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PAG LIN
1 1 SENATE FILE 2399
1 2
1 3
1 4 AN ACT
1 5 PROVIDING FOR THE MERGER OF A LIMITED PARTNERSHIP WITH
1 6 OTHER BUSINESS ENTITIES.
1 7
1 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 9
1 10 Section 1. NEW SECTION. 487.1201 MERGER.
1 11 1. Any one or more limited partnerships may merge with or
1 12 into any one or more limited partnerships, limited liability
1 13 companies, or corporations, provided that no limited partner
1 14 of a limited partnership that is a party to the merger will,
1 15 as a result of the merger, become personally liable for the
1 16 liabilities or obligations of any other person or entity
1 17 unless that limited partner approves the plan of merger or
1 18 otherwise consents to becoming personally liable.
1 19 2. Unless otherwise provided in the partnership agreement,
1 20 each domestic limited partnership which is to merge must
1 21 approve the merger by approval of all general partners, and by
1 22 limited partners who own more than fifty percent of the then
1 23 current percentage or other interest in the profits of the
1 24 domestic limited partnership owned by all of the limited
1 25 partners. If more than one class or group of limited partners
1 26 exists, the merger must be approved by the limited partners in
1 27 each class or group who own more than fifty percent of the
1 28 then current percentage or other interest in the profits of
1 29 the domestic limited partnership owned by all of the limited
1 30 partners of such class or group.
1 31 3. In connection with a merger under this section, rights
1 32 or securities of, or interests in, a limited partnership,
1 33 limited liability company, or corporation which is a
1 34 constituent party to the merger may be exchanged for or
1 35 converted into cash, property, rights, or securities of, or
2 1 interest in, a limited partnership, limited liability company,
2 2 or corporation which is the surviving entity or, in addition
2 3 to or in lieu of such cash, property, rights, securities, or
2 4 interests, may be exchanged for or converted into cash,
2 5 property, rights, or securities of, or interest in, a limited
2 6 partnership, limited liability company, or corporation other
2 7 than the surviving entity.
2 8 Sec. 2. NEW SECTION. 487.1202 PLAN OF MERGER.
2 9 1. Each constituent party to the merger must enter into a
2 10 written plan of merger, which must be approved in accordance
2 11 with section 487.1203.
2 12 2. The plan of merger must set forth all of the following:
2 13 a. The name of each constituent party to the merger and
2 14 the name of the surviving entity into which each other
2 15 constituent party proposes to merge.
2 16 b. The terms and conditions of the proposed merger.
2 17 c. The manner and basis of converting the interests in
2 18 each constituent party to the merger into interests, shares,
2 19 or other securities or obligations of the surviving entity, or
2 20 of any other entity, or, in whole or in part, into cash or
2 21 other property.
2 22 d. Such amendments to the certificate of limited
2 23 partnership of a limited partnership, articles of organization
2 24 of a limited liability company, or articles or certificate of
2 25 incorporation of a corporation, as the case may be, of the
2 26 surviving entity as are desired to be effected by the merger,
2 27 or that such changes are not desired.
2 28 e. Other provisions relating to the proposed merger as are
2 29 deemed necessary or desirable.
2 30 Sec. 3. NEW SECTION. 487.1203 ACTION ON PLAN.
2 31 1. A proposed plan of merger complying with the
2 32 requirements of section 487.1202 shall be approved in the
2 33 manner provided by this section:
2 34 a. A limited partnership which is a party to a proposed
2 35 merger shall have the plan of merger authorized and approved
3 1 in the manner and by the vote required in section 487.1201.
3 2 b. A limited liability company which is a party to a
3 3 proposed merger shall have the plan of merger authorized and
3 4 approved as required by chapter 490A.
3 5 c. A corporation which is a party to a proposed merger
3 6 shall have the plan of merger authorized and approved in the
3 7 manner and by the vote required by chapter 490.
3 8 2. After a merger is authorized, unless the plan of merger
3 9 provides otherwise, and at any time before articles of merger
3 10 as provided for in section 487.1204 are filed, the plan of
3 11 merger may be abandoned subject to any contractual rights, in
3 12 accordance with the procedure set forth in the plan of merger
3 13 or, if none is set forth, in one of the following ways:
3 14 a. By the limited partners of any limited partnership that
3 15 is a constituent party as provided in section 487.1201.
3 16 b. By the majority consent of the members of each limited
3 17 liability company that is a constituent party, unless the
3 18 articles of organization or an operating agreement of such
3 19 limited liability company provides otherwise.
3 20 c. In the manner determined by the board of directors of
3 21 any corporation that is a constituent entity.
3 22 Sec. 4. NEW SECTION. 487.1204 ARTICLES OF MERGER.
3 23 1. After a plan of merger is approved as provided in
3 24 section 487.1203, the surviving entity shall deliver to the
3 25 secretary of state for filing articles of merger duly executed
3 26 by each constituent party setting forth all of the following:
3 27 a. The name of each constituent party.
3 28 b. The plan of merger.
3 29 c. The effective date of the merger if later than the date
3 30 of filing of the articles of merger.
3 31 d. The name of the surviving entity.
3 32 e. A statement that the plan of merger was duly authorized
3 33 and approved by each constituent party as provided in section
3 34 487.1203.
3 35 2. A merger takes effect upon the later of the effective
4 1 date of the filing of the articles of merger or the date set
4 2 forth in the plan of merger.
4 3 Sec. 5. NEW SECTION. 487.1205 EFFECT OF MERGER.
4 4 When a merger takes effect all of the following apply:
4 5 1. Every other constituent party merges into the surviving
4 6 entity and the separate existence of every constituent party
4 7 except the surviving entity ceases.
4 8 2. The title to all real estate and other property owned
4 9 by each constituent party is vested in the surviving entity
4 10 without reversion or impairment.
4 11 3. The surviving entity has all liabilities of each
4 12 constituent party.
4 13 4. A proceeding pending against any constituent party may
4 14 be continued as if the merger did not occur or the surviving
4 15 entity may be substituted in the proceeding for the
4 16 constituent party whose existence ceased.
4 17 5. The articles or limited partnership agreement of the
4 18 surviving entity are amended to the extent provided in the
4 19 plan of merger.
4 20 6. The shares or interests of each constituent party that
4 21 are to be converted into shares, obligations, or other
4 22 securities of the surviving or any other entity or into cash
4 23 or other property are converted, and the former holders of the
4 24 shares or interests are entitled only to the rights provided
4 25 in the articles of merger except for dissenters' rights
4 26 provided by law.
4 27 7. Except as provided by agreement with a person to whom a
4 28 general partner of a limited partnership is obligated, a
4 29 merger of a limited partnership that has become effective
4 30 shall not affect any obligation of liability existing at the
4 31 time of such merger of a general partner of a limited
4 32 partnership which is merging.
4 33 8. If a limited partnership is a constituent party to a
4 34 merger that becomes effective, but the limited partnership is
4 35 not the surviving entity of the merger, a judgment creditor of
5 1 a general partner of such limited partnership may not levy
5 2 execution against the assets of the general partner to satisfy
5 3 a judgment based on a claim against the surviving entity of
5 4 the merger unless any of the following applies:
5 5 a. A judgment based on the same claim has been obtained
5 6 against the surviving entity of the merger and a writ of
5 7 execution on the judgment is returned unsatisfied in whole or
5 8 in part.
5 9 b. The surviving entity of the merger is a debtor in
5 10 bankruptcy.
5 11 c. The general partner agrees that the creditor need not
5 12 exhaust the assets of the limited partnership that was not the
5 13 surviving entity of the merger.
5 14 d. The general partner agrees that the creditor need not
5 15 exhaust the assets of the surviving entity of the merger.
5 16 e. A court grants permission to the judgment creditor to
5 17 levy execution against the assets of the general partner based
5 18 on a finding that the assets of the surviving entity of the
5 19 merger that are subject to execution are clearly insufficient
5 20 to satisfy the judgment, that exhaustion of the assets of the
5 21 surviving entity of the merger is excessively burdensome, or
5 22 that the grant of permission is an appropriate exercise of the
5 23 court's equitable powers.
5 24 f. Liability is imposed on the general partner by law or
5 25 contract independent of the existence of the surviving entity
5 26 of the merger.
5 27 Sec. 6. NEW SECTION. 487.1206 MERGER WITH FOREIGN
5 28 ENTITY.
5 29 1. Any one or more limited partnerships of this state may
5 30 merge with or into one or more foreign limited partnerships,
5 31 foreign limited liability companies, or foreign corporations,
5 32 or any one or more foreign limited partnerships, foreign
5 33 limited liability companies, or foreign corporations may merge
5 34 with or into any one or more limited partnerships of this
5 35 state, if all of the following apply:
6 1 a. The merger is permitted by the law of the state or
6 2 jurisdiction under whose law each foreign constituent party is
6 3 organized or formed and each foreign constituent party
6 4 complies with that law in effecting the merger.
6 5 b. The foreign constituent party complies with section
6 6 487.1204 if it is the surviving entity.
6 7 c. Each domestic constituent party complies with the
6 8 applicable provisions of sections 487.1202 and 487.1203 and,
6 9 if it is the surviving entity, with section 487.1204.
6 10 2. Upon a merger involving one or more domestic limited
6 11 partnerships taking effect, if the surviving entity is to be
6 12 governed by the law of any state other than this state or of
6 13 any foreign country, the surviving entity shall agree to both
6 14 of the following:
6 15 a. That it may be served with process in this state in any
6 16 proceeding for enforcement of any obligation of any
6 17 constituent party to the merger that was organized under the
6 18 law of this state, as well as for enforcement of any
6 19 obligation of the surviving entity arising from the merger.
6 20 b. To irrevocably appoint the secretary of state as its
6 21 agent for service of process in any such proceeding, and the
6 22 surviving entity shall specify the address to which a copy of
6 23 the process shall be mailed to it by the secretary of state.
6 24 3. The effect of the merger shall be as provided in
6 25 section 487.1205, if the surviving entity is to be governed by
6 26 the law of this state. If the surviving entity is to be
6 27 governed by the law of any jurisdiction other than this state,
6 28 the effect of the merger shall be the same as provided in
6 29 section 487.1205, except insofar as the law of the other
6 30 jurisdiction provides otherwise.
6 31
6 32
6 33 MARY E. KRAMER
6 34 President of the Senate
6 35
7 1
7 2
7 3 RON J. CORBETT
7 4 Speaker of the House
7 5
7 6 I hereby certify that this bill originated in the Senate and
7 7 is known as Senate File 2399, Seventy-seventh General Assembly.
7 8
7 9
7 10
7 11 MARY PAT GUNDERSON
7 12 Secretary of the Senate
7 13 Approved , 1998
7 14
7 15
7 16
7 17 TERRY E. BRANSTAD
7 18 Governor
Text: SF02398 Text: SF02400 Text: SF02300 - SF02399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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