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Most statutes provide that a majority vote is needed to approve a merger, consolidation, or share exchange, unless otherwise provided in the articles of incorporation. After shareholder approval has been obtained, articles of merger, consolidation, or share exchange must be filed with the appropriate state official.
First, the corporation's board of directors must approve the plan of merger, consolidation, or share exchange. The plan must set forth the terms and conditions of the proposed transaction. Next, the merger plan usually is submitted to the corporation's shareholders for their approval.
The premerger notification form is part of the premerger review process established by the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Under this process, large mergers must be reported at least 30 days prior to closing.
Before the merger ever happens, the shareholder/s must give the fair market value of the shares she/he/they own in the company. In short, a statutory merger must adhere to the well-being of both the parties- shareholders and business.
Both terms often refer to the joining of two companies, but there are key differences involved in when to use them. A merger occurs when two separate entities combine forces to create a new, joint organization. Meanwhile, an acquisition refers to the takeover of one entity by another.
Mergers are transactions involving the combination of generally two or more companies into a single entity. The need for shareholder approval of a merger is governed by state law. Typically, a merger must be approved by the holders of a majority of the outstanding shares of the target company.
The boards of directors of all involved corporations must approve the merger or consolidation plan.
The plan of merger or consolidation must be approved by a majority vote of each of the board of directors or trustees of the constituent corporations, party to the merger or consolidation.