I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Barrister... That's right, Barrister; I graduated from law school and took the Bar Exams, now I'm waiting for the results. I created this blog to make Philippine Law easy to understand for the average person. It's all about free legal advice. There are many law blogs. But the problem is that many of them are written for lawyers and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most human beings because of their knowledge of the law. It bothers me since the law is supposed to serve society. Since the law is meant to serve society as a whole, it is important that is must be understood by everybody.
This does not mean that we should all become lawyers. It means that although law is a highly specialized profession, the first duty of everybody in this profession is to make the law understandable to all; that's why all these articles are free legal advice.
Like I said, this blog is about law -but it's for the ordinary people, not the lawyers. It's for the ordinary folk so they will know what is good and bad for them, and that making them aware of the law will help us all improve society as a whole. This is free legal advice for everybody!
A merger takes place when one corporation absorbs another. Consolidation happens when 2 or more corporations combine and a new corporate entity is created. Neither become effective by mere agreement of the corporations entering into them; what is important is SEC approval.
Steps
1.) The boards of each corporation will draw up a merger/consolidation plan that includes the names of the corporations involved, the terms and mode of carrying out the merger/consolidation and a statement of changes, if any, in the articles of the new corporation (consolidation) or absorbing one (merger.)
2.) The plan must be approved by a majority vote of each board at separate meetings and by the stockholders representing 2/3 of the outstanding capital stock or, in case of non-stock corporations, 2/3 of the members. Dissenting stockholders can exercise their appraisal rights.
3.) Amendments to the plan itself must be made with the approval of the majority of the board members of each corporation and by the stockholders representing 2/3 of the outstanding capital stock or 2/3 of members for non-stock corporations.
4.) Each corporation shall execute the articles of merger/consolidation, which will be signed by each president and vice-president and certified by the secretary/assistant secretary and shall set forth the plan of merger/consolidation, the number of outstanding shares (stock corporation) or number of members (non-stock corporation) and, for each corporation, the number of shares/members who voted for or against the the plan.
5.) The corporations must submit 4 copies of the articles of merger/consolidation to the SEC. The merger of banks, insurance companies, building and loan associations, trust companies, public utilities, educational institutions and other special corporations requires a favorable recommendation from the appropriate government agency.
6.) The SEC will conduct a hearing, if necessary. After the hearing, it will issue a certificate of merger/consolidation. The date of issuance of the certificate will be the date of the merger.
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