Topic:
CORPORATE MERGERS; NON-PROFIT ORGANIZATIONS; RELIGIOUS GROUPS;
Location:
NONPROFIT ORGANIZATIONS;

OLR Research Report


January 2, 2008

 

2008-R-0011

MERGER OF NON-PROFIT CORPORATIONS

By: George Coppolo, Chief Attorney

You asked us to summarize three statutes relating to the formation of religious corporations and associations and the merger of non-profit corporations.

SUMMARY

You asked us to summarize three statutes. The first authorizes three or more people to form a corporation or a voluntary association for public worship (CGS 33-264a). The second authorizes non-profit corporations to merge. It establishes certain standards and requirements that apply to such mergers (CGS 33-1155). The third requires a certificate of merger to be created and filed with the secretary of the state's office to complete such a merger. It establishes certain standards that must be complied with (CGS 33-1157).

FORMATION OF RELIGIOUS CORPORATION OR SOCIETY

The law authorizes three or more persons who come together for public worship to form a corporation or a voluntary association (CGS 33-264a). The corporation must be called a religious corporation and the voluntary association must be called a religious society. The law specifies that this specific authorization does not prohibit the formation for the purpose of public or private worship of a corporation, association, or other organization of any kind as authorized by any other statutory provision. For example, CGS 33-265 to 33-281c grant certain powers and establish certain standards for certain religious denominations.

NON-PROFIT CORPORATION MERGERS

The law authorizes one or more corporations to merge with another corporation pursuant to a merger plan. The law specifies that a survivor corporation of a merger may pre-exist the merger or be created by the merger. The law defines a “survivor” as the corporation into which one or more other corporations are merged (CGS 33-1155(a)).

The law requires a merger plan to include:

1. the name of each corporation that will merge and the name of the corporation that will be the survivor of the merger;

2. the terms and conditions of the merger;

3. if the membership, if any, of any corporation is to be converted into membership of the survivor, the manner and basis of doing so;

4. the certificate of incorporation of any corporation to be created by the merger or, if a new corporation is not to be created by the merger, any amendments to the survivor's certificate of incorporation; and

5. any other provisions required by the certificate of incorporation of any party to the merger (CGS 33-1155(b)).

The merger plan may include any other provisions relating to the merger that are not inconsistent with state law (CGS 33-1155(c)).

The terms of a merger plan may be made dependent on facts ascertainable outside the plan only if the facts are objectively ascertainable. The law specifies that “facts” include, but are not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation (CGS 33-1155(d)).

The merger plan may also include a provision that the plan may be amended before filing a certificate of merger with the secretary of the state. But, if the members of a corporation that is a party to the merger are required or permitted to vote on the plan, the plan must provide that, after the approval of the plan by such members, the plan may not be amended to change:

1. the amount or kind of memberships to be received by the members of the corporation upon conversion of their memberships under the plan;

2. the certificate of incorporation of any corporation that will survive or be created as a result of the merger, except for changes permitted by state law; or

3. any of the other terms or conditions of the plan if the change would adversely affect such members in any material respect.

CERTIFICATE OF MERGER

After a merger plan has been adopted and approved as required by state law, a certificate of merger must be executed on behalf of each party to the merger by any officer or other duly authorized representative of such party. The certificate of merger must set forth:

1. the names of the parties to the merger;

2. the name of the corporation that will be the survivor of the merger;

3. the date on which the merger is to be effective;

4. if the certificate of incorporation of the survivor of the merger is amended, or if a new corporation is created as a result of the merger, the amendments to the survivor's certificate of incorporation or the certificate of incorporation of the new corporation;

5. if the plan of merger required approval by the members of the corporation, a statement that the plan was duly approved by the members and, if voting by any separate class of members was required, by each such separate class of members, in the manner required by state law and the certificate of incorporation; and

6. if the plan of merger did not require approval by the members of the corporation, a statement to that effect (CGS 33-1157(a)).

The law requires the certificate of merger to be delivered to the secretary of the state for filing by the survivor of the merger and to take effect on the merger's effective date (CGS 33-1157(b)).

GC:ts