Question 1

What is a merger in Florida business law?

Accepted Answer

A merger is a transaction in which two or more business entities combine into a single entity. Under the Florida Business Corporation Act (Chapter 607) and the Florida Revised LLC Act (Chapter 605): one entity (the surviving entity) absorbs the other entity (the disappearing entity), the surviving entity succeeds to all assets, rights, and obligations of the disappearing entity, and the disappearing entity ceases to exist. Types of mergers: statutory merger (two corporations merge under Chapter 607), LLC merger (two LLCs merge under Chapter 605), cross-entity merger (a corporation merges with an LLC, permitted under Section 607.1108), and short-form merger (a parent corporation merges with a 90%+ owned subsidiary without shareholder approval of the subsidiary).

Question 2

What approvals are required for a merger in Florida?

Accepted Answer

Approvals: for corporations (Section 607.1103): the board of directors of each corporation must adopt a plan of merger, the shareholders of each corporation must approve the plan (typically by a majority of voting shares, unless the articles require a higher percentage), and articles of merger must be filed with the Florida Division of Corporations. For LLCs (Section 605.1023): the members must approve the plan of merger (typically by the percentage specified in the operating agreement, or by all members if the operating agreement is silent), and a certificate of merger must be filed with the Division of Corporations. Exceptions: short-form mergers (parent-subsidiary where parent owns 90%+) do not require subsidiary shareholder approval.

Question 3

What happens to the rights and obligations of merged entities in Florida?

Accepted Answer

Succession: the surviving entity: succeeds to all property, rights, and privileges of the disappearing entity (including real estate, contracts, intellectual property, and bank accounts), becomes responsible for all debts, obligations, and liabilities of the disappearing entity (including pending lawsuits and contingent liabilities), and continues as the same entity for legal purposes (no new entity is created; the surviving entity is the same legal entity with the combined assets and liabilities). Creditors of the disappearing entity become creditors of the surviving entity. Employees of the disappearing entity typically become employees of the surviving entity (though employment terms may change).

Merger

Mergers in Florida Business Law

Types

Approvals

Succession

Related Terms

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