Merger And Conversion - California Revised Uniform Limited Liability Company Act - Corporations - CA

Section § 17710.01

This section provides definitions related to business conversions and mergers involving limited liability companies (LLCs) and other business entities. Key terms include: 'converted entity,' which is the result of converting a domestic LLC to another type of business or foreign entity; 'converted limited liability company,' a domestic LLC resulting from a conversion; 'converting limited liability company,' a domestic LLC changing into another business type; and 'converting entity,' which is any other type of business becoming a domestic LLC.

'Constituent' entities are those that participate in a merger, with 'surviving' entities being those remaining after the merger. 'Disappearing' entities do not survive the merger. The terms also cover entities from other jurisdictions (foreign) and define the various types of business structures, excluding non-profit associations and some LLCs, that may engage in these conversions or mergers.

For purposes of this article, the following definitions apply:

(a) “Converted entity” means the other business entity or foreign other business entity or foreign limited liability company that results from a conversion of a domestic limited liability company under this title.

(b) “Converted limited liability company” means a domestic limited liability company that results from a conversion of an other business entity or a foreign other business entity or a foreign limited liability company pursuant to Section 17710.08.

(c) “Converting limited liability company” means a domestic limited liability company that converts to an other business entity or a foreign other business entity or a foreign limited liability company pursuant to this title.

(d) “Converting entity” means an other business entity or a foreign other business entity or a foreign limited liability company that converts to a domestic limited liability company pursuant to Section 17710.08.

(e) “Constituent corporation” means a corporation that is merged with or into one or more limited liability companies, foreign limited liability companies, or other business entities and that includes a surviving corporation.

(f) “Constituent limited liability company” means a limited liability company that is merged with or into one or more other limited liability companies, foreign limited liability companies, or other business entities and that includes a surviving limited liability company.

(g) “Constituent other business entity” means an other business entity that is merged with or into one or more limited liability companies or foreign limited liability companies and that includes a surviving other business entity.

(h) “Disappearing limited liability company” means a constituent limited liability company or foreign limited liability company that is not the surviving limited liability company.

(i) “Disappearing other business entity” means a constituent other business entity that is not the surviving other business entity.

(j) “Foreign other business entity” means an other business entity formed under the laws of a jurisdiction other than this state.

(k) “Other business entity” means a corporation, general partnership, limited partnership, business trust, real estate investment trust, or unincorporated association, other than a nonprofit association, but excludes a limited liability company or a foreign limited liability company.

(l) “Surviving limited liability company” means a limited liability company or foreign limited liability company into which one or more other limited liability companies, foreign limited liability companies, other business entities, or foreign business entities are merged.

(m) “Surviving other business entity” means an other business entity into which one or more limited liability companies or foreign limited liability companies are merged.

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Section § 17710.02

This law explains how a limited liability company (LLC) in California can be converted into a different type of business organization, like a partnership or foreign LLC. It says that during conversion, the members must keep their same percentage of profit and capital in the new entity. If converting to another business type, all members' interests must be treated equally unless they agree otherwise. Additionally, the new entity's formation must be allowed by its own laws, and the LLC must follow any specific rules related to conversion.

(a) A limited liability company may be converted into an other business entity or a foreign other business entity or a foreign limited liability company pursuant to this article if both of the following apply:

(1) Pursuant to a conversion into a domestic or foreign general partnership or limited partnership or into a foreign limited liability company, each of the members of the converting limited liability company receives a percentage interest in the profits and capital of the converted entity equal to that member’s percentage interest in profits and capital of the converting limited liability company as of the effective time of the conversion.

(2) Pursuant to a conversion into an other business entity or foreign other business entity not specified in paragraph (1), both of the following occur:

(A) Each limited liability company interest of the same class is treated equally with respect to any distribution of cash, property, rights, interests, or securities of the converted entity, unless all members of the class consent.

(B) The nonredeemable limited liability company interests of the converting limited liability company are converted only into nonredeemable interests or securities of the converted entity, unless all holders of the unredeemable interests consent.

(b) The conversion of a limited liability company to an other business entity or a foreign other business entity or a foreign limited liability company may be effected only if both of the following conditions are satisfied:

(1) The law under which the converted entity will exist expressly permits the formation of that entity pursuant to a conversion.

(2) The limited liability company complies with all other requirements of any other law that applies to conversion to the converted entity.

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Section § 17710.03

This law explains the process for a limited liability company (LLC) in California that wants to convert into a different type of business entity, whether domestic or foreign. The LLC must prepare a detailed plan of conversion including terms of the conversion, where the new entity will be based, how membership interests will change, and the rules the new entity will follow.

Approval is needed from all managers and the majority of members, but if members might have personal liability, approval from all members is required unless all have dissenters' rights, meaning they can express formal disagreement. Once conversion is effective, all members are bound by the new rules, even if they didn’t sign them. Amendments to the plan can happen if approved in the same manner as the original plan. A conversion can be canceled before it’s finalized by the managers and members without needing further approval, respecting any contracts with third parties. The new entity must keep the conversion plan on site and provide it to any member who requests it, at the entity’s expense, and members cannot waive this right.

(a) A limited liability company that desires to convert to an other business entity or a foreign other business entity or a foreign limited liability company shall approve a plan of conversion.

The plan of conversion shall state all of the following:

(1) The terms and conditions of the conversion.

(2) The place of the organization of the converted entity and of the converting limited liability company and the name of the converted entity after conversion.

(3) The manner of converting the membership interests of each of the members into shares of, securities of, or interests in, the converted entity.

(4) The provisions of the governing documents for the converted entity, including the limited liability company articles of organization and operating agreement, or articles or certificate of incorporation if the converted entity is a corporation, to which the holders of interests in the converted entity are to be bound.

(5) Any other details or provisions that are required by the laws under which the converted entity is organized, or that are desired by the parties.

(b)

(1) The plan of conversion shall be approved by all managers and a majority of the members of each class of membership interest or if there are no managers, a majority of the members of each class of membership of the converting limited liability company, unless a greater approval is required by the operating agreement of the converting limited liability company.

(2) However, if the members of the limited liability company would become personally liable for any obligations of the converted entity as a result of the conversion, the plan of conversion shall be approved by all of the members of the converting limited liability company, unless the plan of conversion provides that all members will have dissenters’ rights as provided in Article 11 (commencing with Section 17711.01).

(c) Upon the effectiveness of the conversion, all members of the converting limited liability company, except those that exercise dissenters’ rights as provided in Article 11 (commencing with Section 17711.01), shall be deemed parties to any governing documents for the converted entity adopted as part of the plan of conversion, regardless of whether or not the member has executed the plan of conversion or the governing documents for the converted entity. Any adoption of governing documents made pursuant to the conversion shall be effective at the effective time or date of the conversion.

(d) Notwithstanding its prior approval, a plan of conversion may be amended before the conversion takes effect if the amendment is approved by all managers and a majority of the members or if there are no managers, a majority of the members of the converting limited liability company and, if the amendment changes any of the principal terms of the plan of conversion, the amendment is approved by the managers and members of the converting limited liability company in the same manner and to the same extent as required for the approval of the original plan of conversion.

(e) The managers by unanimous approval and the members of a converting limited liability company may, by majority approval at any time before the conversion is effective, in their discretion, abandon a conversion, without further approval by the managers or members, subject to the contractual rights of third parties other than managers or members.

(f) The converted entity shall keep the plan of conversion at the principal place of business of the converted entity if the converted entity is a domestic limited liability company or foreign other business entity, at the principal office of, or registrar or transfer agent of, the converted entity, if the converted entity is a domestic corporation, or at the office where records are to be kept pursuant to Section 17701.13 if the converted entity is a domestic limited liability company. Upon the request of a member of a converting limited liability company, the authorized person on behalf of the converted entity shall promptly deliver to the member or the holder of shares, interests, or other securities, at the expense of the converted entity, a copy of the plan of conversion. A waiver by a member of the rights provided in this subdivision shall be unenforceable.

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Section § 17710.04

This law section explains how and when a limited liability company (LLC) in California can convert into another type of business entity or foreign LLC. The conversion becomes official when three things happen: members approve the conversion plan, all necessary legal documents are filed (which may include a statement of conversion), and the planned effective date, if specified, arrives. Additionally, having a certified document from the Secretary of State serves as conclusive evidence that the conversion occurred.

(a) A conversion into an other business entity or a foreign other business entity or a foreign limited liability company shall become effective upon the earliest date that all of the following occur:

(1) The plan of conversion is approved by the members of the converting limited liability company, as provided in Section 17710.03.

(2) All documents required by law to create the converted entity are filed, which documents shall also contain a statement of conversion, if required under Section 17710.06.

(3) The effective date, if set forth in the plan of conversion, occurs.

(b) A copy of the certificate of limited partnership, statement of partnership authority, articles of incorporation, or certificate of conversion complying with Section 17710.06, if applicable, duly certified by the Secretary of State, is conclusive evidence of the conversion of the limited liability company.

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Section § 17710.05

If a California limited liability company (LLC) wants to convert into a foreign LLC or another foreign business entity, the conversion must comply with the laws of the new location. The conversion becomes effective according to those foreign laws.

If you need to enforce an obligation against a California LLC that has converted to a foreign entity and you can't find someone to serve legal papers, the Secretary of State can act as their agent. To do this, a court must agree, and you must follow a specific process that involves delivering papers to the Secretary of State. The service is considered complete 10 days after the papers are delivered. The Secretary of State will then notify the foreign entity by mail. They also keep records of all such proceedings, which can be used as evidence in court.

(a) If the limited liability company is converting into a foreign limited liability company or foreign other business entity, those conversion proceedings shall be in accordance with the laws of the state or place of organization of the foreign limited liability company or foreign other business entity and the conversion shall become effective in accordance with that law.

(b)

(1) To enforce an obligation of a limited liability company that has converted to a foreign limited liability company or foreign other business entity, the Secretary of State shall only be the agent for service of process in an action or proceeding against that converted foreign entity, if the agent designated for the service of process for that entity is a natural person and cannot be found with due diligence or if the agent is a corporation and no person, to whom delivery may be made, may be located with due diligence, or if no agent has been designated and if none of the officers, members, managers, or agents of that entity may be located after diligent search, and it is shown by affidavit to the satisfaction of the court. The court then may make an order that service be made by personal delivery to the Secretary of State or to an assistant or Deputy Secretary of State of two copies of the process together with two copies of the order, and the order shall set forth an address to which the process shall be sent by the Secretary of State. Service in this manner is deemed complete on the 10th day after delivery of the process to the Secretary of State.

(2) Upon receipt of the process and order and the fee set forth in Section 12197 of the Government Code, the Secretary of State shall provide notice to that entity of the service of the process by forwarding by certified mail, return receipt requested, a copy of the process and order to the address specified in the order.

(3) The Secretary of State shall keep a record of all process served upon the Secretary of State and shall record the time of service and the Secretary of State’s action with respect to the process served. The certificate of the Secretary of State, under the Secretary of State’s official seal, certifying to the receipt of process, the providing of notice of process to that entity, and the forwarding of the process shall be competent and prima facie evidence of the matters stated therein.

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Section § 17710.06

This section explains what needs to happen when a limited liability company (LLC) in California changes into a different type of business entity, like a partnership or corporation. It details the paperwork required for each type of conversion, which must be filed with the Secretary of State. For domestic entities, the conversion details are included in documents like the certificate of limited partnership or the articles of incorporation. For a foreign business entity, a separate certificate of conversion is needed. The conversion documents must be approved by the LLC's members or managers and include specific details about the new entity, like its name and address. Filing these documents automatically cancels the original LLC, eliminating the need for further cancellation actions according to related laws. The forms used for conversion must be those provided by the Secretary of State.

(a) Upon conversion of a limited liability company, one of the following applies:

(1) If the limited liability company is converting into a domestic limited partnership, a statement of conversion shall be completed on a certificate of limited partnership for the converted entity and shall be filed with the Secretary of State.

(2) If the limited liability company is converting into a domestic partnership, a statement of conversion shall be completed on the statement of partnership authority for the converted entity. If no statement of partnership authority is filed, a certificate of conversion shall be filed separately with the Secretary of State.

(3) If the limited liability company is converting into a domestic corporation, a statement of conversion shall be completed on the articles of incorporation for the converted entity and shall be filed with the Secretary of State.

(4) If the limited liability company is converting to a foreign limited liability company or foreign other business entity, a certificate of conversion shall be filed with the Secretary of State.

(b) Any certificate or statement of conversion shall be executed and acknowledged by all members of a member-managed limited liability company or all managers of a manager-managed limited liability company, unless a lesser number is provided in the articles of organization or operating agreement, and shall set forth all of the following:

(1) The name of the converting limited liability company and the Secretary of State’s file number of the converting limited liability company.

(2) A statement that the principal terms of the plan of conversion were approved by a vote of the members, that equaled or exceeded the vote required under Section 17710.03, specifying each class entitled to vote and the percentage vote required of each class.

(1) The name, form, and jurisdiction of organization of the converted entity.

(2) The name, street address, and mailing address of the converted entity’s agent for service of process. If a corporation qualified under Section 1505 is designated as the agent, no address for it shall be set forth.

(3) The street address of the converted entity’s principal office.

(d) The filing with the Secretary of State of a certificate of conversion, a certificate of limited partnership, a statement of partnership authority, or articles of incorporation containing a statement of conversion as set forth in subdivision (a) shall have the effect of the filing of a certificate of cancellation by the converting limited liability company, and no converting limited liability company that has made the filing is required to take any action under Article 7 (commencing with Section 17707.01) as a result of that conversion.

(e) For the purposes of this title, the certificate of conversion shall be on a form prescribed by the Secretary of State.

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Section § 17710.07

This law explains the process for changing (or converting) a business entity, like a limited liability company (LLC), into a different kind of business entity, while still owning real property in California. When a conversion happens under the laws of California or another place, and that place's laws say the new entity will own all real property from the old entity, certain documents need to be filed with the county recorder's office. This filing acts as proof that the new entity owns the property.

These documents can be different depending on the entity type, such as a certificate of conversion or articles of incorporation. Filing these documents creates a solid presumption for buyers or lenders that the conversion was done correctly, assuming the document shows the old and new entity names as per the law.

(a) Whenever a limited liability company or other business entity having any real property in this state converts into a limited liability company or an other business entity pursuant to the laws of this state or of the state or place where the limited liability company or other business entity was organized, and the laws of the state or place of organization, including this state, of the converting limited liability company or other converting entity provide substantially that the conversion vests in the converted limited liability company or other converted entity all the real property of the converting limited liability company or other converting entity, the filing for record in the office of the county recorder of any county in this state where any of the real property of the converting limited liability company or other converting entity is located of either of the following shall evidence record ownership in the converted limited liability company or other converted entity of all interest of the converting limited liability company or other converting entity in and to the real property located in that county:

(1) A certificate of conversion or a statement of partnership authority, a certificate of limited partnership, or articles of incorporation complying with Section 17710.06 certified on or after the effective date of the conversion by the Secretary of State.

(2) A copy of a certificate of conversion or a statement of partnership authority, certificate of limited partnership, articles of organization, articles of incorporation, or other certificate or document evidencing the creation of a foreign other business entity or foreign limited liability company by conversion, containing a statement of conversion, certified by the Secretary of State or an authorized public official of the state or place pursuant to the laws of which the conversion is effected.

(b) A filed and, if appropriate, recorded certificate of conversion or a statement of partnership authority, certificate of limited partnership, articles of organization, articles or certificate of incorporation, or other certificate evidencing the creation of a foreign other business entity or foreign limited liability company by conversion, containing a statement of conversion, filed pursuant to subdivision (a) of Section 17710.06, stating the name of the converting limited liability company or other converting entity in whose name property was held before the conversion and the name of the converted entity or converted limited liability company, but not containing all of the other information required by Section 17710.06, operates with respect to the entities named to the extent provided in subdivision (a).

(c) Recording of a certificate of conversion, or a statement of partnership authority, certificate of limited partnership, articles of organization, articles of incorporation, or other certificate evidencing the creation of an other business entity or a limited liability company by conversion, containing a statement of conversion, in accordance with subdivision (a), shall create, in favor of bona fide purchasers or encumbrances for value, a conclusive presumption that the conversion was validly completed.

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Section § 17710.08

This law explains how a different type of business or a foreign business can change into a domestic (California-based) limited liability company (LLC). To do this, the converting business must have permission under its current laws to make such a change. They need to approve a conversion plan based on their existing governance documents, whether they are partnership agreements, organizational articles, or similar documents.

The conversion process must be agreed upon by the required number of decision-makers, like members or shareholders, as per the current laws. The conversion is finalized when all documents, specifically the articles of organization including the conversion statement, are filed with the California Secretary of State. If the law governing the entity doesn't specify when the conversion is effective, it becomes effective as soon as all formation requirements for an LLC are completed in California.

If a foreign entity already operates within California, filing these documents will automatically cancel its previous registration, and they won't need to file separate cancellation documents. Also, a foreign corporation will automatically give up its permission to do business within California once it converts.

(a) An other business entity or a foreign other business entity or a foreign limited liability company may be converted to a domestic limited liability company pursuant to this article only if the converting entity is authorized by the laws pursuant to which it is organized to effect the conversion.

(b) An other business entity or a foreign other business entity or a foreign limited liability company that desires to convert into a domestic limited liability company shall approve a plan of conversion or another instrument as is required to be approved to effect the conversion pursuant to the laws under which that entity is organized.

(c) The conversion of an other business entity or a foreign other business entity or a foreign limited liability company into a domestic limited liability company shall be approved by the number or percentage of the members, managers, shareholders, or holders of interest of the converting entity as is required by the laws under which that entity is organized, or a greater or lesser percentage, subject to applicable laws, as set forth in the converting entity’s partnership agreement, articles of organization, operating agreement, articles or certificate of incorporation, or other governing document.

(d) The conversion by an other business entity or a foreign other business entity or a foreign limited liability company into a domestic limited liability company shall be effective under this article at the time the conversion is effective under the laws under which the converting entity is organized, as long as the articles of organization containing a statement of conversion has been filed with the Secretary of State. If the converting entity’s governing law is silent as to the effectiveness of the conversion, the conversion shall be effective upon the completion of all acts required under this title to form a limited liability company.

(e) If the converting foreign limited liability company or foreign limited liability partnership is authorized to transact intrastate business in this state, the filing with the Secretary of State of its articles of organization containing a statement of conversion pursuant to the laws under which the converting foreign limited liability company or foreign other business entity is organized shall have the effect of the filing of a certificate of cancellation by the converting foreign limited partnership or foreign limited liability company and no converting foreign limited liability company or foreign limited partnership that has made the filing is required to file a certificate of cancellation under Section 15909.07 or 17708.06 as a result of that conversion. If a converting other business entity is a foreign corporation qualified to transact intrastate business in this state, the foreign corporation shall, by virtue of the filing, automatically surrender its right to transact intrastate business.

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Section § 17710.09

This law explains what happens when a business entity converts into another type of entity. Legally, the newly converted entity is still considered the same as the old one, meaning it's not like a sale or transfer of property. After conversion, the new entity keeps all of the original entity's rights and property, and it also keeps any debts or obligations it had. Creditors' rights stay the same, so they can still go after the new entity for any debts. If there was a lawsuit involving the old entity, it can continue against the new entity too.

If you were a member or part owner of the business before it converted, you still have responsibilities. You're still on the hook for any of the old entity's obligations that you were personally responsible for. Plus, you may be responsible for new obligations after the business converts, but usually, these would only be paid out from the business's assets, unless the business documents say otherwise. If someone had every reason to believe you were a partner rather than a member, you might be liable for some new obligations within 90 days of the conversion.

(a) An entity that converts into another entity pursuant to this article is for all purposes other than for the purposes of Part 10 (commencing with Section 17001), Part 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code, the same entity that existed before the conversion and the conversion shall not be deemed a transfer of property.

(b) Upon a conversion taking effect, all of the following apply:

(1) All the rights and property, whether real, personal, or mixed, of the converting entity or converting limited liability company are vested in the converted entity or converted limited liability company.

(2) All debts, liabilities, and obligations of the converting entity or converting limited liability company continue as debts, liabilities, and obligations of the converted entity or converted limited liability company.

(3) All rights of creditors and liens upon the property of the converting entity or converting limited liability company shall be preserved unimpaired and remain enforceable against the converted entity or converted limited liability company to the same extent as against the converting entity or converting limited liability company as if the conversion had not occurred.

(4) Any action or proceeding pending by or against the converting entity or converting limited liability company may be continued against the converted entity or converted limited liability company as if the conversion had not occurred.

(1) All obligations of the converting limited liability company for which the member was personally liable before the conversion.

(2) All obligations of the converted entity incurred after the conversion takes effect, but those obligations may be satisfied only out of property of the entity if that member of a limited liability company, or a shareholder in a corporation, or unless expressly provided otherwise in the articles of organization or other governing documents, a limited partner of a limited partnership, or a holder of equity securities in another converted entity if the holders of equity securities in that entity are not personally liable for the obligations of that entity under the law under which the entity is organized or its governing documents.

(d) A member of a converted limited liability company remains liable for any and all obligations of the converting entity for which the member was personally liable before the conversion, but only to the extent that the member was liable for the obligations of the converting entity prior to the conversion.

(e) If the other party to a transaction with the limited liability company reasonably believes when entering into the transaction that the limited liability company member is a general partner, the limited liability company member is liable for the obligations incurred by the limited liability company within 90 days after the conversion takes effect. The limited liability company member’s liability for all other obligations of the limited liability company incurred after the conversion takes effect is that of a limited liability company member.

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Section § 17710.10

This law states that if you're dealing with mergers involving limited liability companies (LLCs), you should refer to sections 17710.11 to 17710.19 for detailed rules and guidelines.

Mergers of limited liability companies shall be governed by Sections 17710.11 to 17710.19, inclusive.

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Section § 17710.11

This law explains how different kinds of business entities, like limited liability companies (LLCs) and foreign business entities, can merge together. It allows for the merger of multiple LLCs or a combination of LLCs and other business entities, both domestic and foreign, into one entity. At least one of the merging entities must be a domestic LLC if it's going to be the surviving company. Foreign entities can only merge if the laws of their jurisdiction allow it. Additionally, if a foreign entity is the surviving business, the law where it is organized must permit such a merger.

The following entities may be merged pursuant to this article:

(a) Two or more limited liability companies, two or more foreign limited liability companies, or one or more limited liability companies and one or more foreign limited liability companies into one limited liability company or foreign limited liability company except that there must be at least one constituent domestic limited liability company for a surviving limited liability company.

(b) One or more limited liability companies, one or more foreign limited liability companies, and one or more other business entities into one of those other business entities or foreign other business entities.

(c) One or more limited liability companies, one or more foreign limited liability companies, and one or more other business entities or foreign other business entities into one limited liability company or foreign limited liability company.

(d) Notwithstanding this section, the merger of any number of limited liability companies with any number of other business entities or foreign other business entities may be effected only if the other business entities that are organized in this state are authorized by the laws under which they are organized to effect the merger, and the following apply:

(1) If a limited liability company is the surviving limited liability company, the foreign other business entities are not prohibited by the laws under which they are organized from effecting that merger.

(2) If a foreign limited liability company or foreign other business entity is the survivor of the merger, the laws of the jurisdiction under which the survivor is organized authorize that merger. Notwithstanding the first sentence of this paragraph, if one or more domestic corporations is also a party to the merger described in that sentence, the merger may be effected only if, with respect to any foreign other business entity that is a corporation, the foreign corporation is authorized by the laws under which it is organized to effect that merger.

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Section § 17710.12

This section addresses how a limited liability company (LLC) and other types of business entities can merge. First, an agreement of merger must be approved by the managers and a majority of members of each class within the LLC, or by all members if they will be personally liable after the merger unless specific rights are granted. The merger agreement must include details like the terms of the merger, names and origins of the involved companies, how membership interests will be converted or treated, any necessary amendments, and additional legal provisions.

Members of the same class in the LLCs should receive equal treatment regarding distributions unless they all consent to different terms. Amendments to the merger agreement can happen before the merger is finalized if approved similarly to the original agreement. The managers and members can cancel the merger prior to its completion, respecting third-party rights. Lastly, the surviving entity must keep the agreement of merger accessible and share it with members or shareholders upon request.

(a) Each limited liability company and other business entity that desires to merge shall approve an agreement of merger.

The agreement of merger shall be approved by all managers and a majority of the members of each class of membership interests of each constituent limited liability company, unless a greater approval is required by the operating agreement of the constituent limited liability company. Notwithstanding the previous sentence, if the members of any constituent limited liability company become personally liable for any obligations of a constituent limited liability company or constituent other business entity as a result of the merger, the principal terms of the agreement of merger shall be approved by all of the members of the constituent limited liability company, unless the agreement of merger provides that all members shall have the dissenters’ rights provided in Article 11 (commencing with Section 17711.01). The agreement of merger shall be approved on behalf of each constituent other business entity by those persons required to approve the merger by the laws under which it is organized. Other persons, including a parent of a constituent limited liability company, may be parties to the agreement of merger. The agreement of merger shall state all of the following:

(1) The terms and conditions of the merger.

(2) The name and place of the organization of the surviving limited liability company or surviving other business entity, and of each disappearing limited liability company and disappearing other business entity, and the agreement of merger may change the name of the surviving limited liability company, the new name may be the same as or similar to the name of a disappearing domestic or foreign limited liability company, subject to Section 17701.08.

(3) The manner of converting the membership interests of each of the constituent limited liability companies into interests, shares, or other securities of the surviving limited liability company or surviving other business entity, and if limited liability company interests of any of the constituent limited liability companies are not to be converted solely into interests, shares, or other securities of the surviving limited liability company or surviving other business entity, the cash, property, rights, interests, or securities that the holders of the limited liability company interests are to receive in exchange for the membership interests, the cash, property, rights, interests, or securities that may be in addition to or in lieu of interests, shares, or other securities of the surviving limited liability company or surviving other business entity, or that the limited liability company interests are canceled without consideration.

(4) The amendments to the articles of organization of the surviving limited liability company, if applicable, to be effected by the merger, if any.

(5) Any other details or provisions that are required by the laws under which any constituent other business entity is organized, including, if a domestic corporation is a party to the merger, as provided in subdivision (b) of Section 1113.

(6) Any other details or provisions that are desired, including, without limitation, a provision for the treatment of fractional membership interests.

(b)

(1) Each membership interest of the same class of any constituent limited liability company, other than a membership interest in another constituent limited liability company that is being canceled and that is held by a constituent limited liability company or its parent or a limited liability company of which the constituent limited liability company is a parent shall, unless all members of the class consent, be treated equally with respect to any distribution of cash, property, rights, interests, or securities.

(2) Notwithstanding paragraph (1), except in a merger of a limited liability company with a limited liability company that controls at least 90 percent of the membership interests entitled to vote with respect to the merger, the unredeemable membership interests of a constituent limited liability company may be converted only into unredeemable interests or securities of the surviving limited liability company or other business entity, or a parent if a constituent limited liability company or a constituent other business entity or its parent owns, directly or indirectly, prior to the merger, membership interests of another constituent limited liability company or interests or securities of a constituent other business entity representing more than 50 percent of the interests or securities entitled to vote with respect to the merger of the other constituent limited liability company or constituent other business entity or more than 50 percent of the voting power, as defined in Section 194.5, of a constituent other business entity that is a domestic corporation, unless all of the members of the class consent.

(3) The provisions of this subdivision do not apply to any transaction if the commissioner has approved the terms and conditions of the transaction and the fairness of those terms pursuant to Section 25142.

(c) Notwithstanding its prior approval, an agreement of merger may be amended prior to the filing of the certificate of merger or the agreement of merger, as provided in Section 17710.14, if the amendment is approved by the managers and members of each constituent limited liability company in the same manner as required for approval of the original agreement of merger and, if the amendment changes any of the principal terms of the agreement of merger, the amendment is approved by the managers and members of each constituent limited liability company in the same manner and to the same extent as required for the approval of the original agreement of merger, and by each of the constituent other business entities.

(d) The managers and members of a constituent limited liability company may, in their discretion, abandon a merger, subject to the contractual rights, if any, of third parties, including other constituent limited liability companies and constituent other business entities, without further approval by the membership interests, at any time before the merger is effective.

(e) An agreement of merger approved in accordance with subdivision (a) may do the following:

(1) Effect any amendment to the operating agreement of any constituent limited liability company.

(2) Effect the adoption of a new operating agreement for a constituent limited liability company if it is the surviving limited liability company in the merger. Any amendment to an operating agreement or adoption of a new operating agreement made pursuant to the foregoing sentence shall be effective at the effective time or date of the merger. Notwithstanding the above provisions of this subdivision, if a greater number of members is required to approve an amendment to the operating agreement of a constituent limited liability company than is required to approve the agreement of merger pursuant to subdivision (a), and the number of members that approve the agreement of merger is less than the number of members required to approve an amendment to the operating agreement of the constituent limited liability company, any amendment to the operating agreement or adoption of a new operating agreement of that constituent limited liability company made pursuant to the first sentence of this subdivision shall be effective only if the agreement of merger provides that all of the members shall have the dissenters’ rights provided in Article 11 (commencing with Section 17711.01).

(f) The surviving limited liability company or surviving other business entity shall keep the agreement of merger at its designated office or at the business address specified in paragraph (5) of subdivision (a) of Section 17710.14, as applicable, and, upon the request of a member of a constituent limited liability company or a holder of shares, interests, or other securities of a constituent other business entity, the managers or members of the surviving limited liability company or the authorized person of the surviving other business entity shall promptly deliver to the member or the holder of shares, interests, or other securities, at the expense of the surviving limited liability company or surviving other business entity, a copy of the agreement of merger. A waiver by a member or holder of shares, interests, or other securities of the rights provided in this subdivision shall be unenforceable.

merger agreement limited liability company approval process ...

Section § 17710.13

This law states that the rules in Subdivision (b) of Section 17710.12 don't apply if a transaction has been reviewed and approved by the commissioner for both its terms and its fairness, according to Section 25142.

Subdivision (b) of Section 17710.12 shall not apply to any transaction if the commissioner has approved the terms and conditions of the transaction and the fairness of such terms and conditions pursuant to Section 25142.

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Section § 17710.14

This law outlines the process for filing a certificate of merger when a limited liability company (LLC) or other business entity merges. To complete a merger, the participating companies must file a certificate with the Secretary of State. This document requires details like the involved entities' names and file numbers, voting outcomes if necessary, and any changes to the surviving LLC's articles of organization.

If the merger involves an LLC as the surviving entity, changes to its articles are legally recognized without needing a separate amendment filing. The statute also includes provisions for foreign LLCs and corporations, requiring information about their origin and jurisdiction. A completed merger filing also acts as a cancellation of the disappearing LLCs, and foreign corporations will automatically lose the right to conduct business within the state.

(a) If the surviving entity is a limited liability company or an other business entity, other than a corporation in a merger in which a domestic corporation is a constituent party, after approval of a merger by the constituent limited liability companies and any constituent other business entities, the constituent limited liability companies and constituent other business entities shall file a certificate of merger in the office of, and on a form prescribed by, the Secretary of State. The certificate of merger shall be executed and acknowledged by each domestic constituent limited liability company by all managers, or if none, all members unless a lesser number is provided in the articles of organization or operating agreement of the domestic constituent limited liability company and by each foreign constituent limited liability company by one or more managers, or if none, members, and by each constituent other business entity by those persons required to execute the certificate of merger by the laws under which the constituent other business entity is organized. The certificate of merger shall set forth all of the following:

(1) The names and the Secretary of State’s file numbers, if any, of each of the constituent limited liability companies and constituent other business entities, separately identifying the disappearing limited liability companies and disappearing other business entities and the surviving limited liability company or surviving other business entity.

(2) If a vote of the members was required pursuant to Section 17710.12, a statement setting forth the total number of outstanding interests of each class entitled to vote on the merger and that the principal terms of the agreement of merger were approved by a vote of the number of interests of each class that equaled or exceeded the vote required, specifying each class entitled to vote and the percentage vote required of each class.

(3) If the surviving entity is a limited liability company and not an other business entity, any change required to the information set forth in the articles of organization of the surviving limited liability company resulting from the merger, including any change in the name of the surviving limited liability company resulting from the merger. The filing of a certificate of merger setting forth any such changes to the articles of organization of the surviving limited liability company shall have the effect of the filing of a certificate of amendment by the surviving limited liability company, and the surviving limited liability company need not file an amendment under Section 17702.02 to reflect those changes.

(4) The future effective date, that shall be a date certain not more than 90 days subsequent to the date of filing of the merger, if the merger is not to be effective upon the filing of the certificate of merger with the office of the Secretary of State.

(5) If the surviving entity is an other business entity or a foreign limited liability company, the full name of the entity, type of entity, legal jurisdiction where the entity was organized and by whose laws its internal affairs are governed, and the address of the principal place of business of the entity.

(6) Any other information required to be stated in the certificate of merger by the laws where each constituent other business entity is organized, including if a domestic corporation is a party to the merger, as required under paragraph (2) of subdivision (g) of Section 1113. If the surviving entity is a foreign limited liability company in a merger where a domestic corporation is a disappearing other business entity, a copy of the agreement of merger and attachments as required under paragraph (1) of subdivision (g) of Section 1113 shall be filed at the same time as the filing of the certificate of merger.

(b) If the surviving entity is a domestic corporation or a foreign corporation in a merger that a domestic corporation is a constituent party, after approval of the merger by the constituent limited liability companies and constituent other business entities, the surviving corporation shall file in the office of the Secretary of State a copy of the agreement of merger and attachments required under paragraph (1) of subdivision (g) of Section 1113. The certificate of merger shall be executed and acknowledged by each domestic constituent limited liability company by all of the managers, unless a lesser number is provided in the articles of organization of the limited liability company.

(c) A certificate of merger or the agreement of merger, as is applicable under subdivisions (a) and (b), shall have the effect of the filing of a certificate of cancellation for each disappearing limited liability company, and no disappearing limited liability company need take any action under Article 7 (commencing with Section 17707.01) concerning dissolution as a result of the merger.

(d) If a disappearing other entity is a foreign corporation qualified to transact intrastate business in this state, the filing of the certificate of merger or agreement of merger, as is applicable, by the foreign corporation shall automatically surrender its right to transact intrastate business.

certificate of merger surviving entity disappearing entity ...

Section § 17710.15

This section explains when a merger between limited liability companies (LLCs) becomes effective. Generally, a merger is effective once the necessary documentation is filed with the Secretary of State, unless a future date is specified. Once filed, a certified copy serves as conclusive proof that the merger has occurred.

If a corporation is the surviving entity, a certified agreement of merger proves that all necessary steps and conditions were met for the merger and any related changes to the corporation's articles.

(a) Unless a future effective date is provided in a certificate of merger or the agreement of merger, if an agreement of merger is required to be filed under Section 17710.14, in which event the merger shall be effective at that future effective date, a merger shall be effective upon the filing of the certificate of merger or the agreement of merger, as is applicable, in the office of the Secretary of State.

(b)

(1) For all purposes, a copy of the certificate of merger duly certified by the Secretary of State is conclusive evidence of the merger of the constituent limited liability companies, either by themselves or together with constituent other business entities, into the surviving other business entity, or the constituent limited liability companies or the constituent other business entities, or both, into the surviving limited liability company.

(2) In a merger in which the surviving entity is a corporation in a merger in which a domestic corporation and a domestic limited liability company are parties to the merger, a copy of an agreement of merger certified on or after the effective date by an official having custody thereof has the same force in evidence as the original and, except as against the state, is conclusive evidence of the performance of all conditions precedent to the merger, the existence on the effective date of the surviving corporation, and the performance of the conditions necessary to the adoption of any amendment to the articles of incorporation of the surviving corporation, if applicable, contained in the agreement of merger.

merger effectiveness certificate of merger agreement of merger ...

Section § 17710.16

This law explains what happens when limited liability companies (LLCs) merge with other LLCs or business entities. After the merger, the original companies cease to exist individually. The company that remains takes on all the assets and responsibilities of the merged companies as if they were originally its own.

The rights of creditors and any liens imposed on the merging companies' assets are preserved, and these can be enforced against the surviving company as well. Additionally, any ongoing legal actions against the original companies continue against the surviving one.

If a member of a disappearing LLC was personally responsible for any debts before the merger, their liability doesn't change due to the merger.

(a) Upon a merger of limited liability companies or limited liability companies and other business entities pursuant to this article, the separate existence of the disappearing limited liability companies and disappearing other business entities ceases and the surviving limited liability company or surviving other business entity shall succeed, without other transfer, act or deed, to all the rights and property, whether real, personal, or mixed, of each of the disappearing limited liability companies and disappearing other business entities, and shall be subject to all the debts and liabilities of each in the same manner as if the surviving limited liability company or surviving other business entity had itself incurred them.

(b) All rights of creditors and all liens upon the property of each of the constituent limited liability companies and constituent other business entities shall be preserved unimpaired and may be enforced against the surviving limited liability company or the surviving other business entity to the same extent as if the debt, liability, or duty which gave rise to that lien had been incurred or contracted by the surviving limited liability company or the surviving other business entity, provided that such liens upon the property of a disappearing limited liability company or disappearing other business entity shall be limited to the property affected thereby immediately prior to the time the merger is effective.

(c) Any action or proceeding pending by or against any disappearing limited liability company or disappearing other business entity may be prosecuted to judgment, which shall bind the surviving limited liability company or surviving other business entity, or the surviving limited liability company or surviving other business entity may be proceeded against or be substituted in the place of the disappearing limited liability company or disappearing other business entity.

(d) Nothing in this article is intended to affect the liability a member of a disappearing limited liability company may have in connection with the debts and liabilities of the disappearing limited liability company existing prior to the time the merger is effective.

merger of LLCs disappearing company surviving company ...

Section § 17710.17

This law explains the procedures for merging different types of limited liability companies (LLCs) and business entities in California. If the surviving entity after a merger is a domestic (California-based) LLC or business, the merger must follow specific state guidelines. If it's a foreign entity, the merger follows the guidelines of the foreign jurisdiction but still requires certain filings in California. This includes a certificate of merger to make the merger effective for domestic companies involved.

If any part of the merger involves a foreign LLC registered to do business in California, the registration is automatically canceled without needing a separate filing. The law also outlines the rights of LLC members and requires foreign surviving entities to agree to certain conditions, like being served legally in California and compensating dissenting shareholders appropriately. They must appoint the California Secretary of State as an agent for service of process.

(a) If the surviving entity is a domestic limited liability company or a domestic other business entity, the merger proceedings with respect to that limited liability company or other business entity and any domestic disappearing limited liability company shall conform to the provisions of this article governing the merger of domestic limited liability companies, but if the surviving entity is a foreign limited liability company or a foreign other business entity, then, subject to the requirements of subdivision (d) and Article 11 (commencing with Section 17711.01) and, with respect to any domestic constituent corporation, Section 1113, Chapter 12 (commencing with Section 1200), and Chapter 13 (commencing with Section 1300) of Division 1 of Title 1 and, with respect to any domestic constituent limited partnership, Article 11.5 (commencing with Section 15911.20) of Chapter 5.5 of Title 2, the merger proceedings may be in accordance with the laws of the state or place of organization of the surviving limited liability company or surviving other business entity.

(b) If the surviving entity is a domestic limited liability company or domestic other business entity, other than a domestic corporation, the certificate of merger shall be filed as provided in subdivision (a) of Section 17710.14, and thereupon, subject to subdivision (a) of Section 17710.15, the merger shall be effective as to each domestic constituent limited liability company and domestic constituent other business entity. If the surviving entity is a domestic corporation, the agreement of merger with attachments shall be filed pursuant to subdivision (b) of Section 17710.14, and thereupon, subject to subdivision (a) of Section 17710.15, the merger shall be effective as to each domestic constituent limited liability company and domestic constituent other business entity unless another effective date is provided pursuant to Article 11 (commencing with Section 17711.01), with respect to any constituent corporation or constituent limited liability company.

(c) If the surviving entity is a foreign limited liability company or foreign other business entity, the merger shall become effective in accordance with the laws of the jurisdiction where the surviving limited liability company or surviving other business entity is organized, but shall be effective as to any domestic disappearing limited liability company as of the time of effectiveness in the foreign jurisdiction upon the filing in this state of a certificate of merger or agreement of merger pursuant to Section 17710.14.

(d) If a merger described in subdivision (c) or (d) also includes a foreign disappearing limited liability company previously registered for the transaction of intrastate business in this state pursuant to Section 17708.02, the filing of the certificate of merger or agreement of merger, as is applicable under Section 17710.14, automatically has the effect of a cancellation of registration for that foreign limited liability company pursuant to Section 17708.07 without the necessity of the filing of a certificate of cancellation.

(e) The provisions of subdivision (b) of Section 17710.12 and Article 11 (commencing with Section 17711.01) apply to the rights of the members of any of the constituent limited liability companies that are domestic limited liability companies and of any domestic limited liability company that is a parent of any foreign constituent limited liability company.

(f) If the surviving entity is a foreign limited liability company or foreign other business entity, the surviving entity shall file the following with the Secretary of State:

(1) An agreement that it may be served in this state in a proceeding for the enforcement of an obligation of any constituent entity and in a proceeding to enforce the rights of any holder of a dissenting interest or dissenting shares in a constituent domestic limited liability company or domestic other business entity.

(2) An irrevocable appointment of the Secretary of State as its agent for service of process, and an address to which process may be forwarded.

(3) An agreement that it will promptly pay the holder of any dissenting interest or dissenting share in a constituent domestic limited liability company or domestic other business entity the amount to which that person is entitled under the laws of this state.

merger proceedings domestic limited liability company foreign limited liability company ...

Section § 17710.18

This law explains that when a limited liability company (LLC), which could be from California or another state, merges with another business entity, it affects the ownership of any real estate they own in California. If the merger laws in the state where the LLC originates specify that the surviving company is given ownership of all real property from the now-defunct company, certain records need to be filed. Specifically, to confirm that the surviving company owns the property, a certificate or agreement of merger from the Secretary of State must be filed in the county where the property is located. This process ensures that the surviving LLC's ownership of the property is officially documented and recognized.

Whenever a domestic or foreign limited liability company or other business entity having any real property in this state merges with another limited liability company or other business entity pursuant to the laws of this state or of the state or place where any constituent limited liability company or constituent other business entity was organized, and the laws of the state or place of organization, including this state of any disappearing limited liability company or disappearing other business entity provide substantially that the making and filing of the agreement of merger or certificate of merger vests in the surviving limited liability company or surviving other business entity all the real property of any disappearing limited liability company and disappearing other business entity, the filing for record in the office of the county recorder of any county in this state where any of the real property of the disappearing limited liability company or disappearing other business entity is located of either of the following shall evidence record ownership in the surviving limited liability company or surviving other business entity of all interest of the disappearing limited liability company or disappearing other business entity in and to the real property located in that county in which both of the following occur:

(a) A certificate of merger certified by the Secretary of State, or other certificate prescribed by the Secretary of State.

(b) A copy of the agreement of merger or certificate of merger, certified by the Secretary of State or an authorized public official of the state or place pursuant to the laws of which the merger is effected.

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Section § 17710.19

When a merger occurs, the surviving company, whether domestic or foreign, automatically takes on the tax obligations of any company that ceases to exist as a result. This includes filing all required tax returns and paying due taxes for the disappearing company as per the California Revenue and Taxation Code. If the surviving entity is registered to do business in California, the Secretary of State must inform the Franchise Tax Board about the merger.

(a) Upon a merger pursuant to this article, a surviving domestic or foreign limited liability company or other business entity shall be deemed to have assumed the liability of each disappearing domestic or foreign limited liability company or other business entity that is taxed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code for the following:

(1) To prepare and file, or to cause to be prepared and filed, tax and information returns otherwise required of that disappearing entity as specified in Chapter 2 (commencing with Section 18501) of Part 10.2 of Division 2 of the Revenue and Taxation Code.

(2) To pay any tax liability determined to be due.

(b) If the surviving entity is a domestic limited liability company, domestic corporation, or registered limited liability partnership or a foreign limited liability company, foreign limited liability partnership, or foreign corporation that is registered or qualified to do business in this state, the Secretary of State shall notify the Franchise Tax Board of the merger.

merger tax obligations surviving entity disappearing company ...

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California Revised Uniform Limited Liability Company Act

California Revised Uniform Limited Liability Company ActMerger and Conversion