—S ig MERGER AND CONSOLIDATION TITLE IX MERGER AND CONSOLIDATION a corporation that purchas gxompli ation The steps th Corporation Code, are: : . orporation draws UP a plan oy (a) The board oS eat must include any amendment" nett ia consolidation. ration ofthe surviving corporatign "Ces a P . tothe are ner te datements required in the 4C°ing of consolidation, mn. incorporation of er yalders or members of each i (2) Submission ng mus be called and atleast tweni for approval. A meeting M™ holders or members,» 0"* (2 days’ notice must be sent tal stock vo ‘mbers, Persona or by registered mail. A summary of the pl ea must be attached to. y notice, Vote of two-thirds of the members or of Stockholgg? representing two-thirds ofthe outstanding capital stock wil} be needs Appia igh, when prope, mst be respected. (@) Execution of the formal agreement, referred to as the artic ‘merger or consolidation, by the corporate officers of pa constituent corporation. These take the place of the aria” incorporation ofthe consoled corporation, or amend the ar of incorporation ofthe surviving corporation. (4) Submission of said artcls of merge or consolidation to the set fy approval. (5) If upon investigation, the Commission has reason to beli Proposed merger or consolidation is contrary to or inconsistent wie the provisions of this Code or existing laws, it shall set a hearing give the corporations concerned the opportunity to be heard, (6) Issuance of certificate of merger or consolidation. Po} leve that the Clearly, the merger shall only be effective upon the issuance of 2 Certificate of merger by the SEC, subject to its prior determination that the merger is not inconsistent with the Corporation Code or existing laws. Where 2 party to the merger is a special corporation governed by its own charter, the Code particularly mandates that a favorable recommendation of the appropriate government agency should first be obtained.® Consolidation becomes members but only u SEC. When the SE consolidation, effective not upon mere agreement of the ipon issuance of the certificate of consolidation by the {C, upon processing and examining the articles : is satisfied that the consolidation of the corporations is ™ inconsistent with the provisions of the Corporation Code and existing ai z issues a certificate of consolidation which makes the reorganiZ’ aa eae coco ree 1200 * see Mindanao Savings and Loan Associaton Inc, v Edward Witkom, etal GR. No. 178618, Octobe 396 |UX MERGER AND CONSOLIDATION nl consolidated corporation comes into existence and the he new tions dissolve and cease to exist. corporal wl sti 79. Effects of Merger or Consolidation, - Th shall have the following effects: merger or sec. soaation The constituent corporations shall become a single on which, in case of merger, shall be the designated in the plan of merger; and, in ¢ lidation, shall be the consolidated corporation designated in the plan of consolidation; (by The separate existence of the constituent corporations shall cease, except that of the surviving or the consolidated corporation; The surviving or the consolidated corporation shall possess all the rights, privileges, immunities, and powers and shall be subject to all the duties and liabilities of a corporation organized under this Code; (a) The surviving or the consolidated corporation shall possess all the rights, privileges, immunities and franchises of each constituent corporation; and all real or personal property, all receivables due on whatever account, including subscriptions to shares and other choses in action, and every other interest of, belonging, to, or due to each constituent corporation, shall be deemed transferred to and vested in such surviving or consolidated corporation without further act or deed; and (e) The surviving or consolidated corporation shall be | responsible for all the liabilities and obligations ofeach constituent corporation as though such surviving or Consolidated corporation had itself incurred such liabilities or obligations; and any pending claim, action or proceeding brought by or against any constituent corporation may be prosecuted by or against the surviving or consolidated corporation. The rights of treditors or liens upon the property of such constituent Corporations shall not be impaired by the merger or consolidation. @) 1g corporations, one ues the combined ights, properties and he inary, im the merger of two oF more existing {288 combining corporations survives and_ con! ites, while the rest are dissolved and all their eos teeee ee 19,1997 "oe M.Lezan vs. Hon, Eliezer R. De Los Santos ax! Antonio Anda, GR. No, 125221, June 397es cONSOLIDATION [TITLE IK - MERGER AND ‘ tion. Altho, ing corporal ugh the survivi Fi ere, ired there is no windi e liabilities are ae orbed corpo use he surviving? of Na dissolution of f their assets, Corp th : ol ers, . affairs oF ligation | of or gts prvleges and powers, a5 yo = automatically a liabilities. aig the, fective does not become e upon ‘The merge: Howes porations. he procedure to ie fori ee see oft cost PTE son 79 of saig celowet, Laie ee a Corporation Code) requires the approyay Noy, Sosues and chang! Commisan (SE) ofthe articles of merger whieyt : wed by a majority of the ith turn, must have been duly appro : espe stockholders of the constituent corporations. The same provision funk states thatthe merger shall be efectve only upon the issuance by thew 2 crate of marge The fet date of the merger is crugae determining when the merged or absorbed corporation ceases to ey when rights, rvs, properties as wel as abilities pass gn et surviving corporation? ‘The issuance ofthe certificate of merger is crucial because does it bear out SECs approval but it also marks the mom consequences of amerger tke place. By operation of law, upon the effets, of the merger, the absorbed corporation ceases to exist but its rights ox Properties, as well as labltes, shall be taken and deemed transferred and vested in the: ‘surviving corporation? ot only }ent when the , Upon processing ad a olidation, is satisfied that the consolidation of the corporations JS Rot inconsistent with the provisions of the Corporatia '¢ and existing laws, it issues a certificate of hi Sh makes the feorganiaties nan te of consolidation whic is icial The new consolidated ition comes into existence and the constituent corporat jalan a tions are dissolved and cease to existi g1X- MERGER AND CONSOLIDATgy nu In July 2000, A Bank mer wing corporation, When B Goes » with B Corp. as the ond the Software System torte 2 peratons ok Ba Rrmed SomWwAre Corp, of ite via, operations, and ggreement and to stop further Payments there; pone cae falure of B Corp. to pay its obligat r the agreemone 4 femands, Software Corp. filed a compin rane In its complaint, Software Corp. aller caporation not doing business in the Philip ssolated transaction, Pursuant to the gystem in A Bank’s computers for jieense fee. A Bank also undertook services. Is B Corp. liable? Answer? Due to B Corp.'s merger with A Bank surviving corporation, i and because it is the as ifit was the one which entered into contract with Software Corp. In the merger of two existi ing corporations, one of the corporations survives and continues the business, while the other ‘sdissolved, and all its rights, properties, and liabilities are acquired by the surviving corporation. This is Particularly true in this case. Under the terms of the merger or consolidation, B Corp. assumed all the liabilities and obligations of A Bank as if it had incurred such liabilities or obligations itself. In the same way, B Corp. also has the right to exercise all defenses, rights, privileges, and counter-claims of every kind and nature which A Bank may have or invoke under the law.? "bil Basines Holdings, Inc vs, Surecomp Software, BV, GR. No 173463, October 13,2010 399 bw