
17Section [1924(b)(1)(ii) (relating to adoption by board of
18directors)] 321(d)(1)(ii) (relating to approval by business
19corporation) shall be applicable to a plan relating to a merger
20[or consolidation] to which a registered corporation described
21in section 2502(1)(i) (relating to registered corporation
22status) is a party only if the plan:
23(1) has been approved by the board of directors of the
24registered corporation; and
25(2) is consistent with the requirements, if applicable,
26of Subchapter F (relating to business combinations).
<-27§ 2701. Application and effect of chapter.
28* * *
29(b) Laws applicable to management corporations.--Except as
30otherwise provided in this chapter, Part I (relating to
1preliminary provisions) and this subpart shall be generally
2applicable to all management corporations. The specific
3provisions of this chapter shall control over the general
4provisions of Part I and this subpart. Except as otherwise
5provided in this article, a management corporation may be
6simultaneously subject to this chapter and one or more other
7chapters of this article.
8* * *
9§ 2721. Bylaw and fundamental change procedures.
10So long as a business corporation is a management corporation
11subject to this chapter:
12(1) The board of directors shall have the full authority
13vested by this subpart in the shareholders to amend the
14articles under section 2704(b) (relating to procedure) to
15renew the election of the corporation to be subject to this
16chapter and to adopt or change the bylaws, and a bylaw
17adopted by the board of directors pursuant to this section
18may continue in effect as long as the corporation remains
19subject to this chapter.
20(2) [An amendment or plan shall not be adopted under
21Chapter 19 (relating to fundamental changes), and a bylaw
22shall not be adopted or changed by the shareholders, without
23the approval of the board of directors.] None of the
24following shall be adopted or changed by the shareholders
25without the approval of the board of directors:
26(i) a plan under Chapter 3 (relating to entity
27transactions);
28(ii) an amendment of the articles;
29(iii) an amendment, adoption or repeal of a bylaw;
30(iv) a plan of asset transfer; or
1(v) a resolution recommending dissolution.
2(3) In the case of a corporation that in the ordinary
3course of business redeems all outstanding shares at the
4option of the shareholder at the net asset value or at
5another agreed method or amount of value thereof, [an
6amendment or plan under Chapter 19] a plan under Chapter 3,
7an amendment of the articles or a plan of asset transfer
8under section 1932 (relating to voluntary transfer of
9corporate assets) shall not require the approval of the
10shareholders of the corporation for adoption by the
11corporation.
<-12§ 2901. Application and effect of chapter.
13* * *
14(c) Laws applicable to professional corporations.--Except as
15otherwise provided in this chapter, Part I (relating to
16preliminary provisions) and this subpart shall be generally
17applicable to all professional corporations. The specific
18provisions of this chapter shall control over the general
19provisions of Part I and this subpart. Except as otherwise
20provided in this article, a professional corporation may be
21simultaneously subject to this chapter and one or more other
22chapters of this article.
23§ 2921. Corporate name.
24* * *
25(b) Additional names permitted.--The provisions of section
26[1303(a) (relating to corporate name)] 202 (relating to
27requirements for names generally) shall not prohibit the use of
28a name of a professional corporation if the name contains and is
29restricted to the name or the last name of one or more of the
30present, prospective or former shareholders or of individuals
1who were associated with a predecessor or whose individual name
2or names appeared in the name of the predecessor. The name may
3also contain:
4(1) the word "and" or any symbol or substitute therefor;
5(2) the word "associates";
6(3) the term "P.C."; or
7(4) any or all of the words or terms in paragraphs (1),
8(2) and (3).
<-9§ 3101. Application and effect of chapter.
10* * *
11(c) Laws applicable to insurance corporations.--Except as
12otherwise provided in this chapter, Part I (relating to
13preliminary provisions) and this subpart shall be generally
14applicable to all insurance corporations. The specific
15provisions of this chapter shall control over the general
16provisions of Part I and this subpart. Except as otherwise
17provided in this article, an insurance corporation may be
18simultaneously subject to this chapter and one or more other
19chapters of this article.
20§ 3301. Application and effect of chapter.
21* * *
22(c) Laws applicable to benefit corporations.--Except as
23otherwise provided in this chapter, Part I (relating to
24preliminary provisions) and this subpart shall apply generally
25to benefit corporations. The [specific<-] provisions of this
26chapter shall control over [the general provisions of <-Part I and
27this subpart<-] inconsistent provisions of this title. A benefit
28corporation may be simultaneously subject to this chapter and
29one or more other chapters of this article.
30* * *
1§ 3304. Election of benefit corporation status.
2* * *
3(b) Fundamental transactions.--If an association that is not
4a benefit corporation is a party to a merger[, consolidation] or
5division or is the exchanging association in [a share] an
6interest exchange, and the surviving, new or any resulting
7association in the merger, [consolidation,] division or [share]
8interest exchange is to be a benefit corporation, then the plan
9of merger, [consolidation,] division or [share] interest
10exchange shall not be effective unless it is adopted by the
11[corporation] association by at least the minimum status vote.
12Section 25. Sections 4121, 4122 and 4123 of Title 15 are
13repealed:
14[§ 4121. Admission of foreign corporations.
15(a) General rule.--A foreign business corporation, before
16doing business in this Commonwealth, shall procure a certificate
17of authority to do so from the Department of State, in the
18manner provided in this subchapter. A foreign business
19corporation shall not be denied a certificate of authority by
20reason of the fact that the laws of the jurisdiction governing
21its incorporation and internal affairs differ from the laws of
22this Commonwealth.
23(b) Qualification under former statutes.--If a foreign
24corporation for profit was on March 19, 1966, admitted to do
25business in this Commonwealth by the filing of a power of
26attorney and statement under the act of June 8, 1911 (P.L.710,
27No.283), the power of attorney and statement shall be deemed an
28approved application for a certificate of authority issued under
29this subchapter and the corporation shall be deemed a holder of
30the certificate. The corporation shall include in its initial
1application, if any, for an amended certificate of authority
2under this subchapter the information required by this
3subchapter to be set forth in an application for a certificate
4of authority. A certificate of authority issued under the former
5provisions of the Business Corporation Law of 1933 shall be
6deemed to be issued under this subchapter, and the certificate
7of authority shall be deemed not to contain any reference to the
8kind of business that the corporation proposes to do in this
9Commonwealth.
10(c) Foreign insurance corporations.--A foreign insurance
11corporation shall not be required to procure a certificate of
12authority under this subchapter.
13§ 4122. Excluded activities.
14(a) General rule.--Without excluding other activities that
15may not constitute doing business in this Commonwealth, a
16foreign business corporation shall not be considered to be doing
17business in this Commonwealth for the purposes of this
18subchapter by reason of carrying on in this Commonwealth any one
19or more of the following acts:
20(1) Maintaining or defending any action or
21administrative or arbitration proceeding or effecting the
22settlement thereof or the settlement of claims or disputes.
23(2) Holding meetings of its directors or shareholders or
24carrying on other activities concerning its internal affairs.
25(3) Maintaining bank accounts.
26(4) Maintaining offices or agencies for the transfer,
27exchange and registration of its securities or appointing and
28maintaining trustees or depositaries with relation to its
29securities.
30(5) Effecting sales through independent contractors.
1(6) Soliciting or procuring orders, whether by mail or
2through employees or agents or otherwise, and maintaining
3offices therefor, where the orders require acceptance without
4this Commonwealth before becoming binding contracts.
5(7) Creating as borrower or lender, acquiring or
6incurring, obligations or mortgages or other security
7interests in real or personal property.
8(8) Securing or collecting debts or enforcing any rights
9in property securing them.
10(9) Transacting any business in interstate or foreign
11commerce.
12(10) Conducting an isolated transaction completed within
13a period of 30 days and not in the course of a number of
14repeated transactions of like nature.
15(11) Inspecting, appraising and acquiring real estate
16and mortgages and other liens thereon and personal property
17and security interests therein, and holding, leasing,
18conveying and transferring them, as fiduciary or otherwise.
19(b) Exceptions.--The specification of activities in
20subsection (a) does not establish a standard for activities that
21may subject a foreign business corporation to:
22(1) Service of process under any statute or general
23rule.
24(2) Taxation by the Commonwealth or any political
25subdivision thereof.
26§ 4123. Requirements for foreign corporation names.
27(a) General rule.--The Department of State shall not issue a
28certificate of authority to any foreign business corporation
29that, except as provided in subsection (b), has a name that is
30rendered unavailable for use by a domestic business corporation
1by any provision of section 1303(a), (b) or (c) (relating to
2corporate name), except subsection (c)(1)(ii) thereof (relating
3to banking names).
4(b) Exceptions.--
5(1) The provisions of section 1303(b) (relating to
6duplicate use of names) shall not prevent the issuance of a
7certificate of authority to a foreign business corporation
8setting forth a name that is not distinguishable upon the
9records of the department from the name of any other domestic
10or foreign corporation for profit or corporation not-for-
11profit, or of any corporation or other association then
12registered under 54 Pa.C.S. Ch. 5 (relating to corporate and
13other association names) or to any name reserved or
14registered as provided in this part, if the foreign business
15corporation applying for a certificate of authority files in
16the department a resolution of its board of directors
17adopting a fictitious name for use in transacting business in
18this Commonwealth, which fictitious name is distinguishable
19upon the records of the department from the name of the other
20corporation or other association or from any name reserved or
21registered as provided in this part and that is otherwise
22available for use by a domestic business corporation.
23(2) The provisions of section 1303(c) (relating to
24required approvals or conditions) shall not prevent the
25issuance of a certificate of authority to a foreign business
26corporation setting forth a name that is prohibited by that
27subsection if the foreign business corporation applying for a
28certificate of authority files in the department a resolution
29of its board of directors adopting a fictitious name for use
30in transacting business in this Commonwealth that is
1available for use by a domestic business corporation.]
2Section 26. Section 4124 of Title 15 is amended to read:
3§ 4124. [Application for a certificate of authority.]
4Advertisement of registration to do business.
5[(a) General rule.--An application for a certificate of
6authority shall be executed by the foreign business corporation
7and shall set forth:
8(1) The name of the corporation.
9(2) The name of the jurisdiction under the laws of which
10it is incorporated.
11(3) The address, including street and number, if any, of
12its principal office under the laws of the jurisdiction in
13which it is incorporated.
14(4) Subject to section 109 (relating to name of
15commercial registered office provider in lieu of registered
16address), the address, including street and number, if any,
17of its proposed registered office in this Commonwealth.
18(5) A statement that it is a corporation incorporated
19for a purpose or purposes involving pecuniary profit,
20incidental or otherwise.
21(b) Advertisement.--]A foreign business corporation shall
22officially publish notice of its intention to [apply or its
23application for a certificate of authority] register to do
24business or its registration to do business in this Commonwealth
25under Chapter 4 (relating to foreign associations). The notice
26may appear prior to or after the day on which [application is
27made to the Department of State] a registration statement is
28delivered to the department for filing and shall set forth
29briefly:
30(1) A statement that the corporation will [apply or has
1applied for a certificate of authority under the provisions
2of the Business Corporation Law of 1988] register or has
3registered to do business in this Commonwealth under Chapter
44.
5(2) The name of the corporation and [of the jurisdiction
6under the laws of which it is incorporated] its jurisdiction
7of formation.
8(3) The address, including street and number, if any, of
9its principal office under the laws of [the jurisdiction in
10which it is incorporated] its jurisdiction of formation.
11(4) Subject to section 109, the address, including
12street and number, if any, of its proposed registered office
13in this Commonwealth.
14(c) [Filing.--The application for a certificate of authority
15shall be filed in the Department of State.] (Reserved).
16(d) [Cross reference.--See section 134 (relating to
17docketing statement).] (Reserved).
18Section 27. Sections 4125, 4126, 4127, 4128 of Title 15 are
19repealed:
20[§ 4125. Issuance of certificate of authority.
21Upon the filing of the application for a certificate of
22authority, the foreign business corporation shall be deemed to
23hold a certificate of authority to do business in this
24Commonwealth.
25§ 4126. Amended certificate of authority.
26(a) General rule.--After receiving a certificate of
27authority, a qualified foreign business corporation may, subject
28to the provisions of this subchapter, change or correct any of
29the information set forth in its application for a certificate
30of authority or previous filings under this section by filing in
1the Department of State an application for an amended
2certificate of authority. The application shall be executed by
3the corporation and shall state:
4(1) The name under which the applicant corporation
5currently holds a certificate of authority to do business in
6this Commonwealth.
7(2) Subject to section 109 (relating to name of
8commercial registered office provider in lieu of registered
9address), the address, including street and number, if any,
10of its registered office in this Commonwealth.
11(3) The information to be changed or corrected.
12(4) If the application reflects a change in the name of
13the corporation, the application shall include a statement
14that either:
15(i) the change of name reflects a change effected in
16the jurisdiction of incorporation; or
17(ii) documents complying with section 4123(b)
18(relating to exceptions) accompany the application.
19(b) Issuance of amended certificate of authority.--Upon the
20filing of the application, the applicant corporation shall be
21deemed to hold an amended certificate of authority.
22(c) Cross references.--See sections 134 (relating to
23docketing statement) and 135 (relating to requirements to be met
24by filed documents).
25§ 4127. Merger, consolidation or division of qualified foreign
26corporations.
27(a) General rule.--Whenever a qualified foreign business
28corporation is a nonsurviving party to a statutory merger,
29consolidation or division permitted by the laws of the
30jurisdiction under which it is incorporated, the corporation or
1other association surviving the merger, or the new corporation
2or other association resulting from the consolidation or
3division, as the case may be, shall file in the department a
4statement of merger, consolidation or division, which shall be
5executed by the surviving or new corporation or other
6association and shall set forth:
7(1) The name of each nonsurviving qualified foreign
8business corporation.
9(2) The name of the jurisdictions under the laws of
10which each nonsurviving qualified foreign business
11corporation was incorporated.
12(3) The date on which each nonsurviving qualified
13foreign business corporation received a certificate of
14authority to do business in this Commonwealth.
15(4) A statement that the corporate existence of each
16nonsurviving qualified foreign business corporation has been
17terminated by merger, consolidation or division, as the case
18may be.
19(5) In the case of a merger, consolidation or division
20in which any of the new or resulting associations is a
21corporation, or if the surviving corporation in a merger was
22a nonqualified foreign business corporation prior to the
23merger, the statements on the part of the surviving or each
24new or resulting corporation required by section 4124(a)
25(relating to application for a certificate of authority).
26(b) Effect of filing.--The filing of the statement shall
27operate, as of the effective date of the merger, consolidation
28or division, to cancel the certificate of authority of each
29nonsurviving constituent corporation that was a qualified
30foreign business corporation and to qualify the surviving, new
1or resulting corporations, under this subchapter. If the
2surviving, new or resulting corporations do not desire to
3continue as qualified foreign business corporations, they may
4thereafter withdraw in the manner provided by section 4129
5(relating to application for termination of authority).
6(c) Surviving qualified foreign corporations.--It shall not
7be necessary for a surviving corporation that was a qualified
8foreign business corporation to effect any filing under this
9subchapter with respect to a merger or division or to procure an
10amended certificate of authority to do business in this
11Commonwealth unless the name of the corporation is changed by
12the merger or division.
13(d) Cross references.--See sections 134 (relating to
14docketing statement) and 135 (relating to requirements to be met
15by filed documents).
16§ 4128. Revocation of certificate of authority.
17(a) General rule.--Whenever the Department of State finds
18that a qualified foreign business corporation has failed to
19secure an amended certificate of authority as required by this
20subchapter after changing its name, or has failed or refused to
21appear by its proper representatives, or otherwise to comply
22with any subpoena issued by any court having jurisdiction of the
23subject matter, or to produce books, papers, records or
24documents as required by a subpoena, or is violating any of the
25laws of this Commonwealth, or that its articles have been
26revoked or voided by its jurisdiction of incorporation, the
27department shall give notice and opportunity for hearing by
28registered or certified mail to the corporation that the default
29exists and that its certificate of authority, including any
30amendments thereof, will be revoked unless the default is cured
1within 30 days after the mailing of the notice. If the default
2is not cured within the period of 30 days, the department shall
3revoke the certificate of authority, including any amendments
4thereof, of the foreign business corporation. Upon revoking the
5certificate of authority, the department shall mail to the
6corporation, at its registered office in this Commonwealth, a
7certificate of revocation.
8(b) Effect of revocation.--Upon the issuance of the
9certificate of revocation, the authority of the corporation to
10do business in this Commonwealth shall cease, and the
11corporation shall not thereafter do any business in this
12Commonwealth unless it applies for and receives a new
13certificate of authority.
14(c) Exception.--Subsections (a) and (b) shall not apply to a
15foreign insurance corporation.]
16Section 28. Section 4129 of Title 15 is amended to read:
17§ 4129. [Application for] Advertisement of termination of
18[authority] registration to do business.
19[(a) General rule.--Any qualified foreign business
20corporation may withdraw from doing business in this
21Commonwealth and surrender its certificate of authority by
22filing in the Department of State an application for termination
23of authority, executed by the corporation, which shall set
24forth:
25(1) The name of the corporation and, subject to section
26109 (relating to name of commercial registered office
27provider in lieu of registered address), the address,
28including street and number, if any, of its last registered
29office in this Commonwealth.
30(2) The name of the jurisdiction under the laws of which
1it is incorporated.
2(3) The date on which it received a certificate of
3authority to do business in this Commonwealth.
4(4) A statement that it surrenders its certificate of
5authority to do business in this Commonwealth.
6(5) A statement that notice of its intention to withdraw
7from doing business in this Commonwealth was mailed by
8certified or registered mail to each municipal corporation in
9which the registered office or principal place of business of
10the corporation in this Commonwealth is located, and that the
11official publication required by subsection (b) has been
12effected.
13(6) The post office address, including street and
14number, if any, to which process may be sent in an action or
15proceeding upon any liability incurred before the filing of
16the application for termination of authority.]
17(b) Advertisement.--A [qualified] registered foreign
18business corporation shall, before filing [an application for
19termination of authority] a statement under section 415
20(relating to voluntary withdrawal of registration), officially
21publish and mail a notice of its intention to withdraw from
22doing business in this Commonwealth in a manner similar to that
23required by section 1975(b) (relating to notice to creditors and
24taxing authorities). The notice shall set forth [briefly]:
25(1) The name of the corporation and [the jurisdiction
26under the laws of which it is incorporated] its jurisdiction
27of formation.
28(2) The address, including street and number, if any, of
29its principal office under the laws of its jurisdiction of
30[incorporation] formation.
1(3) Subject to section 109, the address, including
2street and number, if any, of its last registered office in
3this Commonwealth.
4(c) [Filing.--The application for termination of authority
5and the certificates or statement required by section 139
6(relating to tax clearance of certain fundamental transactions)
7shall be filed in the department. See section 134 (relating to
8docketing statement).] (Reserved).
9(d) [Effect of filing.--Upon the filing of the application
10for termination of authority, the authority of the corporation
11to do business in this Commonwealth shall cease. The termination
12of authority shall not affect any action or proceeding pending
13at the time thereof or affect any right of action arising with
14respect to the corporation before the filing of the application
15for termination of authority. Process against the corporation in
16an action upon any liability incurred before the filing of the
17application for termination of authority may be served as
18provided in 42 Pa.C.S. Ch. 53 (relating to bases of jurisdiction
19and interstate and international procedure) or as otherwise
20provided or prescribed by law.] (Reserved).
21Section 29. Sections 4130, 4131, 4141, 4142, 4143,4144 and
22Subchapter D of Chapter 41 of Title 15 are repealed:
23[§ 4130. Change of address after withdrawal.
24(a) General rule.--Any foreign business corporation that has
25withdrawn from doing business in this Commonwealth, or its
26successor in interest, may, from time to time, change the
27address to which process may be sent in an action upon any
28liability incurred before the filing of an application for
29termination of authority by filing in the Department of State of
30a statement of change of address by withdrawn corporation
1executed by the corporation, setting forth:
2(1) The name of the withdrawn corporation and, if the
3statement is filed by a successor in interest, the name and
4capacity of the successor.
5(2) The name of the jurisdiction under the laws of which
6the corporation filing the statement is incorporated.
7(3) The former post office address, including street and
8number, if any, of the withdrawn corporation as of record in
9the department.
10(4) The new post office address, including street and
11number, if any, of the withdrawn corporation or its
12successor.
13(b) Cross reference.--See section 134 (relating to docketing
14statement).
15§ 4131. Registration of name.
16(a) General rule.--A nonqualified foreign business
17corporation may register its name under 54 Pa.C.S. Ch. 5
18(relating to corporate and other association names) if the name
19is available for use by a qualified foreign business corporation
20under section 4123 (relating to requirements for foreign
21corporation names), by filing in the Department of State an
22application for registration of name, executed by the
23corporation, which shall set forth:
24(1) The name of the corporation.
25(2) The address, including street and number, if any, of
26the corporation.
27(b) Annual renewal.--A corporation that has in effect a
28registration of its corporate name may renew the registration
29from year to year by annually filing an application for renewal
30setting forth the facts required to be set forth in an original
1application for registration. A renewal application may be filed
2between October 1 and December 31 in each year and shall extend
3the registration for the following calendar year.
4(c) Cross reference.--See section 134 (relating to docketing
5statement).
6§ 4141. Penalty for doing business without certificate of
7authority.
8(a) Right to bring actions or proceedings suspended.--A
9nonqualified foreign business corporation doing business in this
10Commonwealth within the meaning of Subchapter B (relating to
11qualification) shall not be permitted to maintain any action or
12proceeding in any court of this Commonwealth until the
13corporation has obtained a certificate of authority. Nor, except
14as provided in subsection (b), shall any action or proceeding be
15maintained in any court of this Commonwealth by any successor or
16assignee of the corporation on any right, claim or demand
17arising out of the doing of business by the corporation in this
18Commonwealth until a certificate of authority has been obtained
19by the corporation or by a corporation that has acquired all or
20substantially all of its assets.
21(b) Contracts, property and defense against actions
22unaffected.--The failure of a foreign business corporation to
23obtain a certificate of authority to transact business in this
24Commonwealth shall not impair the validity of any contract or
25act of the corporation, shall not prevent the corporation from
26defending any action in any court of this Commonwealth and shall
27not render escheatable any of its real or personal property.
28§ 4142. General powers and duties of qualified foreign
29corporations.
30(a) General rule.--A qualified foreign business corporation,
1so long as its certificate of authority is not revoked, shall
2enjoy the same rights and privileges as a domestic business
3corporation, but no more, and, except as in this subpart
4otherwise provided, shall be subject to the same liabilities,
5restrictions, duties and penalties now in force or hereafter
6imposed upon domestic business corporations, to the same extent
7as if it had been incorporated under this subpart.
8(b) Agricultural lands.--Interests in agricultural land
9shall be subject to the restrictions of, and escheatable as
10provided by, the act of April 6, 1980 (P.L.102, No.39), referred
11to as the Agricultural Land Acquisition by Aliens Law.
12(c) Foreign insurance corporations.--A foreign insurance
13corporation shall, insofar as it is engaged in the business of
14writing insurance or reinsurance as principal, be subject to the
15laws of this Commonwealth regulating the business of insurance
16in lieu of the provisions of subsection (a).
17§ 4143. General powers and duties of nonqualified foreign
18corporations.
19(a) Acquisition of real and personal property.--Every
20nonqualified foreign business corporation may acquire, hold,
21mortgage, lease and transfer real and personal property in this
22Commonwealth in the same manner and subject to the same
23limitations as a qualified foreign business corporation.
24(b) Duties.--Except as provided in section 4141(a) (relating
25to right to bring actions suspended), a nonqualified foreign
26business corporation doing business in this Commonwealth within
27the meaning of Subchapter B (relating to qualification) shall be
28subject to the same liabilities, restrictions, duties and
29penalties now or hereafter imposed upon a qualified foreign
30business corporation.
1§ 4144. Registered office of qualified foreign corporations.
2(a) General rule.--Subject to the provisions of section
31507(c) (relating to alternative procedure), every qualified
4foreign business corporation shall have, and continuously
5maintain, in this Commonwealth a registered office, which may
6but need not be the same as its place of business in this
7Commonwealth.
8(b) Change.--A qualified foreign business corporation may,
9from time to time, change the address of its registered office
10in the manner provided by section 1507(b) (relating to statement
11of change of registered office).
12SUBCHAPTER D
13DOMESTICATION
14Sec.
154161. Domestication.
164162. Effect of domestication.
17§ 4161. Domestication.
18(a) General rule.--Any qualified foreign business
19corporation may become a domestic business corporation by filing
20in the Department of State articles of domestication. The
21articles of domestication, upon being filed in the department,
22shall constitute the articles of the domesticated foreign
23corporation, and it shall thereafter continue as a corporation
24which shall be a domestic business corporation subject to this
25subpart.
26(b) Articles of domestication.--The articles of
27domestication shall be executed by the corporation and shall set
28forth in the English language:
29(1) The name of the corporation. If the name is in a
30foreign language, it shall be set forth in Roman letters or
1characters or Arabic or Roman numerals. If the name is one
2that is rendered unavailable by any provision of section
31303(b) or (c) (relating to corporate name), the corporation
4shall adopt, in accordance with any procedures for changing
5the name of the corporation that are applicable prior to the
6domestication of the corporation, and shall set forth in the
7articles of domestication an available name.
8(2) Subject to section 109 (relating to name of
9commercial registered office provider in lieu of registered
10address), the address, including street and number, if any,
11of its registered office in this Commonwealth.
12(3) A statement that upon domestication the corporation
13will be subject to the domestic corporation provisions of the
14Business Corporation Law of 1988 and, if desired, a brief
15statement of the purpose or purposes for which it is to be
16domesticated which shall be a purpose or purposes for which a
17domestic business corporation may be incorporated under
18Article B (relating to domestic business corporations
19generally) and which may consist of or include a statement
20that the corporation shall have unlimited power to engage in
21and to do any lawful act concerning any or all lawful
22business for which corporations may be incorporated under the
23Business Corporation Law of 1988.
24(4) The term for which upon domestication it is to
25exist, if not perpetual.
26(5) Any desired provisions relating to the manner and
27basis of reclassifying the shares of the corporation.
28(6) A statement that the filing of articles of
29domestication and, if desired, the renunciation of the
30original charter or articles of the corporation has been
1authorized (unless its charter or other organic documents
2require a greater vote) by a majority of the votes cast by
3all shareholders entitled to vote thereon and, if any class
4of shares is entitled to vote thereon as a class, a majority
5of the votes cast in each class vote.
6(7) Any provisions desired providing special treatment
7of shares held by any shareholder or group of shareholders if
8the laws of the jurisdiction under which the corporation was
9incorporated prior to its domestication permit such special
10treatment.
11(8) Any other provisions authorized by Article B to be
12set forth in the original articles.
13(c) Cross references.--See sections 134 (relating to
14docketing statement) and 135 (relating to requirements to be met
15by filed documents).
16§ 4162. Effect of domestication.
17(a) General rule.--As a domestic business corporation, the
18domesticated corporation shall no longer be a foreign business
19corporation for the purposes of this subpart and shall, instead,
20be a domestic business corporation with all the powers and
21privileges and all the duties and limitations granted and
22imposed upon domestic business corporations. In all other
23respects, the domesticated corporation shall be deemed to be the
24same corporation as it was prior to the domestication without
25any change in or effect on its existence. Without limiting the
26generality of the previous sentence, the domestication shall not
27be deemed to have affected in any way:
28(1) the right and title of the corporation in and to its
29assets, property, franchises, estates and choses in action;
30(2) the liability of the corporation for its debts,
1obligations, penalties and public accounts due the
2Commonwealth;
3(3) any liens or other encumbrances on the property or
4assets of the corporation; or
5(4) any contract, license or other agreement to which
6the corporation is a party or under which it has any rights
7or obligations.
8(b) Reclassification of shares.--The shares of the
9domesticated corporation shall be unaffected by the
10domestication except to the extent, if any, reclassified in the
11articles of domestication.]
12Section 30. Sections 5103(a) introductory paragraph and the
13definitions of "articles," "foreign nonprofit corporation,"
14"nonqualified foreign corporation" and "qualified foreign
15corporation" or "qualified foreign nonprofit corporation" are
16amended to read:
17§ 5103. Definitions.
18(a) General definitions.--Subject to additional definitions
19contained in subsequent provisions of this subpart that are
20applicable to specific provisions of this subpart, the following
21words and phrases when used in Part I (relating to preliminary
22provisions) or in this subpart shall have the meanings given to
23them in this section unless the context clearly indicates
24otherwise:
25* * *
26"Articles." The original articles of incorporation, all
27amendments thereof, and any other articles, statements or
28certificates permitted or required to be filed in the Department
29of State by sections 108 (relating to change in location or
30status of registered office provided by agent) and 138 (relating
1to statement of correction), Chapter 3 (relating to entity
2transactions) or this subpart and including what have heretofore
3been designated by law as certificates of incorporation or
4charters. If an amendment of the articles or [articles of merger
5or division made in the manner permitted by this subpart] a
6statement filed under Chapter 3 restates articles in their
7entirety [or if there are articles of consolidation, conversion
8or domestication], thenceforth the "articles" shall not include
9any prior documents and any certificate issued by the department
10with respect thereto shall so state.
11* * *
12"Foreign nonprofit corporation." A foreign corporation not-
13for-profit or other entity subject to Chapter 61 (relating to
14foreign nonprofit corporations), whether or not required to
15[qualify thereunder] register under Chapter 4 (relating to
16foreign associations).
17* * *
18["Nonqualified foreign corporation" or "nonqualified foreign
19nonprofit corporation." A foreign corporation not-for-profit
20that is not a qualified foreign corporation, as defined in this
21section.]
22* * *
23["Qualified foreign corporation" or "qualified foreign
24nonprofit corporation." A foreign corporation not-for-profit
25authorized under Chapter 61 (relating to foreign nonprofit
26corporations) to do business in this Commonwealth.]
27* * *
28Section 31. Section 5106 of Title 15 is amended to read:
29§ 5106. Uniform application of subpart.
30(a) General rule.--Except as provided in subsection (b),
1this [subpart] title and its amendments are intended to provide
2uniform rules for the governance and regulation of the affairs
3of nonprofit corporations and of their officers, directors and
4members and of members of other bodies, regardless of the date
5or manner of incorporation or qualification, or of the issuance
6of any evidences of membership in or shares of a nonprofit
7corporation.
8(b) Exceptions.--
9(1) Unless expressly provided otherwise in any amendment
10to this [subpart] title, the amendment shall take effect only
11prospectively.
12(2) Any existing corporation lawfully using a name or,
13as a part of its name, a word that could not be used as or
14included in the name of a corporation subsequently
15incorporated or qualified under this [subpart] title may
16continue to use the name or word as part of its name if the
17use or inclusion of the word or name was lawful when first
18adopted by the corporation in this Commonwealth.
19(3) Subsection (a) shall not adversely affect the rights
20specifically provided for or saved in this subpart,
21including, without limiting the generality of the foregoing,
22the provisions of section [5952(d) (relating to proposal and
23adoption of plan of division)] 363 (relating to approval of
24division).
25(4) Nothing in this [subpart] title shall be deemed to
26repeal or supersede any provision in section 7 of the act of
27April 26, 1855 (P.L.328, No.347), entitled "An act relating
28to Corporations and to Estates held for Corporate, Religious
29and Charitable uses."
30Section 32. Sections 5303, 5304 and 5305 of Title 15 are
1repealed:
2[§ 5303. Corporate name.
3(a) General rule.--The corporate name may be in any
4language, but must be expressed in Roman letters or characters
5or Arabic or Roman numerals.
6(b) Duplicate use of names.--The corporate name shall be
7distinguishable upon the records of the Department of State
8from:
9(1) The name of any other domestic corporation for
10profit or not-for-profit which is either in existence or for
11which articles of incorporation have been filed but have not
12yet become effective, or of any foreign corporation for
13profit or not-for-profit which is either authorized to do
14business in this Commonwealth or for which an application for
15a certificate of authority has been filed but which has not
16yet become effective, or the name of any association
17registered at any time under 54 Pa.C.S. Ch. 5 (relating to
18corporate and other association names), unless the other
19association:
20(i) has stated that it is about to change its name,
21or to cease to do business, or is being wound up, or is a
22foreign association about to withdraw from doing business
23in this Commonwealth, and the statement and a written
24consent to the adoption of the name executed by the other
25association is filed in the Department of State;
26(ii) has filed with the Department of Revenue a
27certificate of out of existence, or has failed for a
28period of three successive years to file with the
29Department of Revenue a report or return required by law
30and the fact of such failure has been certified by the
1Department of Revenue to the Department of State;
2(iii) has abandoned its name under the laws of its
3jurisdiction of incorporation, by amendment, merger,
4consolidation, division, expiration, dissolution or
5otherwise, without its name being adopted by a successor
6in a merger, consolidation, division or otherwise, and an
7official record of that fact, certified as provided by 42
8Pa.C.S. § 5328 (relating to proof of official records),
9is presented by any person to the department; or
10(iv) has had the registration of its name under 54
11Pa.C.S. Ch. 5 terminated and, if the termination was
12effected by operation of 54 Pa.C.S. § 504 (relating to
13effect of failure to make filings), the application for
14the use of the name is accompanied by a verified
15statement stating that at least 30 days' written notice
16of intention to appropriate the name was given to the
17delinquent association at its last known place of
18business and that, after diligent search by the affiant,
19the affiant believes the association to be out of
20existence.
21(2) A name the exclusive right to which is at the time
22reserved by any other person whatsoever in the manner
23provided by statute. A name shall be rendered unavailable for
24corporate use by reason of the filing in the Department of
25State of any assumed or fictitious name required by 54
26Pa.C.S. Ch. 3 (relating to fictitious names) to be filed in
27the department only if and to the extent expressly so
28provided in that chapter.
29(c) Required approvals or conditions.--
30(1) The corporate name shall not imply that the
1corporation is:
2(i) A governmental agency of the Commonwealth or of
3the United States.
4(ii) A bank, bank and trust company, savings bank,
5private bank or trust company, as defined in the act of
6November 30, 1965 (P.L.847, No.356), known as the Banking
7Code of 1965.
8(iii) An insurance company.
9(iv) A public utility as defined in 66 Pa.C.S. § 102
10(relating to definitions).
11(v) A credit union. See 17 Pa.C.S. § 104 (relating
12to prohibition on use of words "credit union," etc.).
13(2) The corporate name shall not contain:
14(i) The word "college," "university" or "seminary"
15when used in such a way as to imply that it is an
16educational institution conforming to the standards and
17qualifications prescribed by the State Board of
18Education, unless there is submitted a certificate from
19the Department of Education certifying that the
20corporation or proposed corporation is entitled to use
21that designation.
22(ii) Words that constitute blasphemy, profane
23cursing or swearing or that profane the Lord's name.
24(iii) The words "engineer" or "engineering" or
25"surveyor" or "surveying" or any other word implying that
26any form of the practice of engineering or surveying as
27defined in the act of May 23, 1945 (P.L.913, No.367),
28known as the Professional Engineers Registration Law, is
29provided unless at least one of the incorporators of a
30proposed corporation or the directors of the existing
1corporation has been properly registered with the State
2Registration Board for Professional Engineers in the
3practice of engineering or surveying and there is
4submitted to the department a certificate from the board
5to that effect.
6(iv) The words "Young Men's Christian Association"
7or any other words implying that the corporation is
8affiliated with the State Young Men's Christian
9Association of Pennsylvania unless the corporation is
10incorporated for the purpose of the improvement of the
11spiritual, mental, social and physical condition of young
12people, by the support and maintenance of lecture rooms,
13libraries, reading rooms, religious and social meetings,
14gymnasiums, and such other means and services as may
15conduce to the accomplishment of that object, according
16to the general rules and regulations of such State
17association.
18(v) The words "architect" or "architecture" or any
19other word implying that any form of the practice of
20architecture as defined in the act of December 14, 1982
21(P.L.1227, No.281), known as the Architects Licensure
22Law, is provided unless at least one of the incorporators
23of a proposed corporation or the directors of the
24existing corporation has been properly registered with
25the Architects Licensure Board in the practice of
26architecture and there is submitted to the department a
27certificate from the board to that effect.
28(vi) The word "cooperative" or an abbreviation
29thereof unless the corporation is a cooperative
30corporation.
1(d) Other rights unaffected.--This section shall not
2abrogate or limit the law as to unfair competition or unfair
3practices, nor derogate from the common law, the principles of
4equity or the provisions of Title 54 (relating to names) with
5respect to the right to acquire and protect trade names.
6Subsection (b) shall not apply if the applicant files in the
7department a certified copy of a final order of a court of
8competent jurisdiction establishing the prior right of the
9applicant to the use of a name in this Commonwealth.
10(e) Remedies for violation of section.--The use of a name in
11violation of this section shall not vitiate or otherwise affect
12the corporate existence, but any court having jurisdiction may
13enjoin the corporation from using or continuing to use a name in
14violation of this section upon the application of:
15(1) the Attorney General, acting on his own motion or at
16the instance of any administrative department, board or
17commission of this Commonwealth; or
18(2) any person adversely affected.
19(f) Cross references.--See sections 135(e) (relating to
20distinguishable names) and 5106(b)(2) (relating to limited
21uniform application of subpart).
22§ 5304. Required name changes by senior corporations.
23(a) Adoption of new name upon reactivation.--Where a
24corporate name is made available on the basis that the
25corporation or other association that formerly registered the
26name has failed to file with the Department of Revenue a report
27or a return required by law or where the corporation or other
28association has filed with the Department of Revenue a
29certificate of out of existence, the corporation or other
30association shall cease to have by virtue of its prior
1registration any right to the use of the name. The corporation
2or other association, upon withdrawal of the certificate of out
3of existence or upon the removal of its delinquency in the
4filing of the required reports or returns, shall make inquiry
5with the Department of State with regard to the availability of
6its name and, if the name has been made available to another
7domestic or foreign corporation for profit or not-for-profit or
8other association by virtue of these conditions, shall adopt a
9new name in accordance with law before resuming its activities.
10(b) Enforcement of undertaking to release name.--If a
11corporation has used a name that is not distinguishable upon the
12records of the Department of State from the name of another
13corporation or other association as permitted by section 5303(b)
14(1) (relating to duplicate use of names) and the other
15corporation or other association continues to use its name in
16this Commonwealth and does not change its name, cease to do
17business, be wound up, or withdraw as it proposed to do in its
18consent or change its name as required by subsection (a), any
19court having jurisdiction may enjoin the other corporation or
20other association from continuing to use its name or a name that
21is not distinguishable therefrom, upon the application of:
22(1) the Attorney General, acting on his own motion or at
23the instance of any administrative department, board or
24commission of this Commonwealth; or
25(2) upon the application of any person adversely
26affected.
27§ 5305. Reservation of corporate name.
28(a) General rule.--The exclusive right to the use of a
29corporate name may be reserved by any person. The reservation
30shall be made by delivering to the Department of State an
1application to reserve a specified corporate name, executed by
2the applicant. If the department finds that the name is
3available for corporate use, it shall reserve the name for the
4exclusive use of the applicant for a period of 120 days.
5(b) Transfer of reservation.--The right to exclusive use of
6a specified corporate name reserved under subsection (a) may be
7transferred to any other person by delivering to the department
8a notice of the transfer, executed by the person who reserved
9the name, and specifying the name and address of the transferee.
10(c) Cross references.--See sections 134 (relating to
11docketing statement) and 6131 (relating to registration of
12name).]
13Section 33. Sections 5341, <-5704(b)(1), 5757 and 5766(c) of
14Title 15 are amended to read:
15§ 5341. Statement of revival.
16(a) General rule.--Any nonprofit corporation whose charter
17or articles have been forfeited by proclamation of the Governor
18pursuant to section 1704 of the act of April 9, 1929 (P.L.343,
19No.176), known as The Fiscal Code, or otherwise, or whose
20corporate existence has expired by reason of any limitation
21contained in its charter or articles and the failure to effect a
22timely renewal or extension of its corporate existence, may, at
23any time by [filing] delivering to the department for filing a
24statement of revival, procure a revival of its charter or
25articles, together with all the rights, franchises, privileges
26and immunities and subject to all of its duties, debts and
27liabilities that had been vested in and imposed upon the
28corporation by its charter or articles as last in effect.
29(b) Contents of statement.--The statement of revival shall
30be [executed] signed in the name of the forfeited or expired
1corporation and shall, subject to section 109 (relating to name
2of commercial registered office provider in lieu of registered
3address), set forth:
4(1) The name of the corporation at the time its charter
5or articles were forfeited or expired and the address,
6including street and number, if any, of its last registered
7office.
8(2) The statute by or under which the corporation was
9incorporated and the date of incorporation.
10(3) The name that the corporation adopts as its new name
11if the adoption of a new name is required by section [5304]
12207 (relating to required name changes by senior
13[corporations] associations).
14(4) The address, including street and number, if any, of
15its registered office in this Commonwealth.
16(5) A reference to the proclamation or other action by
17which its charter or articles were forfeited or a reference
18to the limitation contained in its expired charter or
19articles.
20(6) A statement that the corporate existence of the
21corporation shall be revived.
22(7) A statement that the filing of the statement of
23revival has been authorized by the corporation. Every
24forfeited or expired corporation may act by its last
25directors or may elect directors and officers in the manner
26provided by this subpart for the limited purpose of effecting
27a filing under this section.
28(c) Filing and effect.--The statement of revival and, in the
29case of a forfeited corporation, the clearance certificates
30required by section 139 (relating to tax clearance of certain
1fundamental transactions) shall be [filed in the Department of
2State] delivered to the department for filing. Upon the filing
3of the statement of revival, the corporation shall be revived
4with the same effect as if its charter or articles had not been
5forfeited or expired by limitation. The revival shall validate
6all contracts and other transactions made and effected within
7the scope of the articles of the corporation by its
8representatives during the time when its charter or articles
9were forfeited or expired to the same effect as if its charter
10or articles had not been forfeited or expired.
11(d) Cross [reference.--See section] references.--See
12sections 134 (relating to docketing statement) and 135 (relating
13to requirements to be met by filed documents).
<-14§ 5704. Place and notice of meetings of members.
15* * *
16(b) Notice.--Notice in record form of every meeting of the
17members shall be given by, or at the direction of, the secretary
18or other authorized person to each member of record entitled to
19vote at the meeting at least:
20(1) ten days prior to the day named for a meeting that
21will consider a transaction under Chapter 3 (relating to
22entity transactions) or a fundamental change under Chapter 59
23(relating to fundamental changes); or
24* * *
25§ 5757. Action by members.
26(a) General rule.--Except as otherwise provided in this
27[subpart] title or in a bylaw adopted by the members, whenever
28any corporate action is to be taken by vote of the members of a
29nonprofit corporation, it shall be authorized upon receiving the
30affirmative vote of a majority of the votes cast by the members
1entitled to vote thereon and, if any members are entitled to
2vote thereon as a class, upon receiving the affirmative vote of
3a majority of the votes cast by the members entitled to vote as
4a class.
5(b) Changes in required vote.--Whenever a provision of this
6[subpart] title requires a specified number or percentage of
7votes of members or of a class of members for the taking of any
8action, a nonprofit corporation may prescribe in a bylaw adopted
9by the members that a higher number or percentage of votes shall
10be required for the action. The number or percentage of members
11necessary to call a special meeting of members or to petition
12for the proposal of an amendment of articles under this subpart
13may not be increased under this subsection. See sections 5504(d)
14(relating to adoption, amendment and contents of bylaws) and
155914(d) (relating to adoption of amendments).
16(c) Expenses.--Unless otherwise restricted in the articles,
17the corporation shall pay the reasonable expenses of
18solicitation of votes, proxies or consents of members by or on
19behalf of the board of directors or its nominees for election to
20the board, including solicitation by professional proxy
21solicitors and otherwise, and may pay the reasonable expenses of
22a solicitation by or on behalf of other persons.
23(d) Cross reference.--See section 322 (relating to approval
24by nonprofit corporation).
25§ 5766. Consent of members in lieu of meeting.
26* * *
27(c) [Effectiveness] Notice of action by partial consent.--
28[An action taken pursuant to subsection (b) shall not become
29effective until after at least ten days' notice of the action
30has been given to each member entitled to vote thereon who has
1not consented thereto.] Unless the bylaws require notice before
2an action pursuant to subsection (b) takes effect, prompt notice
3that an action has been taken shall be given to each member
4entitled to vote on the action that has not consented.
5Section 34. The heading of Chapter 59 of Title 15 is amended
6to read:
7CHAPTER 59
8[FUNDAMENTAL CHANGES] AMENDMENTS, SALE
9OF ASSETS AND DISSOLUTION
<-10Section 34.1. Sections 5901, 5902(a) and 5905 of Title 15
11are amended to read:
12[§ 5901. Omission of certain provisions from filed plans.
13(a) General rule.--A plan as filed in the Department of
14State under any provision of this chapter may omit all
15provisions of the plan except provisions, if any:
16(1) that are intended to amend or constitute the
17operative provisions of the articles of a corporation as in
18effect subsequent to the effective date of the plan; or
19(2) that allocate or specify the respective assets and
20liabilities of the resulting corporations, in the case of a
21plan of division.
22(b) Availability of full plan.--If any of the provisions of
23a plan are omitted from the plan as filed in the department, the
24articles of amendment, merger, consolidation, division or
25conversion shall state that the full text of the plan is on file
26at the principal place of business of the surviving or new or a
27resulting corporation and shall state the address thereof. A
28corporation that takes advantage of this section shall furnish a
29copy of the full text of the plan, on request and without cost,
30to any member of any corporation that was a party to the plan
1and on request and at cost to any other person.]
2§ 5902. Statement of termination.
3(a) General rule.--If articles of amendment [or articles of
4merger, consolidation, division or conversion of a nonprofit
5corporation or to which it is a party] have been filed in the
6[Department of State] department prior to the termination of the
7amendment [or plan] pursuant to provisions therefor set forth in
8the resolution or petition relating to the amendment [or in the
9plan], the termination shall not be effective unless the
10corporation shall, prior to the time the amendment or plan is to
11become effective, file in the department a statement of
12termination. The statement of termination shall be executed by
13the corporation that filed the amendment [or by each corporation
14that is a party to the plan, unless the plan permits termination
15by less than all of the corporations, in which case the
16statement shall be executed on behalf of the corporation or
17corporations exercising the right to terminate,] and shall set
18forth:
19(1) A copy of the articles of amendment [or articles of
20merger, consolidation, division or conversion relating to the
21amendment or plan that is terminated].
22(2) A statement that the amendment [or plan] has been
23terminated in accordance with the provisions therefor set
24forth therein.
25* * *
26§ 5905. Proposal of fundamental transactions.
27Where any provision of this chapter requires that an
28amendment of the articles[, a plan] or the dissolution of a
29nonprofit corporation be proposed or approved by action of the
30board of directors, that requirement shall be construed to
1authorize and be satisfied by the written agreement or consent
2of all of the members of the corporation entitled to vote
3thereon.
4Section 35. The heading of Subchapter C of Chapter 59 of
5Title 15 is amended to read:
6SUBCHAPTER C
7[MERGER, CONSOLIDATION AND] SALE OF ASSETS
8Section 36. Sections 5921, 5922, 5923, 5924, 5925, 5926,
95927, 5928 and 5929 of Title 15 are repealed:
10[§ 5921. Merger and consolidation authorized.
11(a) Domestic surviving or new corporation.--Any two or more
12domestic nonprofit corporations, or any two or more foreign
13nonprofit corporations, or any one or more domestic nonprofit
14corporations and any one or more foreign nonprofit corporations,
15may, in the manner provided in this subchapter, be merged into
16one of the domestic nonprofit corporations, designated in this
17subchapter as the surviving corporation, or consolidated into a
18new corporation to be formed under this subpart, if the foreign
19corporations are authorized by the laws of the jurisdiction
20under which they are incorporated to effect a merger or
21consolidation with a corporation of another jurisdiction.
22(b) Foreign surviving or new corporation.--Any one or more
23domestic nonprofit corporations, and any one or more foreign
24nonprofit corporations, may, in the manner provided in this
25subchapter, be merged into one of the foreign nonprofit
26corporations, designated in this subchapter as the surviving
27corporation, or consolidated into a new corporation to be
28incorporated under the laws of the jurisdiction under which one
29of the foreign nonprofit corporations is incorporated, if the
30laws of that jurisdiction authorize a merger with or
1consolidation into a corporation of another jurisdiction.
2§ 5922. Plan of merger or consolidation.
3(a) Preparation of plan.--A plan of merger or consolidation,
4as the case may be, shall be prepared, setting forth:
5(1) The terms and conditions of the merger or
6consolidation.
7(2) If the surviving or new corporation is or is to be a
8domestic nonprofit corporation:
9(i) any changes desired to be made in the articles,
10which may include a restatement of the articles in the
11case of a merger; or
12(ii) in the case of a consolidation, all of the
13statements required by this subpart to be set forth in
14restated articles.
15(3) Such other provisions as are deemed desirable.
16(b) Post-adoption amendment.--A plan of merger or
17consolidation may contain a provision that the boards of
18directors or other bodies of the constituent corporations may
19amend the plan at any time prior to its effective date, except
20that an amendment made subsequent to the adoption of the plan by
21the members of any constituent corporation shall not change:
22(1) The term of memberships or the amount or kind of
23securities, obligations, cash, property or rights to be
24received in exchange for or on conversion of all or any of
25the memberships in the constituent corporation.
26(2) Any term of the articles of the surviving or new
27corporation to be effected by the merger or consolidation.
28(3) Any of the terms and conditions of the plan if the
29change would adversely affect the members of the constituent
30corporation.
1(c) Proposal.--Every merger or consolidation shall be
2proposed in the case of each domestic nonprofit corporation:
3(1) by the adoption by the board of directors or other
4body of a resolution approving the plan of merger or
5consolidation;
6(2) unless otherwise provided in the articles, by
7petition of members entitled to cast at least 10% of the
8votes that all members are entitled to cast thereon, setting
9forth the proposed plan of merger or consolidation, which
10petition shall be directed to the board of directors and
11filed with the secretary of the corporation; or
12(3) by such other method as may be provided in the
13bylaws.
14(d) Submission to members.--Except where the corporation has
15no members entitled to vote thereon, the board of directors or
16other body shall direct that the plan be submitted to a vote of
17the members entitled to vote thereon at a regular or special
18meeting of the members.
19(e) Party to plan or transaction.--A corporation,
20partnership, business trust or other association that approves a
21plan in its capacity as a member or creditor of a merging or
22consolidating corporation or that furnishes all or a part of the
23consideration contemplated by a plan does not thereby become a
24party to the plan or the merger or consolidation for the
25purposes of this subchapter.
26(f) Reference to outside facts.--Any of the terms of a plan
27of merger or consolidation may be made dependent upon facts
28ascertainable outside of the plan if the manner in which the
29facts will operate upon the terms of the plan is set forth in
30the plan. Such facts may include, without limitation, actions or
1events within the control of or determinations made by a party
2to the plan or a representative of a party to the plan.
3§ 5923. Notice of meeting of members.
4(a) General rule.--Notice in record form of the meeting of
5members that will act on the proposed plan shall be given to
6each member of record, whether or not entitled to vote thereon,
7of each domestic nonprofit corporation that is a party to the
8merger or consolidation. The notice shall include or be
9accompanied by a copy of the proposed plan or a summary thereof.
10The notice shall provide that a copy of the bylaws of the
11surviving or new corporation will be furnished to any member on
12request and without cost.
13(b) Cross reference.--See Subchapter A of Chapter 57
14(relating to notice and meetings generally).
15§ 5924. Adoption of plan.
16(a) General rule.--The plan of merger or consolidation shall
17be adopted upon receiving the affirmative vote of the members
18present entitled to cast at least a majority of the votes that
19all members present are entitled to cast thereon of each of the
20domestic nonprofit corporations that is a party to the merger or
21consolidation and, if any class of members is entitled to vote
22thereon as a class, the affirmative vote of the members present
23of such class entitled to cast at least a majority of the votes
24that all members present of such class are entitled to cast
25thereon.
26(b) Adoption in absence of voting members.--If a merging or
27consolidating corporation has no members entitled to vote
28thereon, or no members entitled to vote thereon other than
29persons who also constitute the board of directors or other
30body, a plan of merger or consolidation shall be deemed adopted
1by the corporation when it has been adopted by the board of
2directors or other body pursuant to section 5922 (relating to
3plan of merger or consolidation).
4(c) Termination of plan.--Prior to the time when a merger or
5consolidation becomes effective, the merger or consolidation may
6be terminated pursuant to provisions for termination, if any,
7set forth in the plan. If articles of merger or consolidation
8have been filed in the department prior to the termination, a
9statement under section 5902 (relating to statement of
10termination) shall be filed in the department.
11§ 5925. Authorization by foreign corporations.
12The plan of merger or consolidation shall be authorized,
13adopted or approved by each foreign nonprofit corporation that
14desires to merge or consolidate in accordance with the laws of
15the jurisdiction in which it is incorporated and, in the case of
16a foreign domiciliary corporation, in accordance with the
17provisions of this subpart to the extent provided by section
186145 (relating to applicability of certain safeguards to foreign
19domiciliary corporations).
20§ 5926. Articles of merger or consolidation.
21Upon the adoption of the plan of merger or consolidation by
22the corporations desiring to merge or consolidate, as provided
23in this subchapter, articles of merger or articles of
24consolidation, as the case may be, shall be executed by each
25corporation and shall, subject to section 109 (relating to name
26of commercial registered office provider in lieu of registered
27address), set forth:
28(1) The name and the location of the registered office,
29including street and number, if any, of the domestic
30surviving or new corporation or, in the case of a foreign
1surviving or new corporation, the name of the corporation and
2its jurisdiction of incorporation, together with either:
3(i) if a qualified foreign nonprofit corporation,
4the address, including street and number, if any, of its
5registered office in this Commonwealth; or
6(ii) if a nonqualified foreign nonprofit
7corporation, the address, including street and number, if
8any, of its principal office under the laws of the
9jurisdiction in which it is incorporated.
10(2) The name and address, including street and number,
11if any, of the registered office of each other domestic
12nonprofit corporation and qualified foreign nonprofit
13corporation that is a party to the merger or consolidation.
14(3) If the plan is to be effective on a specified date,
15the hour, if any, and the month, day and year of the
16effective date.
17(4) The manner in which the plan was adopted by each
18domestic corporation and, if one or more foreign corporations
19are parties to the merger or consolidation, the fact that the
20plan was authorized, adopted or approved, as the case may be,
21by each of the foreign corporations in accordance with the
22laws of the jurisdiction in which it is incorporated.
23(5) Except as provided in section 5901 (relating to
24omission of certain provisions from filed plans), the plan of
25merger or consolidation.
26§ 5927. Filing of articles of merger or consolidation.
27(a) General rule.--The articles of merger or articles of
28consolidation, as the case may be, and the certificates or
29statement, if any, required by section 139 (relating to tax
30clearance of certain fundamental transactions) shall be filed in
1the Department of State.
2(b) Cross reference.--See section 134 (relating to docketing
3statement).
4§ 5928. Effective date of merger or consolidation.
5Upon the filing of the articles of merger or the articles of
6consolidation in the department or upon the effective date
7specified in the plan of merger or consolidation, whichever is
8later, the merger or consolidation shall be effective. The
9merger or consolidation of one or more domestic nonprofit
10corporations into a foreign nonprofit corporation shall be
11effective according to the provisions of law of the jurisdiction
12in which the foreign corporation is incorporated, but not until
13articles of merger or articles of consolidation have been
14adopted and filed, as provided in this subchapter.
15§ 5929. Effect of merger or consolidation.
16(a) Single surviving or new corporation.--Upon the merger or
17consolidation becoming effective, the several corporations
18parties to the merger or consolidation shall be a single
19corporation which, in the case of a merger, shall be the
20corporation designated in the plan of merger as the surviving
21corporation and, in the case of a consolidation, shall be the
22new corporation provided for in the plan of consolidation. The
23separate existence of all corporations parties to the merger or
24consolidation shall cease, except that of the surviving
25corporation, in the case of a merger. The surviving or new
26corporation, as the case may be, if it is a domestic nonprofit
27corporation, shall not thereby acquire authority to engage in
28any business or exercise any right that a corporation may not be
29incorporated under this subpart to engage in or exercise.
30(b) Property rights.--Except as otherwise provided by order,
1if any, obtained pursuant to section 5547(b) (relating to
2nondiversion of certain property), all the property, real,
3personal and mixed, and franchises of each of the corporations
4parties to the merger or consolidation, and all debts due on
5whatever account to any of them, including subscriptions for
6membership and other choses in action belonging to any of them,
7shall be deemed to be vested in and shall belong to the
8surviving or new corporation, as the case may be, without
9further action, and the title to any real estate, or any
10interest therein, vested in any of the corporations shall not
11revert or be in any way impaired by reason of the merger or
12consolidation. The surviving or new corporation shall
13thenceforth be responsible for all the liabilities of each of
14the corporations so merged or consolidated. Liens upon the
15property of the merging or consolidating corporations shall not
16be impaired by the merger or consolidation, and any claim
17existing or action or proceeding pending by or against any of
18the corporations may be prosecuted to judgment as if the merger
19or consolidation had not taken place, or the surviving or new
20corporation may be proceeded against or substituted in its
21place. Any devise, gift or grant contained in any will or other
22instrument, in trust or otherwise, made before or after such
23merger or consolidation, to or for any of the constituent
24corporations, shall inure to the surviving or new corporation,
25as the case may be, subject to compliance with the requirements
26of section 5550 (relating to devises, bequests and gifts after
27certain fundamental changes).
28(c) Taxes.--Any taxes, interest, penalties and public
29accounts of the Commonwealth claimed against any of the merging
30or consolidating corporations that are settled, assessed or
1determined prior to or after the merger or consolidation shall
2be the liability of the surviving or new corporation and,
3together with interest thereon, shall be a lien against the
4franchises and property, both real and personal, of the
5surviving or new corporation.
6(d) Articles of incorporation.--In the case of a merger, the
7articles of incorporation of the surviving domestic nonprofit
8corporation, if any, shall be deemed to be amended to the
9extent, if any, that changes in its articles are stated in the
10plan of merger. In the case of a consolidation into a domestic
11nonprofit corporation, the statements that are set forth in the
12plan of consolidation, or articles of incorporation set forth
13therein, shall be deemed to be the articles of incorporation of
14the new corporation.]
15Section 37. Section 5930(a) of Title 15 is amended to read:
16§ 5930. Voluntary transfer of corporate assets.
17(a) General rule.--A sale, lease, exchange or other
18disposition of all, or substantially all, of the property and
19assets, with or without goodwill, of a nonprofit corporation, if
20not made pursuant to Subchapter [D] F of Chapter [19] 3
21(relating to division), may be made only pursuant to a plan of
22asset transfer. The property or assets of a direct or indirect
23subsidiary corporation that is controlled by a parent
24corporation shall also be deemed the property or assets of the
25parent corporation for purposes of this subsection. The plan of
26asset transfer shall set forth the terms and consideration of
27the sale, lease, exchange or other disposition or may authorize
28the board of directors or other body to fix any or all of the
29terms and conditions, including the consideration to be received
30by the corporation. Any of the terms of the plan may be made
1dependent upon facts ascertainable outside of the plan if the
2manner in which the facts will operate upon the terms of the
3plan is set forth in the plan. The plan of asset transfer shall
4be proposed and adopted, and may be amended after its adoption
5and terminated, by a nonprofit corporation in the manner
6provided in this subchapter for the proposal, adoption,
7amendment and termination of a plan of merger. A copy or summary
8of the plan shall be included in, or enclosed with, the notice
9of the meeting at which members will act on the plan. In order
10to make effective any plan so adopted, it shall not be necessary
11to file any articles or other document in the department, but
12the corporation shall comply with the requirements of section
135547(b) (relating to nondiversion of certain property).
14* * *
15Section 38. The heading of Subchapter D of Chapter 59 of
16Title 15 is amended to read:
17SUBCHAPTER D
18[DIVISION] (RESERVED)
19Section 39. Sections 5951, 5952, 5953, 5954, 5955, 5956,
205957 and Subchapter E of Chapter 59 and sections 6121, 6122 and
216123 of Title 15 are repealed:
22[§ 5951. Division authorized.
23(a) Division of domestic corporation.--Any domestic
24nonprofit corporation may, in the manner provided in this
25subchapter, be divided into two or more domestic nonprofit
26corporations incorporated or to be incorporated under this
27article, or into one or more domestic nonprofit corporations and
28one or more foreign nonprofit corporations to be incorporated
29under the laws of another jurisdiction or jurisdictions, or into
30two or more foreign nonprofit corporations, if the laws of the
1other jurisdictions authorize the division.
2(b) Division of foreign corporation.--Any foreign nonprofit
3corporation may, in the manner provided in this subchapter, be
4divided into one or more domestic nonprofit corporations to be
5incorporated under this subpart and one or more foreign
6nonprofit corporations incorporated or to be incorporated under
7the laws of another jurisdiction or jurisdictions, or into two
8or more domestic nonprofit corporations, if the foreign
9nonprofit corporation is authorized under the laws of the
10jurisdiction under which it is incorporated to effect a
11division.
12(c) Surviving and new corporations.--The corporation
13effecting a division, if it survives the division, is designated
14in this subchapter as the surviving corporation. All
15corporations originally incorporated by a division are
16designated in this subchapter as new corporations. The surviving
17corporation, if any, and the new corporation or corporations are
18collectively designated in this subchapter as the resulting
19corporations.
20§ 5952. Proposal and adoption of plan of division.
21(a) Preparation of plan.--A plan of division shall be
22prepared, setting forth:
23(1) The terms and conditions of the division, including
24the manner and basis of:
25(i) The reclassification of the membership interests
26or shares of the surviving corporation, if there be one.
27(ii) The disposition of the membership interests or
28shares or obligations, if any, of the new corporation or
29corporations resulting from the division.
30(2) A statement that the dividing nonprofit corporation
1will, or will not, survive the division.
2(3) Any changes desired to be made in the articles of
3the surviving corporation, if there be one, including a
4restatement of the articles.
5(4) The articles of incorporation required by subsection
6(b).
7(5) Such other provisions as are deemed desirable.
8(b) Articles of new corporations.--There shall be included
9in or annexed to the plan of division:
10(1) Articles of incorporation, which shall contain all
11of the statements required by this subpart to be set forth in
12restated articles, for each of the new domestic nonprofit
13corporations, if any, resulting from the division.
14(2) Articles of incorporation, certificates of
15incorporation or other charter documents for each of the new
16foreign nonprofit corporations, if any, resulting from the
17division.
18(c) Proposal and adoption.--Except as otherwise provided in
19section 5953 (relating to division without member approval), the
20plan of division shall be proposed and adopted, and may be
21amended after its adoption and terminated, by a domestic
22nonprofit corporation in the manner provided for the proposal,
23adoption, amendment and termination of a plan of merger in
24Subchapter C (relating to merger, consolidation and sale of
25assets) or, if the dividing corporation is a foreign nonprofit
26corporation, in accordance with the laws of the jurisdiction in
27which it is incorporated and, in the case of a foreign
28domiciliary corporation, the provisions of this subpart to the
29extent provided by section 6145 (relating to applicability of
30certain safeguards to foreign corporations). There shall be
1included in or enclosed with the notice of the meeting of
2members that will act on the plan a copy or summary of the plan.
3(d) Special requirements.--If any provision of the bylaws of
4a dividing domestic nonprofit corporation adopted before January
51, 1972 shall require for the adoption of a plan of merger or
6consolidation or a plan involving the sale, lease or exchange of
7all or substantially all of the property and assets of the
8corporation a specific number or percentage of votes of
9directors, members, or members of an other body or other special
10procedures, the plan of division shall not be adopted without
11such number or percentage of votes or compliance with such other
12special procedures.
13(e) Financial status of resulting corporations.--Unless the
14plan of division provides that the dividing corporation shall
15survive the division and that all membership interests or shares
16or obligations, if any, of all new corporations resulting from
17the plan shall be owned solely by the surviving corporation, no
18plan of division may be made effective at a time when the
19dividing corporation is insolvent or when the division would
20render any of the resulting corporations insolvent.
21(f) Rights of holders of indebtedness.--If any debt
22securities, notes or similar evidences of indebtedness for money
23borrowed, whether secured or unsecured, indentures or other
24contracts were issued, incurred or executed by the dividing
25corporation before January 1, 1972, and have not been amended
26subsequent to that date, the liability of the dividing
27corporation thereunder shall not be affected by the division nor
28shall the rights of the obligees thereunder be impaired by the
29division, and each of the resulting corporations may be
30proceeded against or substituted in place of the dividing
1corporation as joint and several obligors on such liability,
2regardless of any provision of the plan of division apportioning
3the liabilities of the dividing corporation.
4(g) Reference to outside facts.--Any of the terms of a plan
5of division may be made dependent upon facts ascertainable
6outside of the plan if the manner in which the facts will
7operate upon the terms of the plan is set forth in the plan.
8Such facts may include, without limitation, actions or events
9within the control of or determinations made by the dividing
10corporation or a representative of the dividing corporation.
11§ 5953. Division without member approval.
12Unless otherwise required by its bylaws or by section 5952
13(relating to proposal and adoption of plan of division), a plan
14of division that does not alter the state of incorporation of a
15nonprofit corporation nor amend in any respect the provisions of
16its articles, except amendments that under section 5914(b)
17(relating to adoption in absence of voting members) may be made
18without member action, shall not require the approval of the
19members of the corporation if the transfers of assets effected
20by the division, if effected by means of a sale, lease, exchange
21or other disposition, would not require the approval of members
22under section 5930 (relating to voluntary transfer of corporate
23assets).
24§ 5954. Articles of division.
25Upon the adoption of a plan of division by the corporation
26desiring to divide, as provided in this subchapter, articles of
27division shall be executed by the corporation and shall, subject
28to section 109 (relating to name of commercial registered office
29provider in lieu of registered address), set forth:
30(1) The name and the location of the registered office,
1including street and number, if any, of the dividing domestic
2nonprofit corporation or, in the case of a dividing foreign
3nonprofit corporation, the name of the corporation and the
4jurisdiction in which it is incorporated, together with
5either:
6(i) If a qualified foreign nonprofit corporation,
7the address, including street and number, if any, of its
8registered office in this Commonwealth.
9(ii) If a nonqualified foreign nonprofit
10corporation, the address, including street and number, if
11any, of its principal office under the laws of that
12jurisdiction.
13(2) The statute under which the dividing corporation was
14incorporated and the date of incorporation.
15(3) A statement that the dividing corporation will, or
16will not, survive the division.
17(4) The name and the address, including street and
18number, if any, of the registered office of each new domestic
19nonprofit corporation or qualified foreign nonprofit
20corporation resulting from the division.
21(5) If the plan is to be effective on a specified date,
22the hour, if any, and the month, day and year of the
23effective date.
24(6) The manner in which the plan was adopted by the
25corporation.
26(7) Except as provided in section 5901 (relating to
27omission of certain provisions from filed plans), the plan of
28division.
29§ 5955. Filing of articles of division.
30(a) General rule.--The articles of division and the
1certificates or statement, if any, required by section 139
2(relating to tax clearance of certain fundamental transactions)
3shall be filed in the Department of State.
4(b) Cross reference.--See section 134 (relating to docketing
5statement).
6§ 5956. Effective date of division.
7Upon the filing of articles of division in the department or
8upon the effective date specified in the plan of division,
9whichever is later, the division shall become effective. The
10division of a domestic nonprofit corporation into one or more
11foreign nonprofit corporations or the division of a foreign
12nonprofit corporation shall be effective according to the laws
13of the jurisdictions where the foreign corporations are or are
14to be incorporated and, in the case of a foreign domiciliary
15corporation, the provisions of this subpart to the extent
16provided by section 6145 (relating to applicability of certain
17safeguards to foreign domiciliary corporations), but not until
18articles of division have been adopted and filed as provided in
19this subchapter.
20§ 5957. Effect of division.
21(a) Multiple resulting corporations.--Upon the division
22becoming effective, the dividing corporation shall be subdivided
23into the distinct and independent resulting corporations named
24in the plan of division and, if the dividing corporation is not
25to survive the division, the existence of the dividing
26corporation shall cease. The resulting corporations, if they are
27domestic nonprofit corporations, shall not thereby acquire
28authority to engage in any business or exercise any right that a
29corporation may not be incorporated under this subpart to engage
30in or exercise. Any resulting foreign nonprofit corporation that
1is stated in the articles of division to be a qualified foreign
2nonprofit corporation shall be a qualified foreign nonprofit
3corporation under Article C (relating to foreign nonprofit
4corporations), and the articles of division shall be deemed to
5be the application for a certificate of authority and the
6certificate of authority issued thereon of the corporation.
7(b) Property rights; allocations of assets and
8liabilities.--
9(1) Except as otherwise provided by order, if any,
10obtained pursuant to section 5547(b) (relating to
11nondiversion of certain property):
12(i) All the property, real, personal and mixed, and
13franchises of the dividing corporation, and all debts due
14on whatever account to it, including subscriptions for
15membership and other choses in action belonging to it,
16shall, to the extent allocations of assets are
17contemplated by the plan of division, be deemed without
18further action to be allocated to and vested in the
19resulting corporations on such a manner and basis and
20with such effect as is specified in the plan, or per
21capita among the resulting corporations, as tenants in
22common, if no specification is made in the plan, and the
23title to any real estate, or interest therein, vested in
24any of the corporations shall not revert or be in any way
25impaired by reason of the division.
26(ii) Upon the division becoming effective, the
27resulting corporations shall each thenceforth be
28responsible as separate and distinct corporations only
29for such liabilities as each corporation may undertake or
30incur in its own name, but shall be liable for the
1liabilities of the dividing corporation in the manner and
2on the basis provided in subparagraphs (iv) and (v).
3(iii) Liens upon the property of the dividing
4corporation shall not be impaired by the division.
5(iv) Except as provided in section 5952(f) (relating
6to proposal and adoption of plan of division), to the
7extent allocations of liabilities are contemplated by the
8plan of division, the liabilities of the dividing
9corporation shall be deemed without further action to be
10allocated to and become the liabilities of the resulting
11corporations on such a manner and basis and with such
12effect as is specified in the plan; and one or more, but
13less than all, of the resulting corporations shall be
14free of the liabilities of the dividing corporation to
15the extent, if any, specified in the plan, if in either
16case:
17(A) no fraud on members without voting rights or
18violation of law shall be effected thereby; and
19(B) the plan does not constitute a fraudulent
20transfer under 12 Pa.C.S. Ch. 51 (relating to
21fraudulent transfers).
22(v) If the conditions in subparagraph (iv) for
23freeing one or more of the resulting corporations from
24the liabilities of the dividing corporation or for
25allocating some or all of the liabilities of the dividing
26corporation are not satisfied, the liabilities of the
27dividing corporation as to which those conditions are not
28satisfied shall not be affected by the division nor shall
29the rights of creditors thereunder be impaired by the
30division and any claim existing or action or proceeding
1pending by or against the corporation with respect to
2those liabilities may be prosecuted to judgment as if the
3division had not taken place, or the resulting
4corporations may be proceeded against or substituted in
5place of the dividing corporation as joint and several
6obligors on those liabilities, regardless of any
7provision of the plan of division apportioning the
8liabilities of the dividing corporation.
9(2) It shall not be necessary for a plan of division to
10list each individual asset or liability of the dividing
11corporation to be allocated to a new corporation so long as
12those assets and liabilities are described in a reasonable
13manner.
14(3) Each new corporation shall hold any assets and
15liabilities allocated to it as the successor to the dividing
16corporation, and those assets and liabilities shall not be
17deemed to have been assigned to the new corporation in any
18manner, whether directly or indirectly or by operation of
19law.
20(c) Taxes.--Any taxes, interest, penalties and public
21accounts of the Commonwealth claimed against the dividing
22corporation that are settled, assessed or determined prior to or
23after the division shall be the liability of any of the
24resulting corporations and, together with interest thereon,
25shall be a lien against the franchises and property, both real
26and personal, of all the corporations. Upon the application of
27the dividing corporation, the Department of Revenue, with the
28concurrence of the Office of Employment Security of the
29Department of Labor and Industry, shall release one or more, but
30less than all, of the resulting corporations from liability and
1liens for all taxes, interest, penalties and public accounts of
2the dividing corporation due the Commonwealth for periods prior
3to the effective date of the division if those departments are
4satisfied that the public revenues will be adequately secured.
5(d) Articles of surviving corporation.--The articles of
6incorporation of the surviving corporation, if there be one,
7shall be deemed to be amended to the extent, if any, that
8changes in its articles are stated in the plan of division.
9(e) Articles of new corporations.--The statements that are
10set forth in the plan of division with respect to each new
11domestic nonprofit corporation and that are required or
12permitted to be set forth in restated articles of incorporation
13of corporations incorporated under this subpart, or the articles
14of incorporation of each new corporation set forth therein,
15shall be deemed to be the articles of incorporation of each new
16corporation.
17(f) Directors and officers.--Unless otherwise provided in
18the plan, the directors and officers of the dividing corporation
19shall be the initial directors and officers of each of the
20resulting corporations.
21(g) Disposition of memberships.--Unless otherwise provided
22in the plan, the memberships and other securities or
23obligations, if any, of each new corporation resulting from the
24division shall be distributable to:
25(1) the surviving corporation if the dividing
26corporation survives the division; or
27(2) the members of the dividing corporation pro rata in
28any other case.
29(h) Conflict of laws.--It is the intent of the General
30Assembly that:
1(1) The effect of a division of a domestic nonprofit
2corporation shall be governed solely by the laws of this
3Commonwealth and any other jurisdiction under the laws of
4which any of the resulting corporations is incorporated.
5(2) The effect of a division on the assets and
6liabilities of the dividing corporation shall be governed
7solely by the laws of this Commonwealth and any other
8jurisdiction under the laws of which any of the resulting
9corporations is incorporated.
10(3) The validity of any allocations of assets or
11liabilities by a plan of division of a domestic nonprofit
12corporation, regardless of whether any of the new
13corporations is a foreign nonprofit corporation, shall be
14governed solely by the laws of this Commonwealth.
15(4) In addition to the express provisions of this
16subsection, this subchapter shall otherwise generally be
17granted the protection of full faith and credit under the
18Constitution of the United States.
19SUBCHAPTER E
20CONVERSION
21Sec.
225961. Conversion authorized.
235962. Proposal and adoption of plan of conversion.
245963. Articles of conversion.
255964. Filing of articles of conversion.
265965. Effective date of conversion.
275966. Effect of conversion.
28§ 5961. Conversion authorized.
29(a) General rule.--Any nonprofit corporation may, in the
30manner provided in this subchapter, be converted into a business
1corporation, hereinafter designated as the resulting
2corporation.
3(b) Exceptions.--
4(1) This subchapter shall not authorize any conversion
5involving:
6(i) A cooperative corporation.
7(ii) Beneficial, benevolent, fraternal or fraternal
8benefit societies having a lodge system and a
9representative form of government, or transacting any
10type of insurance whatsoever.
11(iii) Any corporation which by the laws of this
12Commonwealth is subject to the supervision of the
13Department of Banking, the Insurance Department or the
14Pennsylvania Public Utility Commission.
15(2) Paragraph (1) of this subsection shall not be
16construed as repealing any statute which provides a procedure
17for the conversion of a nonprofit corporation into an
18insurance corporation.
19§ 5962. Proposal and adoption of plan of conversion.
20(a) Preparation of plan.--A plan of conversion shall be
21prepared, setting forth:
22(1) The terms and conditions of the conversion.
23(2) The mode of carrying the conversion into effect.
24(3) A restatement of the articles of the resulting
25corporation, which articles shall comply with the
26requirements of Subpart B of Part II (relating to business
27corporations).
28(4) Such other details and provisions as are deemed
29desirable.
30(b) Proposal and adoption.--The plan of conversion shall be
1proposed and adopted, and may be terminated, in the manner
2provided for the proposal, adoption and termination of a plan of
3merger in Subchapter C (relating to merger, consolidation and
4sale of assets).
5§ 5963. Articles of conversion.
6Upon the adoption of a plan of conversion by the nonprofit
7corporation desiring to convert, as provided in this subchapter,
8articles of conversion shall be executed by the corporation and
9shall set forth:
10(1) The name of the corporation and, subject to section
11109 (relating to name of commercial registered office
12provider in lieu of registered address), the address,
13including street and number, if any, of its registered
14office.
15(2) The statute under which the corporation was
16incorporated and the date of incorporation.
17(3) If the plan is to be effective on a specified date,
18the hour, if any, and the month, day and year of the
19effective date.
20(4) The manner in which the plan was adopted by the
21corporation.
22(5) Except as provided in section 5901 (relating to
23omission of certain provisions from filed plans), the plan of
24conversion.
25§ 5964. Filing of articles of conversion.
26(a) General rule.--The articles of conversion shall be filed
27in the Department of State.
28(b) Cross reference.--See section 134 (relating to docketing
29statement).
30§ 5965. Effective date of conversion.
1Upon the filing of articles of conversion in the Department
2of State, or upon the effective date specified in the plan of
3conversion, whichever is later, the conversion shall become
4effective.
5§ 5966. Effect of conversion.
6Upon the conversion becoming effective, the corporation shall
7be deemed to be a business corporation for all purposes, shall
8cease to be a nonprofit corporation, and may thereafter operate
9for a purpose or purposes resulting in pecuniary profit,
10incidental or otherwise, to its members or shareholders. The
11corporation shall issue share certificates to each shareholder
12entitled thereto. The corporation shall remain liable for all
13existing obligations, public and private, taxes due the
14Commonwealth or any other taxing authority for periods prior to
15the effective date of the conversion, and, as such business
16corporation, it shall continue to be entitled to all assets
17theretofore pertaining to it as a nonprofit corporation except
18as otherwise provided by order, if any, obtained pursuant to
19section 5547(b) (relating to nondiversion of certain property).
20§ 5980. Dissolution by domestication.
21Whenever a domestic nonprofit corporation has domesticated
22itself under the laws of another jurisdiction by action similar
23to that provided under section 6161 (relating to domestication)
24and has authorized that action by the vote required by this
25subchapter for the approval of a proposal that the corporation
26dissolve voluntarily, the corporation may surrender its charter
27under the laws of this Commonwealth by filing in the department
28articles of dissolution under this subchapter containing the
29statements specified under section 5977(b)(1) through (4)
30(relating to articles of dissolution). If the corporation as
1domesticated in the other jurisdiction qualifies to do business
2in this Commonwealth either prior to or simultaneously with the
3filing of the articles of dissolution under this section, the
4corporation shall not be required to file with the articles of
5dissolution the tax clearance certificates that would otherwise
6be required under section 139 (relating to tax clearance of
7certain fundamental transactions).
8§ 6121. Admission of foreign corporations.
9(a) General rule.--A foreign nonprofit corporation, before
10doing business in this Commonwealth, shall procure a certificate
11of authority to do so from the Department of State, in the
12manner provided in this subchapter. A foreign nonprofit
13corporation shall not be denied a certificate of authority by
14reason of the fact that the laws of the jurisdiction governing
15its incorporation and internal affairs differ from the laws of
16this Commonwealth.
17(b) Qualification under former statute.--If a foreign
18corporation was on March 19, 1966, admitted to do business in
19this Commonwealth by the filing of a power of attorney and
20statement under the act of June 8, 1911 (P.L.710, No.283), such
21power of attorney and statement shall be deemed an approved
22application for a certificate of authority issued under this
23subchapter and the corporation shall be deemed a holder of the
24certificate. The corporation shall include in its initial
25application, if any, for an amended certificate of authority
26under this subchapter the information required by this
27subchapter to be set forth in an application for a certificate
28of authority. A certificate of authority issued under the former
29provisions of the Nonprofit Corporation Law of 1933 or former 15
30Pa.C.S. Pt. III Art. B, known as the Nonprofit Corporation Law
1of 1972, as added by the act of November 15, 1972 (P.L.1063,
2No.271), shall be deemed to be issued under this subchapter and
3the certificate of authority shall be deemed not to contain any
4reference to the kind of business that the corporation proposes
5to do in this Commonwealth.
6§ 6122. Excluded activities.
7(a) General rule.--Without excluding other activities which
8may not constitute doing business in this Commonwealth, a
9foreign nonprofit corporation shall not be considered to be
10doing business in this Commonwealth for the purposes of this
11subchapter by reason of carrying on in this Commonwealth any one
12or more of the following acts:
13(1) Maintaining or defending any action or
14administrative or arbitration proceeding or effecting the
15settlement thereof or the settlement of claims or disputes.
16(2) Holding meetings of its directors, other body or
17members or carrying on other activities concerning its
18internal affairs.
19(3) Maintaining bank accounts.
20(4) Maintaining offices or agencies for the transfer,
21exchange and registration of its memberships or securities,
22or appointing and maintaining trustees or depositories with
23relation to its memberships or securities.
24(5) Granting funds.
25(6) Distributing information to its members.
26(7) Creating as borrower or lender, acquiring or
27incurring obligations or mortgages or other security
28interests in real or personal property.
29(8) Securing or collecting debts or enforcing any rights
30in property securing them.
1(9) Transacting any business in interstate or foreign
2commerce.
3(10) Conducting an isolated transaction completed within
4a period of 30 days and not in the course of a number of
5repeated transactions of like nature.
6(11) Inspecting, appraising and acquiring real estate
7and mortgages and other liens thereon and personal property
8and security interests therein, and holding, leasing,
9conveying and transferring them, as fiduciary or otherwise.
10(b) Exceptions.--The specification of activities in
11subsection (a) does not establish a standard for activities that
12may subject a foreign corporation to:
13(1) Service of process under any statute or general
14rule.
15(2) Taxation by the Commonwealth or any political
16subdivision thereof.
17(3) The provisions of section 6145 (relating to
18applicability of certain safeguards to foreign domiciliary
19corporations).
20§ 6123. Requirements for foreign corporation names.
21(a) General rule.--The Department of State shall not issue a
22certificate of authority to any foreign nonprofit corporation
23that, except as provided in subsection (b), has a name that is
24rendered unavailable for use by a domestic nonprofit corporation
25by any provision of section 5303(a), (b) or (c) (relating to
26corporate name).
27(b) Exceptions.--
28(1) The provisions of section 5303(b) (relating to
29duplicate use of names) shall not prevent the issuance of a
30certificate of authority to a foreign nonprofit corporation
1setting forth a name that is not distinguishable upon the
2records of the department from the name of any other domestic
3or foreign corporation for profit or not-for-profit, or of
4any corporation or other association then registered under 54
5Pa.C.S. Ch. 5 (relating to corporate and other association
6names) or to any name reserved or registered as provided in
7this part, if the foreign nonprofit corporation applying for
8a certificate of authority files in the department a
9resolution of its board of directors or other body adopting a
10fictitious name for use in transacting business in this
11Commonwealth, which fictitious name is distinguishable upon
12the records of the department from the name of the other
13corporation or other association and from any name reserved
14or registered as provided in this part that is otherwise
15available for use by a domestic nonprofit corporation.
16(2) The provisions of section 5303(c) (relating to
17required approvals or conditions) shall not prevent the
18issuance of a certificate of authority to a foreign nonprofit
19corporation setting forth a name that is prohibited by that
20subsection if the foreign nonprofit corporation applying for
21a certificate of authority files in the department a
22resolution of its board of directors or other body adopting a
23fictitious name for use in transacting business in this
24Commonwealth that is available for use by a domestic
25nonprofit corporation.]
26Section 40. Section 6124 of Title 15 is amended to read:
27§ 6124. [Application for a certificate of authority.]
28Advertisement of registration to do business.
29[(a) General rule.--An application for a certificate of
30authority shall be executed by the foreign nonprofit corporation
1and shall set forth:
2(1) The name of the corporation.
3(2) The name of the jurisdiction under the laws of which
4it is incorporated.
5(3) The address, including street and number, if any, of
6its principal office under the laws of the jurisdiction in
7which it is incorporated.
8(4) Subject to section 109 (relating to name of
9commercial registered office provider in lieu of registered
10address), the address, including street and number, if any,
11of its proposed registered office in this Commonwealth.
12(5) A statement that it is a corporation incorporated
13for a purpose or purposes not involving pecuniary profit,
14incidental or otherwise.
15(b) Advertisement.--]A foreign nonprofit corporation shall
16officially publish notice of its intention to [apply or its
17application for a certificate of authority] register to do
18business or its registration to do business in this Commonwealth
19under Chapter 4 (relating to foreign associations). The notice
20may appear prior to or after the day on which [application is
21made to the Department of State] a registration statement is
22delivered to the department for filing and shall set forth
23[briefly]:
24(1) A statement that the corporation will [apply or has
25applied for a certificate of authority under the provisions
26of the Nonprofit Corporation Law of 1988] register or has
27registered to do business in this Commonwealth under Chapter
284.
29(2) The name of the corporation and [of the jurisdiction
30under the laws of which it is incorporated] its jurisdiction
1of formation.
2(3) The address, including street and number, if any, of
3its principal office under the laws of [the jurisdiction in
4which it is incorporated] its jurisdiction of formation.
5(4) Subject to section 109, the address, including
6street and number, if any, of its proposed registered office
7in this Commonwealth.
8(c) [Filing.--The application for a certificate of authority
9shall be filed in the Department of State.] (Reserved).
10(d) [Cross reference.--See section 134 (relating to
11docketing statement).] (Reserved).
12Section 41. Sections 6125, 6126, 6127 and 6128 of Title 15
13are repealed:
14[§ 6125. Issuance of certificate of authority.
15Upon the filing of the application for a certificate of
16authority, the foreign nonprofit corporation shall be deemed to
17hold a certificate of authority to do business in this
18Commonwealth.
19§ 6126. Amended certificate of authority.
20(a) General rule.--After receiving a certificate of
21authority, a qualified foreign nonprofit corporation may,
22subject to the provisions of this subchapter, change or correct
23any of the information set forth in its application for a
24certificate of authority or previous filings under this section
25by filing in the Department of State an application for an
26amended certificate of authority. The application shall be
27executed by the corporation and shall state:
28(1) The name under which the applicant corporation
29currently holds a certificate of authority to do business in
30this Commonwealth.
1(2) Subject to section 109 (relating to name of
2commercial registered office provider in lieu of registered
3address), the address, including street and number, if any,
4of its registered office in this Commonwealth.
5(3) The information to be changed or corrected.
6(4) If the application reflects a change in the name of
7the corporation, the application shall include a statement
8that either:
9(i) the change of name reflects a change effected in
10the jurisdiction of incorporation; or
11(ii) documents complying with section 6123(b)
12(relating to exceptions) accompany the application.
13(b) Issuance of amended certificate of authority.--Upon the
14filing of the application, the applicant corporation shall be
15deemed to hold an amended certificate of authority.
16(c) Cross reference.--See section 134 (relating to docketing
17statement).
18§ 6127. Merger, consolidation or division of qualified foreign
19corporations.
20(a) General rule.--Whenever a qualified foreign nonprofit
21corporation is a nonsurviving party to a statutory merger,
22consolidation or division permitted by the laws of the
23jurisdiction under which it is incorporated, the corporation
24surviving the merger, or the new corporation resulting from the
25consolidation or division, as the case may be, shall file in the
26Department of State a statement of merger, consolidation or
27division, which shall be executed by the surviving or new
28corporation and shall set forth:
29(1) The name of each nonsurviving qualified foreign
30nonprofit corporation.
1(2) The name of the jurisdictions under the laws of
2which each nonsurviving qualified foreign nonprofit
3corporation was incorporated.
4(3) The date on which each nonsurviving qualified
5foreign nonprofit corporation received a certificate of
6authority to do business in this Commonwealth.
7(4) A statement that the corporate existence of each
8nonsurviving qualified foreign nonprofit corporation has been
9terminated by merger, consolidation or division, as the case
10may be.
11(5) In the case of a consolidation or division or if the
12surviving corporation was a nonqualified foreign nonprofit
13corporation prior to the merger, the statements on the part
14of the surviving or new corporation required by section
156124(a) (relating to application for a certificate of
16authority).
17(b) Effect of filing.--The filing of the statement shall
18operate, as of the effective date of the merger, consolidation
19or division, to cancel the certificate of authority of each
20nonsurviving constituent corporation that was a qualified
21foreign nonprofit corporation and to qualify the surviving or
22new corporation under this subchapter. If the surviving or new
23corporation does not desire to continue as a qualified foreign
24nonprofit corporation, it may thereafter withdraw in the manner
25provided by section 6129 (relating to application for
26termination of authority).
27(c) Surviving qualified foreign corporations.--It shall not
28be necessary for a surviving corporation that was a qualified
29foreign nonprofit corporation to effect any filing under this
30subchapter with respect to a merger or division or to procure an
1amended certificate of authority to do business in this
2Commonwealth unless the name of such corporation is changed by
3the merger or division.
4(d) Cross reference.--See section 134 (relating to docketing
5statement).
6§ 6128. Revocation of certificate of authority.
7(a) General rule.--Whenever the Department of State finds
8that a qualified foreign nonprofit corporation has failed to
9secure an amended certificate of authority as required by this
10subchapter after changing its name, or has failed or refused to
11appear by its proper representatives, or otherwise to comply
12with any subpoena issued by any court having jurisdiction of the
13subject matter, or to produce books, papers, records or
14documents as required by a subpoena, or is violating any of the
15laws of this Commonwealth, or that its articles have been
16revoked or voided by its jurisdiction of incorporation, the
17department shall give notice and opportunity for hearing by
18registered or certified mail to the corporation that the default
19exists and that its certificate of authority, including any
20amendments thereof, will be revoked unless the default is cured
21within 30 days after the mailing of the notice. If the default
22is not cured within the period of 30 days, the department shall
23revoke the certificate of authority, including any amendments
24thereof, of the foreign nonprofit corporation. Upon revoking the
25certificate of authority, the department shall mail to the
26corporation, at its registered office in this Commonwealth, a
27certificate of revocation.
28(b) Effect of revocation.--Upon the issuance of the
29certificate of revocation, the authority of the corporation to
30do business in this Commonwealth shall cease and the corporation
1shall not thereafter do any business in this Commonwealth unless
2it applies for and receives a new certificate of authority.]
3Section 42. Section 6129 of Title 15 is amended to read:
4§ 6129. [Application for] Advertisement of termination of
5[authority] registration to do business.
6[(a) General rule.--Any qualified foreign nonprofit
7corporation may withdraw from doing business in this
8Commonwealth and surrender its certificate of authority by
9filing in the Department of State an application for termination
10of authority, executed by the corporation, which shall set
11forth:
12(1) The name of the corporation and, subject to section
13109 (relating to name of commercial registered office
14provider in lieu of registered address), the address,
15including street and number, if any, of its registered office
16in this Commonwealth.
17(2) The name of the jurisdiction under the laws of which
18it is incorporated.
19(3) The date on which it received a certificate of
20authority to do business in this Commonwealth.
21(4) A statement that it surrenders its certificate of
22authority to do business in this Commonwealth.
23(5) A statement that notice of its intention to withdraw
24from doing business in this Commonwealth was mailed by
25certified or registered mail to each municipal corporation in
26which the registered office or principal place of business of
27the corporation in this Commonwealth is located, and that the
28official publication required by subsection (b) has been
29effected.
30(6) The post office address, including street and
1number, if any, to which process may be sent in an action or
2proceeding upon any liability incurred before the filing of
3the application for termination of authority.
4(b) Advertisement.--]A [qualified] registered foreign
5nonprofit corporation shall, before filing [an application for
6termination of authority] a statement of withdrawal under
7section 415 (relating to voluntary withdrawal of registration),
8officially publish and mail a notice of its intention to
9withdraw from doing business in this Commonwealth in a manner
10similar to that required by section 5975(b) (relating to notice
11to creditors and taxing authorities). The notice shall set forth
12[briefly]:
13(1) The name of the corporation and [the jurisdiction
14under the laws of which it is incorporated] its jurisdiction
15of formation.
16(2) The address, including street and number, if any, of
17its principal office under the laws of its jurisdiction of
18[incorporation] formation.
19(3) Subject to section 109, the address, including
20street and number, if any, of its last registered office in
21this Commonwealth.
22(c) [Filing.--The application for termination of authority
23and the certificates or statement required by section 139
24(relating to tax clearance of certain fundamental transactions)
25shall be filed in the department. See section 134 (relating to
26docketing statement).] (Reserved).
27(d) [Effect of filing.--Upon the filing of the application
28for termination of authority, the authority of the corporation
29to do business in this Commonwealth shall cease. The termination
30of authority shall not affect any action or proceeding pending
1at the time thereof or affect any right of action arising with
2respect to the corporation before the filing of the application
3for termination of authority. Process against the corporation in
4an action upon any liability incurred before the filing of the
5application for termination of authority may be served as
6provided in 42 Pa.C.S. Ch. 53 (relating to bases of jurisdiction
7and interstate and international procedure) or as otherwise
8provided or prescribed by law.] (Reserved).
9Section 43. Sections 6130, 6131, 6141, 6142, 6143, 6144 and
10Subchapter D of Chapter 61 of Title 15 are repealed:
11[§ 6130. Change of address after withdrawal.
12(a) General rule.--Any foreign nonprofit corporation that
13has withdrawn from doing business in this Commonwealth, or its
14successor in interest, may, from time to time, change the
15address to which process may be sent in an action upon any
16liability incurred before the filing of an application for
17termination of authority by filing in the Department of State a
18statement of change of address by the withdrawn corporation
19executed by the corporation, setting forth:
20(1) The name of the withdrawn corporation and, if the
21statement is filed by a successor in interest, the name and
22capacity of the successor.
23(2) The name of the jurisdiction under the laws of which
24the corporation filing the statement is incorporated.
25(3) The former post office address, including street and
26number, if any, of the withdrawn corporation as of record in
27the department.
28(4) The new post office address, including street and
29number, if any, of the withdrawn corporation or its
30successor.
1(b) Cross reference.--See section 134 (relating to docketing
2statement).
3§ 6131. Registration of name.
4(a) General rule.--A nonqualified foreign nonprofit
5corporation may register its name under 54 Pa.C.S. Ch. 5
6(relating to corporate and other association names) if the name
7is available for use by a qualified foreign nonprofit
8corporation under section 6123 (relating to requirements for
9foreign corporation names), by filing in the Department of State
10an application for registration of name, executed by the
11corporation, which shall set forth:
12(1) The name of the corporation.
13(2) The address, including street and number, if any, of
14the corporation.
15(b) Annual renewal.--A corporation that has in effect a
16registration of its corporate name may renew the registration
17from year to year by annually filing an application for renewal
18setting forth the facts required to be set forth in an original
19application for registration. A renewal application may be filed
20between October 1 and December 31 in each year and shall extend
21the registration for the following calendar year.
22(c) Cross reference.--See section 134 (relating to docketing
23statement).
24§ 6141. Penalty for doing business without certificate of
25authority.
26(a) Right to bring actions suspended.--A nonqualified
27foreign nonprofit corporation doing business in this
28Commonwealth within the meaning of Subchapter B (relating to
29qualification) shall not be permitted to maintain any action or
30proceeding in any court of this Commonwealth until the
1corporation has obtained a certificate of authority. Except as
2provided in subsection (b), an action or proceeding may not be
3maintained in any court of this Commonwealth by any successor or
4assignee of the corporation on any right, claim or demand
5arising out of the doing of business by the corporation in this
6Commonwealth until a certificate of authority has been obtained
7by the corporation or by a corporation that has acquired all or
8substantially all of its assets.
9(a.1) Contracts, property and defense against actions
10unaffected.--The failure of a foreign nonprofit corporation to
11obtain a certificate of authority to transact business in this
12Commonwealth shall not impair the validity of any contract or
13act of the corporation, shall not prevent the corporation from
14defending any action in any court of this Commonwealth and shall
15not render escheatable any of its real or personal property.
16§ 6142. General powers and duties of qualified foreign
17corporations.
18(a) General rule.--A qualified foreign nonprofit
19corporation, so long as its certificate of authority is not
20revoked, shall enjoy the same rights and privileges as a
21domestic nonprofit corporation, but no more, and, except as in
22this subpart otherwise provided, shall be subject to the same
23liabilities, restrictions, duties and penalties now in force or
24hereafter imposed upon domestic nonprofit corporations, to the
25same extent as if it had been incorporated under this subpart.
26(b) Agricultural lands.--Interests in agricultural land
27shall be subject to the restrictions of and escheatable as
28provided by the act of April 6, 1980 (P.L.102, No.39), referred
29to as the Agricultural Land Acquisition by Aliens Law.
30§ 6143. General powers and duties of nonqualified foreign
1corporations.
2(a) Acquisition of real and personal property.--Every
3nonqualified foreign nonprofit corporation may acquire, hold,
4mortgage, lease and transfer real and personal property in this
5Commonwealth, in the same manner and subject to the same
6limitations as a qualified foreign nonprofit corporation.
7(b) Duties.--Except as provided in section 6141(a) (relating
8to penalty for doing business without certificate of authority),
9a nonqualified foreign nonprofit corporation doing business in
10this Commonwealth within the meaning of Subchapter B (relating
11to qualification) shall be subject to the same liabilities,
12restrictions, duties and penalties now or hereafter imposed upon
13a qualified foreign nonprofit corporation.
14§ 6144. Registered office of qualified foreign corporations.
15(a) General rule.--Subject to the provisions of section
165507(c) (relating to alternative procedure), every qualified
17foreign nonprofit corporation shall have, and continuously
18maintain, in this Commonwealth a registered office, which may
19but need not be the same as its place of business in this
20Commonwealth.
21(b) Change.--A qualified foreign corporation may, from time
22to time, change the address of its registered office in the
23manner provided by section 5507(b) (relating to statement of
24change of registered office).
25SUBCHAPTER D
26DOMESTICATION
27Sec.
286161. Domestication.
296162. Effect of domestication.
30§ 6161. Domestication.
1(a) General rule.--Any qualified foreign nonprofit
2corporation may become a domestic nonprofit corporation by
3filing in the Department of State articles of domestication. The
4articles of domestication, upon being filed in the department,
5shall constitute the articles of the domesticated foreign
6corporation, and it shall thereafter continue as a corporation
7which shall be a domestic nonprofit corporation subject to this
8subpart.
9(b) Articles of domestication.--The articles of
10domestication shall be executed by the corporation and shall set
11forth in the English language:
12(1) The name of the corporation. If the name is in a
13foreign language, it shall be set forth in Roman letters or
14characters or Arabic or Roman numerals.
15(2) Subject to section 109 (relating to name of
16commercial registered office provider in lieu of registered
17address), the address, including street and number, if any,
18of its registered office in this Commonwealth.
19(3) A statement that upon domestication the corporation
20will be subject to the domestic corporation provisions of the
21Nonprofit Corporation Law of 1988 and a brief statement of
22the purpose or purposes for which it is to be domesticated
23which shall be a purpose or purposes for which a domestic
24nonprofit corporation may be incorporated under Article B
25(relating to domestic nonprofit corporations generally).
26(4) The term for which upon domestication it is to
27exist, if not perpetual.
28(5) Any desired provisions relating to the manner and
29basis of reclassifying the memberships in the corporation.
30(6) A statement that the filing of articles of
1domestication and, if desired, the renunciation of the
2original charter or articles of the corporation has been
3authorized (unless its charter or other organic documents
4require a greater vote) by a majority of the votes cast by
5all members entitled to vote thereon and, if any class of
6members is entitled to vote thereon as a class, a majority of
7the votes cast in each class vote.
8(7) Any other provisions authorized by Article B to be
9set forth in the original articles.
10(c) Cross reference.--See section 134 (relating to docketing
11statement).
12§ 6162. Effect of domestication.
13As a domestic nonprofit corporation, the domesticated
14corporation shall no longer be a foreign nonprofit corporation
15for the purposes of this subpart and shall have all the powers
16and privileges and be subject to all the duties and limitations
17granted and imposed upon domestic nonprofit corporations. The
18property, franchises, debts, liens, estates, taxes, penalties
19and public accounts due the Commonwealth shall continue to be
20vested in and imposed upon the corporation to the same extent as
21if it were the successor by merger of the domesticating
22corporation with and into a domestic nonprofit corporation under
23Subchapter C of Chapter 59 (relating to merger, consolidation
24and sale of assets). Memberships in the domesticated corporation
25shall be unaffected by the domestication except to the extent,
26if any, reclassified in the articles of domestication.]
<-27Section 43.1. Title 15 is amended by adding a section to
28read:
29§ 7411. Expiration.
30This chapter shall expire December 31, 2014.
1Section 44. The definitions of "bureau" and "corporation" in
2section 7702 of Title 15 are amended to read:
3§ 7702. Definitions.
4The following words and phrases when used in this chapter
5shall have the meanings given to them in this section unless the
6context clearly indicates otherwise:
7["Bureau." The Corporation Bureau of the department.]
8"Corporation." A corporation [organized] for profit which
9has elected to be governed by this chapter.
10* * *
11Section 45. Sections 7703(b)(1), 7704(d)(1) and 7723(a) of
12Title 15 are amended to read:
13§ 7703. Corporations.
14* * *
15(b) Name.--
16(1) [The corporation may adopt any corporate name to
17indicate its cooperative character as long as the name has
18not been previously adopted.] The name of the corporation
19must comply with section 202 (relating to requirements for
20names generally).
21* * *
22§ 7704. Articles of incorporation.
23* * *
24(d) Content of articles.--The articles of incorporation
25shall be signed by the persons originally associating themselves
26together and shall state [distinctly]:
27(1) The name [by which] of the corporation [shall be
28known, which may not be the same as, or confusingly similar
29to, the name of an association or corporation existing under
30the law of the Commonwealth, the name of a foreign or alien
1association or corporation authorized to transact business in
2this Commonwealth, or a corporate name reserved or registered
3as provided by law].
4* * *
5§ 7723. Dissolution.
6(a) General rule.--A corporation may dissolve and wind up;
7may merge [or consolidate] with other corporations; and may sell
8to, lease to or exchange with other corporations all or
9substantially all of its property and assets. Except as
10otherwise provided in this chapter, these actions are governed
11by Chapter 3 (relating to entity transactions) and Subchapter C
12of Chapter 19 (relating to merger[, consolidation, share
13exchanges] liabilities and sale of assets). A workers'
14cooperative corporation which has not revoked its election to be
15governed by this chapter may not [consolidate or] merge with one
16or more corporations organized under any law other than this
17chapter. If a member objects to a corporation's merger [or
18consolidation], the member may terminate membership in the
19corporation. The price of redemption of the member's interest
20shall be the amount in the member's individual capital account
21on terms and conditions as the law, the articles of
22incorporation and the bylaws provide.
23* * *
24Section 46. Section 8203 of Title 15 is repealed:
25[§ 8203. Name.
26(a) General rule.--The name of a registered limited
27liability partnership shall:
28(1) Not be one rendered unavailable for use by a
29corporation by any provision of section 1303(b) and (c)
30(relating to corporate name).
1(2) Contain the term "company," "limited" or "limited
2liability partnership," or an abbreviation of one of those
3terms, or words or abbreviations of like import in English or
4any other language.
5(b) Reservation of name.--The exclusive right to the use of
6a name for purposes of this subchapter may be reserved and
7transferred in the manner provided in section 1305 (relating to
8reservation of corporate name).]
9Section 47. Section 8211(b) of Title 15 is amended to read:
10§ 8211. Foreign registered limited liability partnerships.
11* * *
12[(b) Registration to do business.--A foreign registered
13limited liability partnership, regardless of whether or not it
14is also a foreign limited partnership, shall be subject to
15Subchapter K of Chapter 85 (relating to foreign limited
16partnerships) as if it were a foreign limited partnership,
17except that:
18(1) Its application for registration shall state that it
19is a registered limited liability partnership.
20(2) The name under which it registers and conducts
21business in this Commonwealth shall comply with the
22requirements of section 8203 (relating to name).
23(3) Section 8582(a)(5) and (6) (relating to
24registration) shall not be applicable to the application for
25registration of a foreign limited liability partnership that
26is not a foreign limited partnership.]
27* * *
28Section 48. The definitions of "certificate of limited
29partnership," "foreign limited partnership," "nonqualified
30foreign limited partnership" and "qualified foreign limited
1partnership" in section 8503(a) of Title 15 are amended to read:
2§ 8503. Definitions and index of definitions.
3(a) Definitions.--The following words and phrases when used
4in this chapter shall have the meanings given to them in this
5section unless the context clearly indicates otherwise:
6"Certificate of limited partnership." The certificate
7referred to in section 8511 (relating to certificate of limited
8partnership) and the certificate as amended. The term includes
9any other statements or certificates permitted or required to be
10filed in the Department of State by sections 108 (relating to
11change in location or status of registered office provided by
12agent) and 138 (relating to statement of correction), Chapter 3
13(relating to entity transactions) or this part. If an amendment
14of the certificate of limited partnership or a [certificate of
15merger or division made in the manner permitted by this chapter]
16statement filed under Chapter 3 restates the certificate in its
17entirety [or if there is a certificate of consolidation],
18thenceforth the "certificate of limited partnership" shall not
19include any prior documents and any certificate issued by the
20department with respect thereto shall so state.
21* * *
22"Foreign limited partnership." A partnership formed under
23the laws of any jurisdiction other than this Commonwealth and
24having as partners one or more general partners and one or more
25limited partners, whether or not required to register under
26[Subchapter K (relating to foreign limited partnerships)]
27Chapter 4 (relating to foreign associations).
28* * *
29["Nonqualified foreign limited partnership." A foreign
30limited partnership that is not a qualified foreign limited
1partnership as defined in this section.]
2* * *
3["Qualified foreign limited partnership." A foreign limited
4partnership that is registered under Subchapter K (relating to
5foreign limited partnerships) to do business in this
6Commonwealth.]
7* * *
8Section 49. Section 8505 of Title 15 is repealed:
9[§ 8505. Name.
10(a) General rule.--The name of each limited partnership as
11set forth in its certificate of limited partnership:
12(1) Shall be expressed in Roman letters or characters or
13Arabic or Roman numerals.
14(2) Shall not be one rendered unavailable to use by a
15corporation by any provision of section 1303(b) and (c)
16(relating to corporate name).
17(3) May contain the name of a limited partner or a
18general partner. See section 8523(d) (relating to use of name
19of limited partner).
20(b) Reservation of name.--The exclusive right to the use of
21a name for purposes of this chapter may be reserved and
22transferred in the manner provided by section 1305 (relating to
23reservation of corporate name).]
24Section 50. Sections 8513(d) and 8514(a) of Title 15 are
25amended to read:
26§ 8513. Cancellation of certificate.
27* * *
28[(d) Dissolution by domestication.--Whenever a domestic
29limited partnership has domesticated itself under the laws of
30another jurisdiction by action similar to that provided by
1section 8590 (relating to domestication) and has authorized that
2action by the vote required by this chapter for the approval of
3a proposal that the limited partnership dissolve voluntarily,
4the limited partnership may surrender its certificate of limited
5partnership under the laws of this Commonwealth by filing in the
6department a certificate of cancellation under subsection (a).]
7* * *
8§ 8514. Execution of certificates.
9(a) General rule.--Each certificate or other document
10required or permitted by this chapter to be [filed in] delivered
11to the Department of State for filing shall be [executed] signed
12in the following manner:
13(1) An original certificate of limited partnership must
14be signed by all general partners named therein.
15(2) A certificate of amendment must be signed by at
16least one general partner and by each other general partner
17designated in the certificate as a new general partner.
18(3) A certificate of cancellation must be signed by all
19general partners or liquidating trustees or, if there is no
20general partner or liquidating trustee, by a majority in
21interest of the limited partners.
22(4) A certificate of change of registered office must be
23signed by a general partner.
24(5) A certificate of summary of record must be signed by
25all general partners.
26(6) A certificate of withdrawal must be signed by the
27person withdrawing.
28(7) A certificate of termination must be signed by a
29general partner.
30(8) A [certificate of merger, consolidation or division]
1statement of merger, interest exchange, conversion, division
2or domestication must be signed by a general partner.
3(9) [An application for registration as a foreign
4limited partnership] A foreign registration statement must be
5signed by a general partner.
6(10) [A certificate of amendment of registration of a
7foreign limited partnership] An amendment of a foreign
8registration statement must be signed by a general partner.
9(11) A [certificate of cancellation of registration of]
10statement of withdrawal by a foreign limited partnership must
11be signed by a general partner.
12[(12) A certificate of domestication must be signed by a
13general partner.]
14* * *
15Section 51. Subchapter F of Chapter 85 of Title 15 is
16repealed:
17[SUBCHAPTER F
18MERGER AND CONSLIDATION
19Sec.
208545. Merger and consolidation of limited partnerships
21authorized.
228546. Approval of merger or consolidation.
238547. Certificate of merger or consolidation.
248548. Effective date of merger or consolidation.
258549. Effect of merger or consolidation.
26§ 8545. Merger and consolidation of limited partnerships
27authorized.
28(a) Domestic surviving or new limited partnership.--Any two
29or more domestic limited partnerships, or any two or more
30foreign limited partnerships, or any one or more domestic
1limited partnerships and any one or more foreign limited
2partnerships, may, in the manner provided in this subchapter, be
3merged into one of the domestic limited partnerships, designated
4in this subchapter as the surviving limited partnership, or
5consolidated into a new limited partnership to be formed under
6this chapter, if the foreign limited partnerships are authorized
7by the laws of the jurisdiction under which they are organized
8to effect a merger or consolidation with a limited partnership
9of another jurisdiction.
10(b) Foreign surviving or new limited partnership.--Any one
11or more domestic limited partnerships, and any one or more
12foreign limited partnerships, may, in the manner provided in
13this subchapter, be merged into one of the foreign limited
14partnerships, designated in this subchapter as the surviving
15limited partnership, or consolidated into a new limited
16partnership to be organized under the laws of the jurisdiction
17under which one of the foreign limited partnerships is
18organized, if the laws of that jurisdiction authorize a merger
19with or consolidation into a limited partnership of another
20jurisdiction.
21(c) Business trusts and other associations.--The provisions
22of this subchapter applicable to domestic and foreign limited
23partnerships shall also be applicable to a merger or
24consolidation to which a domestic limited partnership is a party
25or in which such a partnership is the resulting entity with or
26into a domestic or foreign corporation, business trust, general
27partnership or other association. Except as otherwise provided
28by law in this or any other state, the powers and duties vested
29in and imposed upon the general partners and limited partners in
30this subchapter shall be exercised and performed by the group of
1persons under the direction of whom the business and affairs of
2the corporation, business trust or other association are managed
3and the holders or owners of shares or other interests in the
4corporation, business trust or other association, respectively,
5irrespective of the names by which the managing group and the
6holders or owners of shares or other interests are designated.
7The units into which the shares or other interests in the
8corporation, business trust or other association are divided
9shall be deemed to be partnership interests for the purposes of
10applying the provisions of this subchapter to a merger or
11consolidation involving the corporation, business trust or other
12association.
13§ 8546. Approval of merger or consolidation.
14(a) Preparation of plan of merger or consolidation.--A plan
15of merger or consolidation, as the case may be, shall be
16prepared, setting forth:
17(1) The terms and conditions of the merger or
18consolidation.
19(2) If the surviving or new partnership is or is to be a
20domestic limited partnership:
21(i) in the case of a merger, any changes desired to
22be made in the certificate of limited partnership or
23partnership agreement, which may include a restatement of
24either or both; or
25(ii) in the case of a consolidation:
26(A) all of the statements required by this
27chapter to be set forth in a restated certificate of
28limited partnership; and
29(B) the written provisions, if any, of the
30partnership agreement.
1(3) The manner and basis of converting the partnership
2interests of each limited partnership into partnership
3interests, securities or obligations of the surviving or new
4limited partnership, as the case may be, and, if any of the
5partnership interests of any of the limited partnerships that
6are parties to the merger or consolidation are not to be
7converted solely into partnership interests, securities or
8obligations of the surviving or new limited partnership, the
9partnership interests, securities or obligations of any other
10person or cash, property or rights that the holders of such
11partnership interests are to receive in exchange for, or upon
12conversion of, such partnership interests, and the surrender
13of any certificates evidencing them, which securities or
14obligations, if any, of any other person or cash, property or
15rights may be in addition to or in lieu of the partnership
16interests, securities or obligations of the surviving or new
17limited partnership.
18(4) Such other provisions as are deemed desirable.
19(b) Post-adoption amendment of plan of merger or
20consolidation.--A plan of merger or consolidation may contain a
21provision that the general partners of the constituent limited
22partnerships may amend the plan at any time prior to its
23effective date, except that an amendment made subsequent to any
24adoption of the plan by the limited partners of any constituent
25domestic limited partnership shall not change:
26(1) The amount or kind of partnership interests,
27obligations, cash, property or rights to be received in
28exchange for or on conversion of all or any of the
29partnership interests of the constituent domestic limited
30partnership adversely to the holders of those partnership
1interests.
2(2) Any term of the certificate of limited partnership
3or partnership agreement of the surviving or new limited
4partnership as it is to be in effect immediately following
5consummation of the merger or consolidation except provisions
6that may be amended without the approval of the limited
7partners.
8(3) Any of the other terms and conditions of the plan if
9the change would adversely affect the holders of any
10partnership interests of the constituent domestic limited
11partnership.
12(c) Proposal of merger or consolidation.--Every merger or
13consolidation shall be proposed in the case of each domestic
14limited partnership by the adoption by the general partners of a
15resolution approving the plan of merger or consolidation. Except
16where the approval of the limited partners is unnecessary under
17this subchapter or the partnership agreement, the general
18partners shall submit the plan to a vote of the limited partners
19entitled to vote thereon at a regular or special meeting of the
20limited partners.
21(d) Party to plan.--An association that approves a plan in
22its capacity as a partner or creditor of a merging or
23consolidating limited partnership, or that furnishes all or a
24part of the consideration contemplated by a plan, does not
25thereby become a party to the merger or consolidation for the
26purposes of this subchapter.
27(e) Notice of meeting of limited partners.--Notwithstanding
28any other provision of the partnership agreement, written notice
29of the meeting of limited partners called for the purpose of
30considering the proposed plan shall be given to each limited
1partner of record, whether or not entitled to vote thereon, of
2each domestic limited partnership that is a party to the
3proposed merger or consolidation. There shall be included in, or
4enclosed with, the notice a copy of the proposed plan or a
5summary thereof. The provisions of this subsection may not be
6relaxed by the certificate of limited partnership or partnership
7agreement.
8(f) Adoption of plan by limited partners.--The plan of
9merger or consolidation shall be adopted upon receiving a
10majority of the votes cast by all limited partners, if any,
11entitled to vote thereon of each of the domestic limited
12partnerships that is a party to the proposed merger or
13consolidation and, if any class of limited partners is entitled
14to vote thereon as a class, a majority of the votes cast in each
15class vote. A proposed plan of merger or consolidation shall not
16be deemed to have been adopted by the limited partnership unless
17it has also been approved by the general partners, regardless of
18the fact that the general partners have directed or suffered the
19submission of the plan to the limited partners for action.
20(g) Adoption by general partners.--
21(1) Unless otherwise required by the partnership
22agreement, a plan of merger or consolidation shall not
23require the approval of the limited partners of a limited
24partnership if:
25(i) the plan, whether or not the limited partnership
26is the surviving limited partnership, does not alter the
27status of the limited partnership as a domestic limited
28partnership or alter in any respect the provisions of its
29certificate of limited partnership or partnership
30agreement, except changes that may be made without action
1by the limited partners; and
2(ii) each partnership interest outstanding
3immediately prior to the effective date of the merger or
4consolidation is to continue as or to be converted into,
5except as may be otherwise agreed by the holder thereof,
6an identical partnership interest in the surviving or new
7limited partnership after the effective date of the
8merger or consolidation.
9(2) If a merger or consolidation is effected pursuant to
10paragraph (1), the plan of merger or consolidation shall be
11deemed adopted by the limited partnership when it has been
12adopted by the general partners pursuant to subsection (c).
13(h) Termination of plan.--Prior to the time when a merger or
14consolidation becomes effective, the merger or consolidation may
15be terminated pursuant to provisions therefor, if any, set forth
16in the plan. If a certificate of merger or consolidation has
17been filed in the department prior to the termination, a
18certificate of termination executed by each limited partnership
19that is a party to the merger or consolidation, unless the plan
20permits termination by less than all of the limited
21partnerships, in which case the certificate shall be executed on
22behalf of the limited partnership exercising the right to
23terminate, shall be filed in the department. The certificate of
24termination shall set forth:
25(1) A copy of the certificate of merger or consolidation
26relating to the plan that is terminated.
27(2) A statement that the plan has been terminated in
28accordance with the provisions therefor set forth therein.
29See sections 134 (relating to docketing statement), 135
30(relating to requirements to be met by filed documents), 138
1(relating to statement of correction) and 8514 (relating to
2execution of certificates).
3(i) Authorization by foreign limited partnerships.--The plan
4of merger or consolidation shall be authorized, adopted or
5approved by each foreign limited partnership that desires to
6merge or consolidate in accordance with the laws of the
7jurisdiction in which it is organized.
8(j) Reference to outside facts.--Any of the terms of a plan
9of merger or consolidation may be made dependent upon facts
10ascertainable outside of the plan if the manner in which the
11facts will operate upon the terms of the plan is set forth in
12the plan. Such facts may include, without limitation, actions or
13events within the control of or determinations made by a party
14to the plan or a representative of a party to the plan.
15§ 8547. Certificate of merger or consolidation.
16(a) General rule.--Upon the adoption of the plan of merger
17or consolidation by the limited partnerships desiring to merge
18or consolidate, as provided in this subchapter, a certificate of
19merger or a certificate of consolidation, as the case may be,
20shall be executed by each limited partnership and shall, subject
21to section 109 (relating to name of commercial registered office
22provider in lieu of registered address), set forth:
23(1) The name and the location of the registered office,
24including street and number, if any, of the domestic
25surviving or new limited partnership or, in the case of a
26foreign surviving or new limited partnership, the name of the
27limited partnership and its jurisdiction of organization,
28together with either of the following:
29(i) If a qualified foreign limited partnership, the
30address, including street and number, if any, of its
1registered office in this Commonwealth.
2(ii) If a nonqualified foreign limited partnership,
3the address, including street and number, if any, of its
4principal office under the laws of the jurisdiction in
5which it is organized.
6(2) The name and address, including street and number,
7if any, of the registered office of each other domestic
8limited partnership and qualified foreign limited partnership
9that is a party to the plan.
10(3) If the plan is to be effective on a specified date,
11the hour, if any, and the month, day and year of the
12effective date.
13(4) The manner in which the plan was adopted by each
14domestic limited partnership and, if one or more foreign
15limited partnerships are parties to the plan, the fact that
16the plan was authorized, adopted or approved, as the case may
17be, by each of the foreign limited partnerships in accordance
18with the laws of the jurisdiction in which it is organized.
19(5) Except as provided in subsection (b), the plan of
20merger or consolidation.
21(b) Omission of certain provisions of plan of merger or
22consolidation.--A certificate of merger or consolidation may
23omit all provisions of the plan of merger or consolidation
24except provisions, if any, that are intended to amend or
25constitute the operative provisions of the certificate of
26limited partnership of a limited partnership as in effect
27subsequent to the effective date of the plan, if the certificate
28of merger or consolidation states that the full text of the plan
29is on file at the principal place of business of the surviving
30or new limited partnership and states the address thereof. A
1limited partnership that takes advantage of this subsection
2shall furnish a copy of the full text of the plan, on request
3and without cost, to any partner of any limited partnership that
4was a party to the plan and, unless all parties to the plan had
5fewer than 30 partners each, on request and at cost to any other
6person.
7(c) Filing of certificate of merger or consolidation.--The
8certificate of merger or certificate of consolidation, as the
9case may be, and the certificates or statement, if any, required
10by section 139 (relating to tax clearance of certain fundamental
11transactions) shall be filed in the department.
12(d) Cross references.--See sections 134 (relating to
13docketing statement) and 8514 (relating to execution of
14certificates).
15§ 8548. Effective date of merger or consolidation.
16Upon the filing of the certificate of merger or the
17certificate of consolidation in the Department of State or upon
18the effective date specified in the plan of merger or
19consolidation, whichever is later, the merger or consolidation
20shall be effective. The merger or consolidation of one or more
21domestic limited partnerships into a foreign limited partnership
22shall be effective according to the provisions of law of the
23jurisdiction in which the foreign limited partnership is
24organized, but not until a certificate of merger or certificate
25of consolidation has been adopted and filed, as provided in this
26subchapter.
27§ 8549. Effect of merger or consolidation.
28(a) Single surviving or new limited partnership.--Upon the
29merger or consolidation becoming effective, the several limited
30partnerships parties to the plan of merger or consolidation
1shall be a single limited partnership which, in the case of a
2merger, shall be the limited partnership designated in the plan
3of merger as the surviving limited partnership and, in the case
4of a consolidation, shall be the new limited partnership
5provided for in the plan of consolidation. The separate
6existence of all limited partnerships parties to the plan of
7merger or consolidation shall cease, except that of the
8surviving limited partnership, in the case of a merger.
9(b) Property rights.--All the property, real, personal and
10mixed, of each of the limited partnerships parties to the plan
11of merger or consolidation, and all debts due on whatever
12account to any of them, as well as all other things and causes
13of action belonging to any of them, shall be deemed to be vested
14in and shall belong to the surviving or new limited partnership,
15as the case may be, without further action, and the title to any
16real estate, or any interest therein, vested in any of the
17limited partnerships shall not revert or be in any way impaired
18by reason of the merger or consolidation. The surviving or new
19limited partnership shall thenceforth be responsible for all the
20liabilities of each of the limited partnerships so merged or
21consolidated. Liens upon the property of the merging or
22consolidating limited partnerships shall not be impaired by the
23merger or consolidation, and any claim existing or action or
24proceeding pending by or against any of the limited partnerships
25may be prosecuted to judgment as if the merger or consolidation
26had not taken place or the surviving or new limited partnership
27may be proceeded against or substituted in its place.
28(c) Taxes.--Any taxes, interest, penalties and public
29accounts of the Commonwealth claimed against any of the merging
30or consolidating limited partnerships that are settled, assessed
1or determined prior to or after the merger or consolidation
2shall be the liability of the surviving or new limited
3partnership and, together with interest thereon, shall be a lien
4against the property, both real and personal, of the surviving
5or new limited partnership.
6(d) Certificate of limited partnership.--In the case of a
7merger, the certificate of limited partnership of the surviving
8domestic limited partnership, if any, shall be deemed to be
9amended to the extent, if any, that changes in its certificate
10of limited partnership are stated in the plan of merger. In the
11case of a consolidation into a domestic limited partnership, the
12statements that are set forth in the plan of consolidation, or
13certificate of limited partnership set forth therein, shall be
14deemed to be the certificate of limited partnership of the new
15limited partnership.]
16Section 52. Section 8571(c) of Title 15 is amended to read:
17§ 8571. Nonjudicial dissolution.
18* * *
19[(c) Dissolution by domestication.--Whenever a domestic
20limited partnership has domesticated itself under the laws of
21another jurisdiction by action similar to that provided by
22section 8590 (relating to domestication) and has authorized that
23action in the manner required by this subchapter for the
24approval of a proposal that the partnership dissolve
25voluntarily, the partnership may surrender its certificate of
26limited partnership under the laws of this Commonwealth by
27filing in the department a certificate of cancellation under
28section 8513 (relating to cancellation of certificate). If the
29partnership, as domesticated in the other jurisdiction,
30registers to do business in this Commonwealth either prior to or
1simultaneously with the filing of the certificate of
2cancellation under this subsection, the partnership shall not be
3required to file with the certificate of cancellation the tax
4clearance certificates that would otherwise be required by
5section 139 (relating to tax clearance of certain fundamental
6transactions).]
7* * *
8Section 53. Subchapters J and K of Chapter 85 of Title 15
9are repealed:
10[SUBCHAPTER J
11DIVISION
12Sec.
138576. Division authorized.
148577. Proposal and adoption of plan of division.
158578. Division without approval of limited partners.
168579. Certificate of division.
178580. Effect of division.
18§ 8576. Division authorized.
19(a) Division of domestic limited partnership.--Any domestic
20limited partnership may, in the manner provided in this
21subchapter, be divided into two or more domestic limited
22partnerships organized or to be organized under this chapter or
23into one or more domestic limited partnerships and one or more
24foreign limited partnerships to be organized under the laws of
25another jurisdiction or jurisdictions or into two or more
26foreign limited partnerships if the laws of the other
27jurisdictions authorize the division.
28(b) Division of foreign limited partnership.--Any foreign
29limited partnership may, in the manner provided in this
30subchapter, be divided into one or more domestic limited
1partnerships to be organized under this chapter and one or more
2foreign limited partnerships organized or to be organized under
3the laws of another jurisdiction or jurisdictions or into two or
4more domestic limited partnerships if the foreign limited
5partnership is authorized under the laws of the jurisdiction
6under which it is organized to effect a division.
7(c) Surviving and new limited partnerships.--The limited
8partnership effecting a division, if it survives the division,
9is designated in this subchapter as the surviving limited
10partnership. All limited partnerships originally organized by a
11division are designated in this subchapter as new limited
12partnerships. The surviving limited partnership, if any, and the
13new limited partnership or partnerships are collectively
14designated in this subchapter as the resulting limited
15partnerships.
16§ 8577. Proposal and adoption of plan of division.
17(a) Preparation of plan.--A plan of division shall be
18prepared, setting forth:
19(1) The terms and conditions of the division, including
20the manner and basis of:
21(i) The reclassification of the partnership
22interests in the surviving limited partnership, if there
23be one, and, if any of the partnership interests in the
24dividing limited partnership are not to be converted
25solely into partnership interests or other securities or
26obligations of one or more of the resulting limited
27partnerships, the partnership interests or other
28securities or obligations of any other person or cash,
29property or rights that the holders of the partnership
30interests are to receive in exchange for or upon
1conversion of the partnership interests and the surrender
2of any certificates evidencing them, which securities or
3obligations, if any, of any other person or cash,
4property or rights may be in addition to or in lieu of
5partnership interests or other securities or obligations
6of one or more of the resulting limited partnerships.
7(ii) The disposition of the partnership interests
8and other securities or obligations, if any, of the new
9limited partnership or partnerships resulting from the
10division.
11(2) A statement that the dividing limited partnership
12will or will not survive the division.
13(3) Any changes desired to be made in the certificate of
14limited partnership of the surviving limited partnership, if
15there be one, including a restatement of the certificate.
16(4) The certificates of limited partnership required by
17subsection (c).
18(5) Such other provisions as are deemed desirable.
19(b) Reference to outside facts.--Any of the terms of the
20plan may be made dependent upon facts ascertainable outside of
21the plan if the manner in which the facts will operate upon the
22terms of the plan is set forth in the plan. Such facts may
23include, without limitation, actions or events within the
24control of or determinations made by the dividing limited
25partnership or a representative of the dividing limited
26partnership.
27(c) Certificates of limited partnership of new limited
28partnerships.--There shall be included in or annexed to the plan
29of division:
30(1) Certificates of limited partnership, which shall
1contain all of the statements required by this chapter to be
2set forth in a restated certificate of limited partnership
3for each of the new domestic limited partnerships, if any,
4resulting from the division.
5(2) Certificates of limited partnership or other
6organizational documents for each of the new foreign limited
7partnerships, if any, resulting from the division.
8(d) Proposal and adoption.--Except as otherwise provided in
9section 8578 (relating to division without approval of limited
10partners), the plan of division shall be proposed and adopted
11and may be amended after its adoption and termination by a
12domestic limited partnership in the manner provided for the
13proposal, adoption, amendment and termination of a plan of
14merger in Subchapter F (relating to merger and consolidation),
15except section 8546(g) (relating to approval of merger or
16consolidation) or, if the dividing limited partnership is a
17foreign limited partnership, in accordance with the laws of the
18jurisdiction in which it is organized. There shall be included
19in or enclosed with the notice of the meeting of limited
20partners to act on the plan, a copy or a summary of the plan.
21(f) Rights of holders of indebtedness.--If any such debt
22securities, notes, similar evidences of indebtedness, indentures
23or other contracts were issued, incurred or executed by the
24dividing limited partnership before August 21, 2001, and have
25not been amended subsequent to that date, the liability of the
26dividing limited partnership thereunder shall not be affected by
27the division nor shall the rights of the obligees thereunder be
28impaired by the division, and each of the resulting limited
29partnerships may be proceeded against or substituted in place of
30the dividing limited partnership as joint and several obligors
1on such liability, regardless of any provision of the plan of
2division apportioning the liabilities of the dividing limited
3partnership.
4(g) Special requirements.--If any provision of the
5certificate of limited partnership or partnership agreement of a
6dividing domestic limited partnership adopted before February 5,
71995, requires for the proposal or adoption of a plan of merger
8or consolidation a specific number or percentage of votes of
9general or limited partners or other special procedures, the
10plan of division shall not be proposed or adopted by the general
11or limited partners without that number or percentage of votes
12or compliance with the other special procedures.
13§ 8578. Division without approval of limited partners.
14Unless otherwise restricted by its partnership agreement, a
15plan of division that does not alter the state of organization
16of a limited partnership nor amend in any respect the provisions
17of its certificate of limited partnership or partnership
18agreement (except amendments that may be made without action by
19the limited partners) shall not require the approval of the
20limited partners of the limited partnership if:
21(1) the dividing limited partnership survives the
22division and all the partnership interests and other
23securities and obligations, if any, of all new limited
24partnerships resulting from the plan are owned solely by the
25surviving limited partnership; or
26(2) the transfers of assets effected by the division, if
27effected by means of a sale, lease, exchange or other
28disposition, would not require the approval of the limited
29partners.
30§ 8579. Certificate of division.
1(a) Contents.--Upon the adoption of a plan of division by
2the limited partnership desiring to divide, as provided in this
3subchapter, a certificate of division shall be executed by the
4limited partnership and shall, subject to section 109 (relating
5to name of commercial registered office provider in lieu of
6registered address), set forth:
7(1) The name and the location of the registered office,
8including street and number, if any, of the dividing domestic
9limited partnership or, in the case of a dividing foreign
10limited partnership, the name of the limited partnership and
11the jurisdiction in which it is organized, together with
12either:
13(i) If a qualified foreign limited partnership, the
14address, including street and number, if any, of its
15registered office in this Commonwealth.
16(ii) If a nonqualified foreign limited partnership,
17the address, including street and number, if any, of its
18principal office under the laws of that jurisdiction.
19(2) The statute under which the dividing limited
20partnership was organized and the date of organization.
21(3) A statement that the dividing limited partnership
22will or will not survive the division.
23(4) The name and the address, including street and
24number, if any, of the registered office of each new domestic
25limited partnership or qualified foreign limited partnership
26resulting from the division.
27(5) If the plan is to be effective on a specific date,
28the hour, if any, and the month, day and year of the
29effective date.
30(6) The manner in which the plan was adopted by the
1limited partnership.
2(7) The plan of division.
3(b) Filing.--The certificate of division and the
4certificates or statement, if any, required by section 139
5(relating to tax clearance of certain fundamental transactions)
6shall be filed in the Department of State.
7(c) Effective date of certificate of division.--Upon the
8filing of a certificate of division in the Department of State
9or upon the effective date specified in the plan of division,
10whichever is later, the division shall become effective. The
11division of a domestic limited partnership into one or more
12foreign limited partnerships or the division of a foreign
13limited partnership shall be effective according to the laws of
14the jurisdictions where the foreign limited partnerships are or
15are to be organized, but not until a certificate of division has
16been adopted and filed as provided in this subchapter.
17(d) Cross references.--See sections 134 (relating to
18docketing statement), 135 (relating to requirements to be met by
19filed documents) and 8514 (relating to execution of
20certificates).
21§ 8580. Effect of division.
22(a) Multiple resulting limited partnerships.--Upon the
23division becoming effective, the dividing limited partnership
24shall be subdivided into the distinct and independent resulting
25limited partnerships named in the plan of division, and, if the
26dividing limited partnership is not to survive the division, the
27existence of the dividing limited partnership shall cease. The
28resulting limited partnerships, if they are domestic limited
29partnerships, shall not thereby acquire authority to engage in
30any business or exercise any right that a limited partnership
1may not be organized under this chapter to engage in or
2exercise. Any resulting foreign limited partnership that is
3stated in the certificate of division to be a qualified foreign
4limited partnership shall be a qualified foreign limited
5partnership under Subchapter K (relating to foreign limited
6partnerships), and the certificate of division shall be deemed
7to be the application for registration as a foreign limited
8partnership of the limited partnership.
9(b) Property rights; allocations of assets and
10liabilities.--
11(1) (i) All the property, real, personal and mixed, of
12the dividing limited partnership, and all debts due on
13whatever account to it, including subscriptions for
14partnership interests or other causes of action belonging
15to it, shall, except as otherwise provided in paragraph
16(2), to the extent allocations of assets are contemplated
17by the plan of division, be deemed without further action
18to be allocated to and vested in the resulting limited
19partnerships on such a manner and basis and with such
20effect as is specified in the plan, or per capita among
21the resulting limited partnerships, as tenants in common,
22if no specification is made in the plan, and the title to
23any real estate or interest therein vested in any of the
24limited partnerships shall not revert or be in any way
25impaired by reason of the division.
26(ii) Upon the division becoming effective, the
27resulting limited partnerships shall each thenceforth be
28responsible as separate and distinct limited partnerships
29only for such liabilities as each limited partnership may
30undertake or incur in its own name but shall be liable
1for the liabilities of the dividing limited partnership
2in the manner and on the basis provided in subparagraphs
3(iv) and (v).
4(iii) Liens upon the property of the dividing
5limited partnership shall not be impaired by the
6division.
7(iv) To the extent allocations of liabilities are
8contemplated by the plan of division, the liabilities of
9the dividing limited partnership shall be deemed without
10further action to be allocated to and become the
11liabilities of the resulting limited partnerships on such
12a manner and basis and with such effect as is specified
13in the plan; and one or more but less than all of the
14resulting limited partnerships shall be free of the
15liabilities of the dividing limited partnership to the
16extent, if any, specified in the plan if in either case:
17(A) no fraud of partners or violation of law
18shall be effected thereby; and
19(B) the plan does not constitute a fraudulent
20transfer under 12 Pa.C.S. Ch. 51 (relating to
21fraudulent transfers).
22(v) If the conditions in subparagraph (iv) for
23freeing one or more of the resulting limited partnerships
24from the liabilities of the dividing limited partnership,
25or for allocating some or all of the liabilities of the
26dividing limited partnership, are not satisfied, the
27liabilities of the dividing limited partnership as to
28which those conditions are not satisfied shall not be
29affected by the division nor shall the rights of
30creditors thereunder or of any person dealing with the
1limited partnership be impaired by the division, and any
2claim existing or action or proceeding pending by or
3against the limited partnership with respect to those
4liabilities may be prosecuted to judgment as if the
5division had not taken place, or the resulting limited
6partnerships may be proceeded against or substituted in
7place of the dividing limited partnership as joint and
8several obligors on those liabilities, regardless of any
9provision of the plan of division apportioning the
10liabilities of the dividing limited partnership.
11(vi) The conditions in subparagraph (iv) for freeing
12one or more of the resulting limited partnerships from
13the liabilities of the dividing limited partnership and
14for allocating some or all of the liabilities of the
15dividing limited partnership shall be conclusively deemed
16to have been satisfied if the plan of division has been
17approved by the Pennsylvania Public Utility Commission in
18a final order issued after August 21, 2001, that has
19become not subject to further appeal.
20(2) (i) The allocation of any fee or freehold interest
21or leasehold having a remaining term of 30 years or more
22in any tract or parcel of real property situate in this
23Commonwealth owned by a dividing limited partnership
24(including property owned by a foreign limited
25partnership dividing solely under the law of another
26jurisdiction) to a new limited partnership resulting from
27the division shall not be effective until one of the
28following documents is filed in the office for the
29recording of deeds of the county, or each of them, in
30which the tract or parcel is situated:
1(A) A deed, lease or other instrument of
2confirmation describing the tract or parcel.
3(B) A duly executed duplicate original copy of
4the certificate of division.
5(C) A copy of the certificate of division
6certified by the Department of State.
7(D) A declaration of acquisition setting forth
8the value of real estate holdings in the county of
9the limited partnership as an acquired company.
10(ii) The provisions of 75 Pa.C.S. § 1114 (relating
11to transfer of vehicle by operation of law) shall not be
12applicable to an allocation of ownership of any motor
13vehicle, trailer or semitrailer to a new limited
14partnership under this section or under a similar law of
15any other jurisdiction, but any such allocation shall be
16effective only upon compliance with the requirements of
1775 Pa.C.S. § 1116 (relating to issuance of new
18certificate following transfer).
19(3) It shall not be necessary for a plan of division to
20list each individual asset or liability of the dividing
21limited partnership to be allocated to a new limited
22partnership so long as those assets and liabilities are
23described in a reasonable and customary manner.
24(4) Each new limited partnership shall hold any assets
25and liabilities allocated to it as the successor to the
26dividing limited partnership, and those assets and
27liabilities shall not be deemed to have been assigned to the
28new limited partnership in any manner, whether directly or
29indirectly or by operation of law.
30(c) Taxes.--Any taxes, interest, penalties and public
1accounts of the Commonwealth claimed against the dividing
2limited partnership that are settled, assessed or determined
3prior to or after the division shall be the liability of any of
4the resulting limited partnerships and, together with interest
5thereon, shall be a lien against the franchises and property,
6both real and personal, of all the limited partnerships. Upon
7the application of the dividing limited partnership, the
8Department of Revenue, with the concurrence of the Office of
9Employment Security of the Department of Labor and Industry,
10shall release one or more, but less than all, of the resulting
11limited partnerships from liability and liens for all taxes,
12interest, penalties and public accounts of the dividing limited
13partnership due the Commonwealth for periods prior to the
14effective date of the division if those departments are
15satisfied that the public revenues will be adequately secured.
16(d) Certificate of limited partnership of surviving limited
17partnership.--The certificate of limited partnership of the
18surviving limited partnership, if there be one, shall be deemed
19to be amended to the extent, if any, that changes in its
20certificate of limited partnership are stated in the plan of
21division.
22(e) Certificates of limited partnership of new limited
23partnerships.--The statements that are set forth in the plan of
24division with respect to each new domestic limited partnership
25and that are required or permitted to be set forth in a restated
26certificate of limited partnership of limited partnerships
27organized under this chapter, or the certificate of limited
28partnership of each new limited partnership set forth therein,
29shall be deemed to be the certificate of limited partnership of
30each new limited partnership.
1(f) Disposition of partnership interests.--Unless otherwise
2provided in the plan, the partnership interests and other
3securities or obligations, if any, of each new limited
4partnership resulting from the division shall be distributable
5to:
6(1) the surviving limited partnership if the dividing
7limited partnership survives the division; or
8(2) the partners of the dividing limited partnership in
9the proportions in which the partners share in distributions,
10in any other case.
11(g) Conflict of laws.--It is the intent of the General
12Assembly that:
13(1) The effect of a division of a domestic limited
14partnership shall be governed solely by the laws of this
15Commonwealth and any other jurisdiction under the laws of
16which any of the resulting limited partnerships is organized.
17(2) The effect of a division on the assets and
18liabilities of the dividing limited partnership shall be
19governed solely by the laws of this Commonwealth and any
20other jurisdiction under the laws of which any of the
21resulting limited partnerships is organized.
22(3) The validity of any allocations of assets or
23liabilities by a plan of division of a domestic limited
24partnership, regardless of whether or not any of the new
25limited partnerships is a foreign limited partnership, shall
26be governed solely by the laws of this Commonwealth.
27(4) In addition to the express provisions of this
28subsection, this subchapter shall otherwise generally be
29granted the protection of full faith and credit under the
30Constitution of the United States.
1SUBCHAPTER K
2FOREIGN LIMITED PARTNERSHIPS
3Sec.
48581. Governing law.
58582. Registration.
68583. Effect of filing.
78584. Name.
88585. Changes and amendments.
98586. Cancellation of registration.
108587. Doing business without registration.
118588. Action by Attorney General.
128589. General powers and duties of qualified foreign limited
13partnerships.
148590. Domestication.
15§ 8581. Governing law.
16Subject to the Constitution of Pennsylvania:
17(1) The laws of the jurisdiction under which a foreign
18limited partnership is organized govern its organization and
19internal affairs and the liability of its limited partners.
20(2) A foreign limited partnership may not be denied
21registration by reason of any difference between those laws
22and the laws of this Commonwealth.
23§ 8582. Registration.
24(a) General rule.--Before doing business in this
25Commonwealth, a foreign limited partnership shall register under
26this subchapter. In order to register, a foreign limited
27partnership shall execute and file in the Department of State an
28application for registration as a foreign limited partnership
29setting forth:
30(1) The name of the foreign limited partnership and, if
1different, the name under which it proposes to register and
2do business in this Commonwealth.
3(2) The jurisdiction and date of its formation.
4(3) Subject to section 109 (relating to name of
5commercial registered office provider in lieu of registered
6address), the address, including street and number, if any,
7of its registered office.
8(4) The address of the office required to be maintained
9in the jurisdiction of its organization by the laws of that
10jurisdiction or, if not so required, of the principal office
11of the foreign limited partnership.
12(5) The name and business address of each general
13partner.
14(6) The address of the office at which is kept a list of
15the names and addresses of the limited partners and their
16capital contributions, together with an undertaking by the
17foreign limited partnership to keep those records until the
18registration of the foreign limited partnership in this
19Commonwealth is canceled or withdrawn.
20(b) Exceptions.--None of the activities described in section
214122 (relating to excluded activities) shall be considered doing
22business in this Commonwealth for the purposes of this
23subchapter.
24(c) Cross references.--See sections 134 (relating to
25docketing statement) and 8514 (relating to execution of
26certificates).
27§ 8583. Effect of filing.
28Upon the filing of the application for registration as a
29foreign limited partnership, the partnership shall be authorized
30to do business in this Commonwealth.
1§ 8584. Name.
2(a) General rule.--A foreign limited partnership may
3register with the Department of State under any name (whether or
4not it is the name under which it is registered in its
5jurisdiction of organization) that could be used by a domestic
6limited partnership.
7(b) Cross reference.--See section 8505 (relating to name).
8§ 8585. Changes and amendments.
9(a) General rule.--If any arrangements or other facts
10described in the application for registration of a foreign
11limited partnership have changed, making the application
12inaccurate in any material respect, the foreign limited
13partnership shall promptly execute and file in the Department of
14State a certificate of amendment of registration setting forth:
15(1) The name under which the foreign limited partnership
16is registered to do business in this Commonwealth.
17(2) Subject to section 109 (relating to name of
18commercial registered office provider in lieu of registered
19address), the address, including street and number, if any,
20of its registered office in this Commonwealth.
21(3) The arrangements or other facts that have changed.
22(b) Effect of filing.--The application for registration as a
23foreign limited partnership shall be amended upon filing of the
24certificate of amendment of registration in the department.
25(c) Cross references.--See sections 134 (relating to
26docketing statement), 138 (relating to statement of correction)
27and 8514 (relating to execution of certificates).
28§ 8586. Cancellation of registration.
29(a) General rule.--A qualified foreign limited partnership
30may cancel its registration by executing and filing in the
1Department of State a certificate of cancellation of
2registration setting forth:
3(1) The name under which the foreign limited partnership
4is registered to do business in this Commonwealth.
5(2) Subject to section 109 (relating to name of
6commercial registered office provider in lieu of registered
7address), the address, including street and number, if any,
8of its last registered office in this Commonwealth.
9(3) The name of the jurisdiction under the laws of which
10it is organized.
11(4) The date on which it registered to do business in
12this Commonwealth.
13(5) A statement that it withdraws from doing business in
14this Commonwealth.
15(6) A statement that notice of its intention to withdraw
16from doing business in this Commonwealth was mailed by
17certified or registered mail to each municipal corporation in
18which the registered office or principal place of business of
19the foreign limited partnership in this Commonwealth is
20located.
21(7) The post office address, including street and
22number, if any, to which process may be sent in an action
23upon any liability incurred before the filing of the
24certificate of cancellation of registration.
25(b) Filing.--The certificate of cancellation of registration
26and the certificates or statement required by section 139
27(relating to tax clearance of certain fundamental transactions)
28shall be filed in the department.
29(c) Effect of filing.--Upon the filing of the certificate of
30cancellation of registration, the authority of the foreign
1limited partnership to do business in this Commonwealth shall
2cease. The termination of authority shall not affect any action
3pending at the time thereof or affect any right of action
4arising with respect to the foreign limited partnership before
5the filing of the certificate of cancellation of registration.
6Process against the foreign limited partnership in an action
7upon any liability incurred before the filing of the certificate
8of cancellation of registration may be served as provided in 42
9Pa.C.S. Ch. 53 (relating to bases of jurisdiction and interstate
10and international procedure) or as otherwise provided or
11prescribed by law.
12(d) Cross references.--See sections 134 (relating to
13docketing statement) and 8514 (relating to execution of
14certificates).
15§ 8587. Doing business without registration.
16(a) Maintenance of actions or proceedings prohibited.--A
17nonqualified foreign limited partnership doing business in this
18Commonwealth may not maintain any action or proceeding in any
19court of this Commonwealth until it has registered under this
20subchapter, nor, except as provided in subsection (b), shall any
21action or proceeding be maintained in any court of this
22Commonwealth on any right, claim or demand arising out of the
23doing of business by the foreign limited partnership in this
24Commonwealth by any successor, assignee or acquiror of all or
25substantially all of the assets of the foreign limited
26partnership that is a foreign corporation for profit or not-for-
27profit or a foreign limited partnership until such foreign
28corporation or foreign limited partnership has been authorized
29to do business in this Commonwealth.
30(b) Contracts, property and defense of actions unaffected.--
1The failure of a foreign limited partnership to register under
2this subchapter shall not impair the validity of any contract or
3act of the foreign limited partnership, shall not prevent the
4foreign limited partnership from defending any action in any
5court of this Commonwealth and shall not render escheatable any
6of its real or personal property.
7(c) Liability of limited partner.--A limited partner of a
8foreign limited partnership is not liable as a general partner
9of the foreign limited partnership solely by reason of the
10foreign limited partnership having done business in this
11Commonwealth without registration under this subchapter.
12(d) Acquisition of real and personal property.--Every
13nonqualified foreign limited partnership may acquire, hold,
14mortgage, lease and transfer real and personal property in this
15Commonwealth in the same manner and subject to the same
16limitations as a qualified foreign limited partnership.
17(e) Duties.--Except as provided in subsection (a), a
18nonqualified foreign limited partnership doing business in this
19Commonwealth shall be subject to the same liabilities,
20restrictions, duties and penalties now or hereafter imposed upon
21a qualified foreign limited partnership.
22§ 8588. Action by Attorney General.
23The Attorney General may bring an action to restrain a
24foreign limited partnership from doing business in this
25Commonwealth in violation of this subchapter.
26§ 8589. General powers and duties of qualified foreign limited
27partnerships.
28(a) General rule.--A qualified foreign limited partnership,
29so long as its registration under this subchapter is not
30canceled or revoked, shall enjoy the same rights and privileges
1as a domestic limited partnership, but no more, and, except as
2in this part otherwise provided, shall be subject to the same
3liabilities, restrictions, duties and penalties now in force or
4hereafter imposed upon domestic limited partnerships, to the
5same extent as if it had been formed under this chapter.
6(b) Agricultural lands.--Interests in agricultural land
7shall be subject to the restrictions of, and escheatable as
8provided by, the act of April 6, 1980 (P.L.102, No.39), referred
9to as the Agricultural Land Acquisition by Aliens Law.
10§ 8590. Domestication.
11(a) General rule.--Any qualified foreign limited partnership
12may become a domestic limited partnership by filing in the
13Department of State a certificate of domestication. The
14certificate of domestication, upon being filed in the
15department, shall constitute the certificate of limited
16partnership of the domesticated foreign limited partnership, and
17it shall thereafter continue as a limited partnership which
18shall be a domestic limited partnership subject to this chapter.
19(b) Certificate of domestication.--The certificate of
20domestication shall be executed by the limited partnership and
21shall set forth in the English language:
22(1) The name of the limited partnership. If the name is
23in a foreign language, it shall be set forth in Roman letters
24or characters or Arabic or Roman numerals. If the name is one
25that is rendered unavailable for use by any provision of
26section 8505 (relating to name), the limited partnership
27shall adopt, in accordance with any procedures for changing
28the name of the limited partnership that are applicable prior
29to the domestication of the limited partnership, and shall
30set forth in the certificate of domestication an available
1name.
2(2) Subject to section 109 (relating to name of
3commercial registered office provider in lieu of registered
4address), the address, including street and number, if any,
5of its registered office in this Commonwealth.
6(3) A statement that upon domestication the limited
7partnership will be subject to the domestic limited
8partnership provisions of the Pennsylvania Revised Uniform
9Limited Partnership Act and, if desired, a brief statement of
10the purpose or purposes for which it is to be domesticated,
11which shall be a purpose or purposes for which a domestic
12limited partnership may be organized under this chapter and
13which may consist of or include a statement that the limited
14partnership shall have unlimited power to engage in and to do
15any lawful act concerning any or all lawful business for
16which limited partnerships may be organized under the
17Pennsylvania Revised Uniform Limited Partnership Act.
18(4) Any desired provisions relating to the manner and
19basis of reclassifying the partnership interests in the
20limited partnership.
21(5) A statement that the filing of the certificate of
22domestication and, if desired, the renunciation of the
23original certificate of limited partnership of the limited
24partnership has been authorized (unless its certificate of
25limited partnership or other organic documents require a
26greater vote) by a majority of the votes cast by all partners
27entitled to vote thereon and, if any class of partners is
28entitled to vote thereon as a class, a majority of the votes
29cast in each class vote.
30(6) Any other provisions authorized by this chapter to
1be set forth in an original certificate of limited
2partnership.
3See sections 134 (relating to docketing statement), 135
4(relating to requirements to be met by filed documents) and 8514
5(relating to execution of certificates).
6(c) Effect of domestication.--
7(1) As a domestic limited partnership, the domesticated
8limited partnership shall no longer be a foreign limited
9partnership for the purposes of this chapter and shall
10instead be a domestic limited partnership with all the powers
11and privileges and all the duties and limitations granted and
12imposed upon domestic limited partnerships. In all other
13respects, the domesticated limited partnership shall be
14deemed to be the same limited partnership as it was prior to
15the domestication without any change in or effect on its
16existence. Without limiting the generality of the previous
17sentence, the domestication shall not be deemed to have
18dissolved the limited partnership or to have affected in any
19way:
20(i) the right and title of the limited partnership
21in and to its assets, property, franchises, estates and
22choses in action;
23(ii) the liability of the limited partnership for
24its debts, obligations, penalties and public accounts due
25the Commonwealth;
26(iii) any liens or other encumbrances on the
27property or assets of the limited partnership; or
28(iv) any contract, license or other agreement to
29which the limited partnership is a party or under which
30it has any rights or obligations.
1(2) The partnership interests in the domesticated
2limited partnership shall be unaffected by the domestication
3except to the extent, if any, reclassified in the certificate
4of domestication.]
5Section 54. The definitions of "certificate of
6organization," "foreign limited liability company" and
7"qualified foreign limited liability company" in section 8903(a)
8of Title 15 are amended to read:
9§ 8903. Definitions and index of definitions.
10(a) Definitions.--The following words and phrases when used
11in this chapter shall have the meanings given to them in this
12section unless the context clearly indicates otherwise:
13"Certificate of organization." The certificate of
14organization referred to in section 8913 (relating to
15certificate of organization) and the certificate of organization
16as amended. The term includes any other statements or
17certificates permitted or required to be filed in the Department
18of State by sections 108 (relating to change in location or
19status of registered office provided by agent) and 138 (relating
20to statement of correction), Chapter 3 (relating to entity
21transactions) or this part. If an amendment of the certificate
22of organization or a [certificate of merger or division made in
23the manner permitted by this chapter] statement filed under
24Chapter 3 restates the certificate of organization in its
25entirety [or if there is a certificate of consolidation or
26domestication], thenceforth the certificate of organization
27shall not include any prior documents, and any certificate
28issued by the Department of State with respect thereto shall so
29state.
30* * *
1"Foreign limited liability company." An association
2organized under the laws of any jurisdiction other than this
3Commonwealth, whether or not required to register under
4[Subchapter J (relating to foreign companies)] Chapter 4
5(relating to foreign associations), which would be a limited
6liability company if organized under the laws of this
7Commonwealth.
8* * *
9"Qualified foreign limited liability company." A foreign
10limited liability company that is registered under [Subchapter J
11(relating to foreign companies) to do business in this
12Commonwealth] Chapter 4 (relating to foreign associations).
13* * *
14Section 55. Sections 8905 and 8908 and Subchapters G and H
15of Chapter 89 and section 8978 and Subchapter J of Chapter 89 of
16Title 15 are repealed:
17[§ 8905. Name.
18(a) General rule.--The name of each limited liability
19company as set forth in its certificate of organization shall:
20(1) Be expressed in Roman letters or characters or
21Arabic or Roman numerals.
22(2) Not be one rendered unavailable for use by a
23corporation by any provision of section 1303(b) and (c)
24(relating to corporate name).
25(3) Contain the term "company," "limited" or "limited
26liability company" or an abbreviation of one of those terms.
27(b) Reservation of name.--The exclusive right to the use of
28a name for purposes of this chapter may be reserved and
29transferred in the manner provided by section 1305 (relating to
30reservation of corporate name).
1§ 8908. Election of professional association to become limited
2liability company.
3(a) General rule.--This chapter applies to every
4professional association subject to Chapter 93 (relating to
5professional associations) that elects to accept the provisions
6of this chapter in the manner set forth in subsection (b).
7(b) Procedure for election.--A professional association may
8elect to accept this chapter by filing in the Department of
9State a certificate of election of limited liability company
10status which shall be executed by all of the associates of the
11professional association and shall set forth:
12(1) The name of the professional association.
13(2) The name of the county in the office of the
14prothonotary of which the initial articles of association of
15the association were filed.
16(3) A statement that the associates of the professional
17association have elected to accept the provisions of this
18chapter for the government and regulation of the affairs of
19the association.
20(4) The provisions that shall constitute the initial
21certificate of organization of the limited liability company
22resulting from the filing, which may include such amendments
23to the articles of association of the professional
24association as the associates may choose to adopt.
25See sections 134 (relating to docketing statement) and 135
26(relating to requirements to be met by filed documents).
27(c) Date of organization.--This chapter shall become
28applicable to the professional association, and it shall be
29deemed organized as a limited liability company, on the date the
30certificate of election is filed in the department.
1SUBCHAPTER G
2MERGERS AND CONSOLIDATIONS
3Sec.
48956. Merger and consolidation of limited liability companies
5authorized.
68957. Approval of merger or consolidation.
78958. Certificate of merger or consolidation.
88959. Effect of merger or consolidation.
9§ 8956. Merger and consolidation of limited liability companies
10authorized.
11(a) Domestic surviving or new limited liability company.--
12Any two or more domestic limited liability companies, or any two
13or more foreign limited liability companies, or any one or more
14domestic limited liability companies and any one or more foreign
15limited liability companies, may, in the manner provided in this
16subchapter, be merged into one of the domestic limited liability
17companies designated in this subchapter as the surviving limited
18liability company, or consolidated into a new limited liability
19company to be formed under this chapter, if the foreign limited
20liability companies are authorized by the laws of the
21jurisdiction under which they are organized to effect a merger
22or consolidation with a limited liability company of another
23jurisdiction.
24(b) Foreign surviving or new limited liability company.--Any
25one or more domestic limited liability companies and any one or
26more foreign limited liability companies may, in the manner
27provided in this subchapter, be merged into one of the foreign
28limited liability companies designated in this subchapter as the
29surviving limited liability company, or consolidated into a new
30limited liability company to be organized under the laws of the
1jurisdiction under which one of the foreign limited liability
2companies is organized, if the laws of that jurisdiction
3authorize a merger with or consolidation into a limited
4liability company of another jurisdiction.
5(c) Business trusts and other associations.--The provisions
6of this subchapter applicable to domestic and foreign limited
7liability companies shall also be applicable to a merger or
8consolidation to which a domestic limited liability company is a
9party or in which such a company is the resulting entity with or
10into a domestic or foreign corporation, partnership, business
11trust or other association. The surviving or resulting entity in
12such a merger or consolidation may be a corporation,
13partnership, business trust or other association. Except as
14otherwise provided by law in this Commonwealth or any other
15jurisdiction, the powers and duties vested in and imposed upon
16the managers and members in this subchapter shall be exercised
17and performed by the group of persons under the direction of
18whom the business and affairs of the corporation, partnership,
19business trust or other association are managed and the holders
20or owners of shares or other interests in the corporation,
21partnership, business trust or other association, respectively,
22irrespective of the names by which the managing group and the
23holders or owners of shares or other interests are designated.
24The units into which the shares or other interests in the
25corporation, partnership, business trust or other association
26are divided shall be deemed to be membership interests for the
27purposes of applying the provisions of this subchapter to a
28merger or consolidation involving the corporation, partnership,
29business trust or other association.
30§ 8957. Approval of merger or consolidation.
1(a) Preparation of plan of merger or consolidation.--A plan
2of merger or consolidation, as the case may be, shall be
3prepared, setting forth:
4(1) The terms and conditions of the merger or
5consolidation.
6(2) If the surviving or new limited liability company is
7or is to be a domestic limited liability company:
8(i) in the case of a merger, any changes desired to
9be made in the certificate of organization or operating
10agreement, which may include a restatement of either or
11both; or
12(ii) in the case of a consolidation:
13(A) all of the statements required by this
14chapter to be set forth in a restated certificate of
15organization; and
16(B) the written provisions, if any, of the
17operating agreement.
18(3) The manner and basis of converting the membership
19interests of each company into membership interests,
20securities or obligations of the surviving or new company, as
21the case may be, and, if any of the membership interests of
22any of the companies that are parties to the merger or
23consolidation are not to be converted solely into membership
24interests, securities or obligations of the surviving or new
25company, the membership interests, securities or obligations
26of any other person or cash, property or rights that the
27holders of such membership interests are to receive in
28exchange for, or upon conversion of, such membership
29interests, and the surrender of any certificates evidencing
30them, which securities or obligations, if any, of any other
1person or cash, property or rights may be in addition to or
2in lieu of the membership interests, securities or
3obligations of the surviving or new company.
4(4) Such other provisions as are deemed desirable.
5(b) Reference to outside facts.--Any of the terms of the
6plan may be made dependent upon facts ascertainable outside of
7the plan if the manner in which the facts will operate upon the
8terms of the plan is set forth in the plan. Such facts may
9include, without limitation, actions or events within the
10control of or determinations made by a party to the plan or a
11representative of a party to the plan.
12(c) Post-adoption amendment of plan of merger or
13consolidation.--A plan of merger or consolidation may contain a
14provision that the managers, if any, of the constituent
15companies may amend the plan at any time prior to its effective
16date, except that an amendment made subsequent to any adoption
17of the plan by the members of any constituent domestic company
18shall not, without the approval of the members, change:
19(1) The amount or kind of membership interests,
20obligations, cash, property or rights to be received in
21exchange for or on conversion of all or any of the membership
22interests of the constituent domestic company adversely to
23the holders of those membership interests.
24(2) Any provision of the certificate of organization or
25operating agreement of the surviving or new company as it is
26to be in effect immediately following consummation of the
27merger or consolidation except provisions that may be amended
28without the approval of the members.
29(3) Any of the other terms and conditions of the plan if
30the change would adversely affect the holders of any
1membership interests of the constituent domestic company.
2(d) Proposal of merger or consolidation.--Every merger or
3consolidation shall be proposed, in the case of each domestic
4limited liability company that is managed by one or more
5managers, by the adoption by the managers of a resolution
6approving the plan of merger or consolidation and, in any other
7case, in accordance with any applicable procedures specified in
8the operating agreement. Except where the approval of the
9members is unnecessary under this subchapter or the operating
10agreement, the plan shall be submitted to a vote of the members
11entitled to vote thereon at a regular or special meeting of the
12members.
13(e) Party to plan.--An association that approves a plan in
14its capacity as a member or creditor of a merging or
15consolidating company or that furnishes all or a part of the
16consideration contemplated by a plan does not thereby become a
17party to the merger or consolidation for the purposes of this
18subchapter.
19(f) Notice of meeting of members.--Written notice of the
20meeting of members that will act on the proposed plan shall be
21given to each member of record, whether or not entitled to vote
22thereon, of each domestic limited liability company that is a
23party to the merger or consolidation. There shall be included in
24or enclosed with the notice a copy of the proposed plan or a
25summary thereof. The provisions of this subsection may not be
26relaxed by any provision of the certificate of organization or
27operating agreement.
28(g) Adoption of plan by members.--The plan of merger or
29consolidation shall be adopted upon receiving a majority of the
30votes cast by all members, if any, entitled to vote thereon of
1each of the domestic limited liability companies that is a party
2to the merger or consolidation and, if any class of members is
3entitled to vote thereon as a class, a majority of the votes
4cast in each class vote. A proposed plan of merger or
5consolidation shall not be deemed to have been adopted by a
6company that is managed by one or more managers unless it has
7also been approved by the managers, regardless of the fact that
8the managers have directed or suffered the submission of the
9plan to the members for action.
10(h) Adoption by managers.--
11(1) Unless otherwise required by a written provision of
12the operating agreement, a plan of merger or consolidation
13shall not require the approval of the members of a company
14that is managed by one or more managers if:
15(i) the plan, whether or not the company is the
16surviving company, does not alter the status of the
17company as a domestic limited liability company or alter
18in any respect the provisions of its certificate of
19organization or operating agreement, except changes that
20may be made without action by the members; and
21(ii) each membership interest outstanding
22immediately prior to the effective date of the merger or
23consolidation is to continue as or to be converted into,
24except as may be otherwise agreed by the holder thereof,
25an identical membership interest in the surviving or new
26company after the effective date of the merger or
27consolidation.
28(2) If a merger or consolidation is effected pursuant to
29paragraph (1), the plan of merger or consolidation shall be
30deemed adopted by the company when it has been adopted by the
1managers pursuant to subsection (d).
2(i) Termination of plan.--Prior to the time when a merger or
3consolidation becomes effective, the merger or consolidation may
4be terminated pursuant to provisions therefor, if any, set forth
5in the plan. If a certificate of merger or consolidation has
6been filed in the department prior to the termination, a
7certificate of termination executed by each company that is a
8party to the merger or consolidation, unless the plan permits
9termination by less than all of the companies, in which case the
10certificate shall be executed on behalf of the company
11exercising the right to terminate, shall be filed in the
12department. The certificate of termination shall set forth:
13(1) A copy of the certificate of merger or consolidation
14relating to the plan that is terminated.
15(2) A statement that the plan has been terminated in
16accordance with the provisions therefor set forth therein.
17See sections 134 (relating to docketing statement), 135
18(relating to requirements to be met by filed documents), 138
19(relating to statement of correction) and 8907 (relating to
20execution of documents).
21(j) Authorization by foreign limited liability companies.--
22The plan of merger or consolidation shall be authorized, adopted
23or approved by each foreign limited liability company that
24desires to merge or consolidate in accordance with the laws of
25the jurisdiction in which it is organized.
26§ 8958. Certificate of merger or consolidation.
27(a) General rule.--Upon the adoption of the plan of merger
28or consolidation by the limited liability companies desiring to
29merge or consolidate, as provided in this subchapter, a
30certificate of merger or a certificate of consolidation, as the
1case may be, shall be executed by each company and shall,
2subject to section 109 (relating to name of commercial
3registered office provider in lieu of registered address), set
4forth:
5(1) The name and the location of the registered office,
6including street and number, if any, of the domestic
7surviving or new limited liability company or, in the case of
8a foreign surviving or new limited liability company, the
9name of the company and its jurisdiction of organization,
10together with either of the following:
11(i) If a qualified foreign limited liability
12company, the address, including street and number, if
13any, of its registered office in this Commonwealth.
14(ii) If a nonqualified foreign limited liability
15company, the address, including street and number, if
16any, of its principal office under the laws of the
17jurisdiction in which it is organized.
18(2) The name and address, including street and number,
19if any, of the registered office of each other domestic
20limited liability company and qualified foreign limited
21liability company that is a party to the merger or
22consolidation.
23(3) If the plan is to be effective on a specified date,
24the hour, if any, and the month, day and year of the
25effective date.
26(4) The manner in which the plan was adopted by each
27domestic limited liability company and, if one or more
28foreign limited liability companies are parties to the merger
29or consolidation, the fact that the plan was authorized,
30adopted or approved, as the case may be, by each of the
1foreign limited liability companies in accordance with the
2laws of the jurisdiction in which it is organized.
3(5) Except as provided in subsection (b), the plan of
4merger or consolidation.
5(b) Omission of certain provisions of plan of merger or
6consolidation.--A certificate of merger or consolidation may
7omit all provisions of the plan of merger or consolidation
8except provisions, if any, that are intended to amend or
9constitute the operative provisions of the certificate of
10organization of a company as in effect subsequent to the
11effective date of the plan, if the certificate of merger or
12consolidation states that the full text of the plan is on file
13at the principal place of business of the surviving or new
14company and states the address thereof. A company that takes
15advantage of this subsection shall furnish a copy of the full
16text of the plan, on request and without cost, to any member of
17any company that was a party to the plan and, unless all parties
18to the plan had fewer than 30 members each, on request and at
19cost to any other person.
20(c) Filing of certificate of merger or consolidation.--The
21certificate of merger or certificate of consolidation, as the
22case may be, and the certificates or statement, if any, required
23by section 139 (relating to tax clearance of certain fundamental
24transactions) shall be filed in the department.
25(d) Effective date of merger or consolidation.--Upon the
26filing of the certificate of merger or the certificate of
27consolidation in the Department of State or upon the effective
28date specified in the plan of merger or consolidation, whichever
29is later, the merger or consolidation shall be effective. The
30merger or consolidation of one or more domestic limited
1liability companies into a foreign limited liability company
2shall be effective according to the provisions of law of the
3jurisdiction in which the foreign limited liability company is
4organized, but not until a certificate of merger or certificate
5of consolidation has been adopted and filed, as provided in this
6subchapter.
7(e) Cross references.--See sections 134 (relating to
8docketing statement), 135 (relating to requirements to be met by
9filed documents) and 8907 (relating to execution of documents).
10§ 8959. Effect of merger or consolidation.
11(a) Single surviving or new limited liability company.--Upon
12the merger or consolidation becoming effective, the several
13limited liability companies parties to the merger or
14consolidation shall be a single company which, in the case of a
15merger, shall be the company designated in the plan of merger as
16the surviving company and, in the case of a consolidation, shall
17be the new company provided for in the plan of consolidation.
18The separate existence of all companies parties to the merger or
19consolidation shall cease, except that of the surviving company,
20in the case of a merger.
21(b) Property rights.--All the property, real, personal and
22mixed, of each of the companies parties to the merger or
23consolidation and all debts due on whatever account to any of
24them, as well as all other things and causes of action belonging
25to any of them, shall be deemed to be vested in and shall belong
26to the surviving or new company, as the case may be, without
27further action, and the title to any real estate or any interest
28therein vested in any of the companies shall not revert or be in
29any way impaired by reason of the merger or consolidation. The
30surviving or new company shall thenceforth be responsible for
1all the liabilities of each of the companies so merged or
2consolidated. Liens upon the property of the merging or
3consolidating companies shall not be impaired by the merger or
4consolidation, and any claim existing or action or proceeding
5pending by or against any of the companies may be prosecuted to
6judgment as if the merger or consolidation had not taken place
7or the surviving or new company may be proceeded against or
8substituted in its place.
9(c) Taxes.--Any taxes, interest, penalties and public
10accounts of the Commonwealth claimed against any of the merging
11or consolidating companies that are settled, assessed or
12determined prior to or after the merger or consolidation shall
13be the liability of the surviving or new company and, together
14with interest thereon, shall be a lien against the property,
15both real and personal, of the surviving or new company.
16(d) Certificate of organization.--In the case of a merger,
17the certificate of organization of the surviving domestic
18limited liability company, if any, shall be deemed to be amended
19to the extent, if any, that changes in its certificate of
20organization are stated in the plan of merger. In the case of a
21consolidation into a domestic limited liability company, the
22statements that are set forth in the plan of consolidation or
23certificate of organization set forth therein shall be deemed to
24be the certificate of organization of the new limited liability
25company.
26SUBCHAPTER H
27DIVISION
28Sec.
298961. Division authorized.
308962. Proposal and adoption of plan of division.
18963. Division without member approval.
28964. Certificate of division.
38965. Effect of division.
4§ 8961. Division authorized.
5(a) Division of domestic company.--Any domestic limited
6liability company may, in the manner provided in this
7subchapter, be divided into two or more domestic limited
8liability companies organized or to be organized under this
9chapter, or into one or more domestic limited liability
10companies and one or more foreign limited liability companies to
11be organized under the laws of another jurisdiction or
12jurisdictions, or into two or more foreign limited liability
13companies, if the laws of the other jurisdictions authorize the
14division.
15(b) Division of foreign company.--Any foreign limited
16liability company may, in the manner provided in this
17subchapter, be divided into one or more domestic limited
18liability companies to be organized under this chapter and one
19or more foreign limited liability companies organized or to be
20organized under the laws of another jurisdiction or
21jurisdictions, or into two or more domestic limited liability
22companies, if the foreign limited liability company is
23authorized under the laws of the jurisdiction under which it is
24incorporated to effect a division.
25(c) Surviving and new companies.--The company effecting a
26division, if it survives the division, is designated in this
27subchapter as the surviving company. All companies originally
28organized by a division are designated in this subchapter as new
29companies. The surviving company, if any, and the new company or
30companies are collectively designated in this subchapter as the
1resulting companies.
2§ 8962. Proposal and adoption of plan of division.
3(a) Preparation of plan.--A plan of division shall be
4prepared, setting forth:
5(1) The terms and conditions of the division, including
6the manner and basis of:
7(i) The reclassification of the membership interests
8of the surviving company, if there be one, and, if any of
9the membership interests of the dividing company are not
10to be converted solely into membership interests or other
11securities or obligations of one or more of the resulting
12companies, the membership interests or other securities
13or obligations of any other person or cash, property or
14rights that the holders of such membership interests are
15to receive in exchange for or upon conversion of such
16membership interests, and the surrender of any
17certificates evidencing them, which securities or
18obligations, if any, of any other person or cash,
19property or rights may be in addition to or in lieu of
20membership interests or other securities or obligations
21of one or more of the resulting companies.
22(ii) The disposition of the membership interests and
23other securities or obligations, if any, of the new
24company or companies resulting from the division.
25(2) A statement that the dividing company will or will
26not survive the division.
27(3) Any changes desired to be made in the certificate of
28organization of the surviving company, if there be one,
29including a restatement of the certificate.
30(4) The certificates of organization required by
1subsection (c).
2(5) Such other provisions as are deemed desirable.
3(b) Reference to outside facts.--Any of the terms of the
4plan may be made dependent upon facts ascertainable outside of
5the plan if the manner in which the facts will operate upon the
6terms of the plan is set forth in the plan. Such facts may
7include, without limitation, actions or events within the
8control of or determinations made by the dividing limited
9liability company or a representative of the dividing limited
10liability company.
11(c) Certificates of organization of new companies.--There
12shall be included in or annexed to the plan of division:
13(1) Certificates of organization, which shall contain
14all of the statements required by this chapter to be set
15forth in a restated certificate, for each of the new domestic
16limited liability companies, if any, resulting from the
17division.
18(2) Certificates of organization or other organizational
19documents for each of the new foreign limited liability
20companies, if any, resulting from the division.
21(d) Proposal and adoption.--Except as otherwise provided in
22section 8963 (relating to division without member approval), the
23plan of division shall be proposed and adopted and may be
24amended after its adoption and terminated by a domestic limited
25liability company in the manner provided for the proposal,
26adoption, amendment and termination of a plan of merger in
27Subchapter G (relating to mergers and consolidations) or, if the
28dividing company is a foreign limited liability company, in
29accordance with the laws of the jurisdiction in which it is
30organized.
1§ 8963. Division without member approval.
2Unless otherwise required by a written provision of the
3operating agreement, a plan of division that does not alter the
4state of organization of a limited liability company that is
5managed by one or more managers nor amend in any respect the
6provisions of its certificate of organization or operating
7agreement (except amendments which may be made without action by
8the members) shall not require the approval of the members of
9the company if:
10(1) the dividing company has only one class of
11membership interests outstanding and the membership interests
12and other securities, if any, of each company resulting from
13the plan are distributed pro rata to the members of the
14dividing company;
15(2) the dividing company survives the division and all
16the membership interests and other securities and
17obligations, if any, of all new companies resulting from the
18plan are owned solely by the surviving company; or
19(3) the transfers of assets effected by the division, if
20effected by means of a sale, lease, exchange or other
21disposition, would not require the approval of the members.
22§ 8964. Certificate of division.
23(a) Contents.--Upon the adoption of a plan of division by
24the limited liability company desiring to divide, as provided in
25this subchapter, a certificate of division shall be executed by
26the company and shall, subject to section 109 (relating to name
27of commercial registered office provider in lieu of registered
28address), set forth:
29(1) The name and the location of the registered office,
30including street and number, if any, of the dividing domestic
1limited liability company or, in the case of a dividing
2foreign limited liability company, the name of the company
3and the jurisdiction in which it is organized, together with
4either:
5(i) If a qualified foreign limited liability
6company, the address, including street and number, if
7any, of its registered office in this Commonwealth.
8(ii) If a nonqualified foreign limited liability
9company, the address, including street and number, if
10any, of its principal office under the laws of that
11jurisdiction.
12(2) The statute under which the dividing company was
13organized and the date of organization.
14(3) A statement that the dividing company will or will
15not survive the division.
16(4) The name and address, including street and number,
17if any, of the registered office of each new domestic limited
18liability company or qualified foreign limited liability
19company resulting from the division.
20(5) If the plan is to be effective on a specific date,
21the hour, if any, and the month, day and year of the
22effective date.
23(6) The manner in which the plan was adopted by the
24company.
25(7) The plan of division.
26(b) Filing.--The certificate of division and the
27certificates or statement, if any, required by section 139
28(relating to tax clearance of certain fundamental transactions)
29shall be filed in the Department of State.
30(c) Effective date of division.--Upon the filing of the
1certificate of division in the Department of State or upon the
2effective date specified in the plan of division, whichever is
3later, the division shall become effective. The division of a
4domestic limited liability company into one or more foreign
5limited liability companies or the division of a foreign limited
6liability company shall be effective according to the laws of
7the jurisdictions where the foreign companies are or are to be
8organized but not until a certificate of division has been
9adopted and filed as provided in this subchapter.
10(d) Cross references.--See sections 134 (relating to
11docketing statement), 135 (relating to requirements to be met by
12filed documents) and 8907 (relating to execution of documents).
13§ 8965. Effect of division.
14(a) Multiple resulting companies.--Upon the division
15becoming effective, the dividing company shall be subdivided
16into the distinct and independent resulting companies named in
17the plan of division, and, if the dividing company is not to
18survive the division, the existence of the dividing company
19shall cease. The resulting companies, if they are domestic
20limited liability companies, shall not thereby acquire authority
21to engage in any business or exercise any right that a company
22may not be organized under this chapter to engage in or
23exercise. Any resulting foreign limited liability company that
24is stated in the certificate of division to be a qualified
25foreign limited liability company shall be a qualified foreign
26limited liability company under Subchapter J (relating to
27foreign companies), and the certificate of division shall be
28deemed to be the application for registration of a foreign
29limited liability company of the limited liability company.
30(b) Property rights; allocations of assets and
1liabilities.--
2(1) (i) All the property, real, personal and mixed, of
3the dividing company and all debts due on whatever
4account to it, including subscriptions for membership
5interests and other causes of action belonging to it,
6shall, except as otherwise provided in paragraph (2), to
7the extent allocations of assets are contemplated by the
8plan of division, be deemed without further action to be
9allocated to and vested in the resulting companies on
10such a manner and basis and with such effect as is
11specified in the plan, or per capita among the resulting
12companies as tenants in common if no specification is
13made in the plan, and the title to any real estate or
14interest therein vested in any of the companies shall not
15revert or be in any way impaired by reason of the
16division.
17(ii) Upon the division becoming effective, the
18resulting companies shall each thenceforth be responsible
19as separate and distinct companies only for such
20liabilities as each company may undertake or incur in its
21own name but shall be liable for the liabilities of the
22dividing company in the manner and on the basis provided
23in subparagraphs (iv) and (v).
24(iii) Liens upon the property of the dividing
25company shall not be impaired by the division.
26(iv) To the extent allocations of liabilities are
27contemplated by the plan of division, the liabilities of
28the dividing company shall be deemed without further
29action to be allocated to and become the liabilities of
30the resulting companies on such a manner and basis and
1with such effect as is specified in the plan; and one or
2more, but less than all, of the resulting companies shall
3be free of the liabilities of the dividing company to the
4extent, if any, specified in the plan if in either case:
5(A) no fraud on members or violation of law
6shall be effected thereby; and
7(B) the plan does not constitute a fraudulent
8transfer under 12 Pa.C.S. Ch. 51 (relating to
9fraudulent transfers).
10(v) If the conditions in subparagraph (iv) for
11freeing one or more of the resulting companies from the
12liabilities of the dividing company, or for allocating
13some or all of the liabilities of the dividing company,
14are not satisfied, the liabilities of the dividing
15company as to which those conditions are not satisfied
16shall not be affected by the division nor shall the
17rights of creditors thereunder or of any person dealing
18with the company be impaired by the division, and any
19claim existing or action or proceeding pending by or
20against the company with respect to those liabilities may
21be prosecuted to judgment as if the division had not
22taken place, or the resulting companies may be proceeded
23against or substituted in place of the dividing company
24as joint and several obligors on those liabilities,
25regardless of any provision of the plan of division
26apportioning the liabilities of the dividing company.
27(vi) The conditions in subparagraph (iv) for freeing
28one or more of the resulting companies from the
29liabilities of the dividing company and for allocating
30some or all of the liabilities of the dividing company
1shall be conclusively deemed to have been satisfied if
2the plan of division has been approved by the
3Pennsylvania Public Utility Commission in a final order
4issued after August 21, 2001, that has become not subject
5to further appeal.
6(2) (i) The allocation of any fee or freehold interest
7or leasehold having a remaining term of 30 years or more
8in any tract or parcel of real property situate in this
9Commonwealth owned by a dividing company (including
10property owned by a foreign limited liability company
11dividing solely under the law of another jurisdiction) to
12a new company resulting from the division shall not be
13effective until one of the following documents is filed
14in the office for the recording of deeds of the county,
15or each of them, in which the tract or parcel is
16situated:
17(A) A deed, lease or other instrument of
18confirmation describing the tract or parcel.
19(B) A duly executed duplicate original copy of
20the certificate of division.
21(C) A copy of the certificate of division
22certified by the Department of State.
23(D) A declaration of acquisition setting forth
24the value of real estate holdings in such county of
25the company as an acquired company.
26(ii) The provisions of 75 Pa.C.S. § 1114 (relating
27to transfer of vehicle by operation of law) shall not be
28applicable to an allocation of ownership of any motor
29vehicle, trailer or semitrailer to a new company under
30this section or under a similar law of any other
1jurisdiction but any such allocation shall be effective
2only upon compliance with the requirements of 75 Pa.C.S.
3§ 1116 (relating to issuance of new certificate following
4transfer).
5(3) It shall not be necessary for a plan of division to
6list each individual asset or liability of the dividing
7company to be allocated to a new company so long as those
8assets and liabilities are described in a reasonable and
9customary manner.
10(4) Each new company shall hold any assets and
11liabilities allocated to it as the successor to the dividing
12company, and those assets and liabilities shall not be deemed
13to have been assigned to the new company in any manner,
14whether directly or indirectly or by operation of law.
15(c) Taxes.--Any taxes, interest, penalties and public
16accounts of the Commonwealth claimed against the dividing
17company that are settled, assessed or determined prior to or
18after the division shall be the liability of any of the
19resulting companies and, together with interest thereon, shall
20be a lien against the franchises and property, both real and
21personal, of all the companies. Upon the application of the
22dividing company, the Department of Revenue, with the
23concurrence of the Office of Employment Security of the
24Department of Labor and Industry, shall release one or more, but
25less than all, of the resulting companies from liability and
26liens for all taxes, interest, penalties and public accounts of
27the dividing company due the Commonwealth for periods prior to
28the effective date of the division if those departments are
29satisfied that the public revenues will be adequately secured.
30(d) Certificate of organization of surviving company.--The
1certificate of organization of the surviving company, if there
2be one, shall be deemed to be amended to the extent, if any,
3that changes in its certificate are stated in the plan of
4division.
5(e) Certificates of organization of new companies.--The
6statements that are set forth in the plan of division with
7respect to each new domestic limited liability company and that
8are required or permitted to be set forth in a restated
9certificate of organization of companies organized under this
10chapter or the certificate of organization of each new company
11set forth therein shall be deemed to be the certificate of
12organization of each new company.
13(f) Managers.--Unless otherwise provided in the plan, the
14managers, if any, of the dividing limited liability company
15shall be the initial managers of each of the resulting
16companies.
17(g) Disposition of membership interests.--Unless otherwise
18provided in the plan, the membership interests and other
19securities or obligations, if any, of each new company resulting
20from the division shall be distributable to:
21(1) the surviving company if the dividing company
22survives the division; or
23(2) the members of the dividing company in the
24proportions in which the members share in distributions, in
25any other case.
26(h) Conflict of laws.--It is the intent of the General
27Assembly that:
28(1) The effect of a division of a domestic limited
29liability company shall be governed by the laws of this
30Commonwealth and any other jurisdiction under the laws of
1which any of the resulting companies is organized.
2(2) The effect of a division on the assets and
3liabilities of the dividing company shall be governed solely
4by the laws of this Commonwealth and any other jurisdiction
5under the laws of which any of the resulting companies is
6organized.
7(3) The validity of any allocation of assets or
8liabilities by a plan of division of a domestic limited
9liability company, regardless of whether or not any of the
10new companies is a foreign limited liability company, shall
11be governed solely by the laws of this Commonwealth.
12(4) In addition to the express provisions of this
13subsection, this subchapter shall otherwise generally be
14granted the protection of full faith and credit under the
15Constitution of the United States.
16§ 8978. Dissolution by domestication.
17Whenever a domestic limited liability company has
18domesticated itself under the laws of another jurisdiction by
19action similar to that provided by section 8982 (relating to
20domestication) and has authorized that action by the vote
21required by this subchapter for the approval of a proposal that
22the company dissolve voluntarily, the company may surrender its
23certificate of organization under the laws of this Commonwealth
24by filing in the Department of State a certificate of
25dissolution under section 8975 (relating to certificate of
26dissolution). In lieu of the statements required by section
278975(a)(2) through (4), the certificate of dissolution shall set
28forth a statement that the company has domesticated itself under
29the laws of another jurisdiction. If the company, as
30domesticated in the other jurisdiction, registers to do business
1in this Commonwealth either prior to or simultaneously with the
2filing of the certificate of dissolution under this section, the
3company shall not be required to file with the certificate of
4dissolution the tax clearance certificates that would otherwise
5be required by section 139 (relating to tax clearance of certain
6fundamental transactions).
7SUBCHAPTER J
8FOREIGN COMPANIES
9Sec.
108981. Foreign limited liability companies.
118982. Domestication.
12§ 8981. Foreign limited liability companies.
13(a) General rule.--A foreign limited liability company shall
14be subject to Subchapter K of Chapter 85 (relating to foreign
15limited partnerships) as if it were a foreign limited
16partnership, except that:
17(1) Section 8582(a)(5) and (6) (relating to
18registration) shall not be applicable to the application for
19registration of a foreign limited liability company.
20(2) If the foreign limited liability company is to be a
21qualified foreign restricted professional company, its
22application for registration shall so state and shall also
23contain a brief description of the professional service or
24services to be rendered by the company.
25(3) A qualified foreign limited liability company shall
26enjoy the same rights and privileges as a domestic limited
27liability company, but no more, and, except as otherwise
28provided by law, shall be subject to the same liabilities,
29restrictions, duties and penalties now in force or hereafter
30imposed upon domestic limited liability companies to the same
1extent as if it had been organized under this chapter.
2(b) Provision applicable to all foreign limited liability
3companies.--Section 8926 (relating to certain specifically
4authorized debt terms) shall be applicable to any obligation, as
5defined in section 1510 (relating to certain specifically
6authorized debt terms), of a foreign limited liability company
7executed or effected in this Commonwealth or affecting real
8property situated in this Commonwealth.
9§ 8982. Domestication.
10(a) General rule.--Any qualified foreign limited liability
11company may become a domestic limited liability company by
12filing in the Department of State a certificate of
13domestication. The certificate of domestication, upon being
14filed in the department, shall constitute the certificate of
15organization of the domesticated company, and it shall
16thereafter continue as a limited liability company which shall
17be a domestic limited liability company subject to this chapter.
18(b) Certificate of domestication.--The certificate of
19domestication shall be executed by the company and shall set
20forth in the English language:
21(1) The name of the company. If the name is in a foreign
22language, it shall be set forth in Roman letters or
23characters or Arabic or Roman numerals. If the name is one
24that is rendered unavailable for use by any provision of
25section 8905 (relating to name), the company shall adopt, in
26accordance with any procedures for changing the name of the
27company that are applicable prior to the domestication of the
28company, and shall set forth in the certificate of
29domestication an available name.
30(2) Subject to section 109 (relating to name of
1commercial registered office provider in lieu of registered
2address), the address, including street and number, if any,
3of its registered office in this Commonwealth.
4(3) A statement that upon domestication the company will
5be subject to the domestic limited liability company
6provisions of the Limited Liability Company Law of 1994 and,
7if desired, a brief statement of the purpose or purposes for
8which it is to be domesticated which shall be a purpose or
9purposes for which a domestic limited liability company may
10be organized under this chapter and which may consist of or
11include a statement that the company shall have unlimited
12power to engage in and to do any lawful act concerning any or
13all lawful business for which companies may be organized
14under the Limited Liability Company Law of 1994.
15(4) Any desired provisions relating to the manner and
16basis of reclassifying the membership interests of the
17company.
18(5) A statement that the filing of the certificate of
19domestication and, if desired, the renunciation of the
20original certificate of organization of the company has been
21authorized, unless its certificate of organization or other
22organic documents require a greater vote, by a majority of
23the votes cast by all members entitled to vote thereon and,
24if any class of members is entitled to vote thereon as a
25class, a majority of the votes cast in each class vote.
26(6) Any other provisions authorized or required by this
27chapter to be set forth in an original certificate of
28organization.
29See sections 134 (relating to docketing statement), 135
30(relating to requirements to be met by filed documents) and 8907
1(relating to execution of documents).
2(c) Effect of domestication.--
3(1) As a domestic limited liability company, the
4domesticated company shall no longer be a foreign limited
5liability company for the purposes of this chapter and shall
6instead be a domestic limited liability company with all the
7powers and privileges and all the duties and limitations
8granted and imposed upon domestic limited liability
9companies. In all other respects, the domesticated limited
10liability company shall be deemed to be the same limited
11liability company as it was prior to the domestication
12without any change in or effect on its existence. Without
13limiting the generality of the previous sentence, the
14domestication shall not be deemed to have dissolved the
15company or to have affected in any way:
16(i) the right and title of the company in and to its
17assets, property, franchises, estates and choses in
18action;
19(ii) the liability of the company for its debts,
20obligations, penalties and public accounts due the
21Commonwealth;
22(iii) any liens or other encumbrances on the
23property or assets of the company; or
24(iv) any contract, license or other agreement to
25which the company is a party or under which it has any
26rights or obligations.
27(2) The membership interests in the domesticated company
28shall be unaffected by the domestication except to the
29extent, if any, reclassified in the certificate of
30domestication.]
1Section 56. The definition of "transfer" in section 9112 of
2Title 15 is amended to read:
3§ 9112. Definitions.
4The following words and phrases when used in this chapter
5shall have the meanings given to them in this section unless the
6context clearly indicates otherwise:
7* * *
8["Transfer." Includes:
9(1) an assignment;
10(2) a conveyance;
11(3) a sale;
12(4) a lease;
13(5) an encumbrance, including a mortgage or security
14interest;
15(6) a gift; and
16(7) a transfer by operation of law.]
17Section 57. Sections 9302(3), 9502(a) introductory
18paragraph, 9503(b) and 9507(a) of Title 15 are amended to read:
19§ 9302. Application of chapter.
20This chapter shall apply to and the word "association" in
21this chapter shall mean a professional association organized
22under the act of August 7, 1961 (P.L.941, No.416), known as the
23Professional Association Act, which has not:
24* * *
25(3) [Elected to become a limited liability company in
26the manner provided by section 8908 (relating to election of
27professional association to become limited liability
28company).] Converted to a limited liability company under
29Subchapter E of Chapter 3 (relating to conversion).
30* * *
1§ 9502. Creation, status and termination of business trusts.
2(a) Creation.--[A business trust may be created in real or
3personal property, or both, with power in] Except as provided in
4the instrument, the trustee has the power:
5* * *
6§ 9503. Documentation of trust.
7* * *
8(b) Definition of "instrument".--The term "instrument," as
9used in this chapter, shall mean the original deed of trust or
10other written instrument, all amendments thereof and any other
11statements or certificates permitted or required to be filed in
12the department by sections 108 (relating to change in location
13or status of registered office provided by agent) and 138
14(relating to statement of correction), Chapter 3 (relating to
15entity transactions) or this chapter. If an amendment of the
16instrument or [articles of merger made in the manner permitted
17by section 1921(c) (relating to business trusts and other
18associations) or a certificate of merger made in the manner
19permitted by section 8545(c) (relating to business trusts and
20other associations)] a statement filed under Chapter 3 restates
21an instrument in its entirety, thenceforth the "instrument"
22shall not include any prior documents, and any certificate
23issued by the department with respect thereto shall so state.
24* * *
25§ 9507. Foreign business trusts.
26[(a) General rule.--A business trust organized under any
27laws other than those of this Commonwealth shall be subject to
28Subchapters B (relating to qualification) and C (relating to
29powers, duties and liabilities) of Chapter 41, as if it were a
30foreign business corporation, except that a qualified foreign
1business trust shall enjoy the same rights and privileges as a
2domestic business trust, but no more, and, except as otherwise
3provided by law, shall be subject to the same liabilities,
4restrictions, duties and penalties now in force or hereafter
5imposed upon domestic business trusts, to the same extent as if
6it were a domestic business trust.]
7* * *
8Section 58. Section 302 of Title 54 is amended to read:
9§ 302. Definitions.
10(a) Definitions.--The following words and phrases when used
11in this chapter shall have, unless the context clearly indicates
12otherwise, the meanings given to them in this section:
13"Business." Any commercial or professional activity.
14"Entity." Any individual or any corporation, association,
15partnership, joint-stock company, business trust, syndicate,
16joint adventureship or other combination or group of persons,
17regardless of whether it is organized or formed under the laws
18of this Commonwealth or any other jurisdiction.
19"Fictitious name." Any assumed or fictitious name, style or
20designation other than the proper name of the entity using such
21name. The term includes a name assumed by a general partnership,
22syndicate, joint adventureship or similar combination or group
23of persons.
24"Proper name." When used with respect to an association of a
25type listed in the following paragraphs, the term means the name
26set forth in:
27(1) the [articles of incorporation, for a corporation;]
28public organic record, for a domestic filing association;
29(2) the statement of registration, for a limited
30liability partnership;
1[(3) the certificate of limited partnership, for a
2limited partnership;]
3(4) the statement of election, for an electing
4partnership;
5[(5) the certificate of organization, for a limited
6liability company;
7(6) the articles of association, for a professional
8association;
9(7) the deed of trust or other trust instrument, if any,
10that has been filed in the Department of State for a business
11trust; or
12(8) a publicly filed document in another jurisdiction
13which is of a type listed in paragraphs (1) through (7).]
14(9) the statement of registration of a foreign
15registered association under 15 Pa.C.S. § 412(a)(1)(i)
16(relating to foreign registration statement), or if that name
17does not comply with 15 Pa.C.S. § 202 (relating to
18requirements for names generally), the name set forth in the
19statement under 15 Pa.C.S. § 412 (a)(1)(ii).
20(b) Other defined terms.--The definitions in 15 Pa.C.S. §
21102 (relating to definitions) apply to this title except to the
22extent they are inconsistent with the provisions of this title.
23Section 59. Section 303 of Title 54 is amended by adding a
24subsection to read:
25§ 303. Scope of chapter.
26* * *
27(d) Effect of registration.--The registration of a name
28under this chapter does not render the name unavailable for use
29by another entity.
30Section 60. Sections 311(e)(1) and (4), 501(a)(3), (4), (5),
1(6) and (8) and (b), 502(a)(2) introductory paragraph and 503(b)
2(1)(ii) and (c) of Title 54 are amended to read:
3§ 311. Registration.
4* * *
5(e) Duplicate use of names.--The fictitious name shall be
6distinguishable upon the records of the department from:
7(1) The name of any domestic [corporation, or any]
8filing entity, domestic limited liability limited
9partnership, domestic electing partnership, registered
10foreign [corporation authorized to do business in this
11Commonwealth,] association or the name of any corporation or
12other association registered at any time under Chapter 5
13(relating to corporate and other association names) unless
14such name is available or is made available for use under the
15provisions or procedures of 15 Pa.C.S. § [5303(b)(1)(i) or
16(ii) (relating to duplicate use of names) or the equivalent.]
17202(b)(1) (relating to requirements for names generally).
18* * *
19(4) A name the exclusive right to which is at the time
20reserved or registered by any other person [whatsoever in the
21manner provided by] under 15 Pa.C.S. § 208 (relating to
22reservation of name) or 209 (relating to registration of name
23of nonregistered foreign association) or another statute.
24* * *
25§ 501. Register established.
26(a) General rule.--A register is established by this chapter
27which shall consist of such of the following names as are not
28deleted therefrom by operation of section 504 (relating to
29effect of failure to make filings) or 506 (relating to voluntary
30termination of registration by corporations and other
1associations):
2* * *
3(3) In the case of a domestic or [qualified] registered
4foreign corporation, a name rendered unavailable for
5corporate use by other corporations by reason of any filing
6in the department by such domestic or [qualified] registered
7foreign corporation.
8(4) A name registered under 15 Pa.C.S. § [4131] 209
9(relating to registration of name of nonregistered foreign
10association) or any similar provision of law.
11(5) In the case of a business trust which exists subject
12to 15 Pa.C.S. Ch. 95 (relating to business trusts), the name
13of the trust as set forth in the[:
14(i)] instrument filed in the department under 15
15Pa.C.S. § 9503 (relating to documentation of trust)[; or
16(ii) application for registration filed under 15
17Pa.C.S. § 9507 (relating to foreign business trusts)].
18(6) In the case of a limited partnership or limited
19liability company subject to 15 Pa.C.S. Ch. 85 (relating to
20limited partnerships) or 89 (relating to limited liability
21companies), the name of the partnership or company as set
22forth in the certificate of limited partnership, certificate
23of organization or [application for] statement of
24registration as a registered foreign [limited partnership or
25foreign limited liability company, as the case may be]
26association.
27(8) In the case of a registered limited liability
28partnership subject to 15 Pa.C.S. Ch. 82 (relating to
29registered limited liability partnerships) that is not also a
30limited partnership, the name of the partnership as set forth
1in the statement of registration [or application for
2registration] as a registered foreign [registered limited
3liability partnership] association.
4(b) Subsequent availability of certain names.--Whenever, by
5reason of change in name, withdrawal or dissolution of a
6domestic or [qualified] registered foreign [corporation]
7association, failure to renew a registration of its name by a
8[nonqualified] nonregistered foreign [corporation] association,
9or for any other cause, its name is no longer rendered
10unavailable by the express provisions of Title 15 (relating to
11corporations and unincorporated associations), such name shall
12no longer be deemed to be registered under subsection (a)(3) or
13(4) on the register established by this chapter.
14§ 502. Certain additions to register.
15(a) Corporation names.--
16* * *
17(2) Any person who is not eligible to make a filing
18under 15 Pa.C.S. § [4131 (relating to registration of name)
19or 6131] 209 (relating to registration of name of
20nonregistered foreign association) may register a corporation
21name with the department by filing an application for
22registration of name, executed by the person, which shall set
23forth:
24* * *
25§ 503. Decennial filings required.
26* * *
27(b) Exceptions.--Subsection (a) shall not apply to any of
28the following:
29(1) A corporation or other association that during the
30ten years ending on December 31 of the year in which a filing
1would otherwise be required under subsection (a) has made any
2filing in the department pursuant to a provision of this
3title or 15 Pa.C.S. (relating to corporations and
4unincorporated associations) other than:
5* * *
6(ii) a filing under[:
7(A) 15 Pa.C.S. § 1305 (relating to reservation
8of corporate name);
9(B) 15 Pa.C.S. § 5305 (relating to reservation
10of corporate name);
11(C) 15 Pa.C.S. § 8203(b) (relating to name);
12(D) 15 Pa.C.S. § 8505(b) (relating to name); or
13(E)] 15 Pa.C.S. § [8905(b)] 208 (relating to
14reservation of name) or 209 (relating to registration
15of name of nonregistered foreign association).
16* * *
17[(c) Exemptions.--An association shall be exempt from the
182001 decennial filing if the association made a filing:
19(1) After December 31, 1989, and before January 1, 1992,
20pursuant to a provision of this title or 15 Pa.C.S. other
21than a filing under:
22(i) 15 Pa.C.S. § 1305;
23(ii) 15 Pa.C.S. § 5305;
24(iii) 15 Pa.C.S. § 8203(b);
25(iv) 15 Pa.C.S. § 8505(b); or
26(v) 15 Pa.C.S. § 8905(b).
27(2) Under this section during the year 2000.]
28* * *
29Section 61. This act shall take effect <-in 60 days. as
30follows:
1(1) The following provisions shall take effect
2immediately:
3(i) The addition of 15 Pa.C.S. § 7411.
4(ii) This section.
5(2) The remainder of this act shall take effect July 1,
62015.