§ 325. Approval by limited liability company.
(a) Proposal of plan in manager-managed company.--Except as provided in the organic rules or where the approval of the managers is unnecessary under section 330 (relating to alternative means of approval of transactions), a plan shall be proposed, in the case of a manager-managed, domestic limited liability company, by the adoption by the managers of a resolution approving the plan. Except where the approval of the members of a manager-managed, domestic limited liability company is unnecessary under this chapter or the organic rules, the plan shall be submitted to a vote of the members entitled to vote thereon at a regular or special meeting of the members.
(b) Notice of meeting of members.--Except as provided in the organic rules:
(1) Notice in record form of the meeting of members of a domestic limited liability company that will act on the proposed plan shall be given to each member of record, whether or not entitled to vote thereon, of each domestic limited liability company that is a party to the transaction under the plan.
(2) There shall be included in or enclosed with the notice a copy of the proposed plan or a summary thereof.
(3) The notice shall state that a copy of the organic rules of the surviving, acquired, converted, new or resulting association or domesticated entity as they will be in effect immediately following the transaction will be furnished to any member of the company giving the notice on request and without cost.
(c) Adoption of plan by members.--A plan:
(1) Except as provided in the organic rules, shall be adopted upon receiving a majority of the votes cast by all members, if any, entitled to vote thereon of each of the domestic limited liability companies that is a party to the transaction under the plan and, if any class of members is entitled to vote thereon as a class, a majority of the votes cast in each class vote.
(2) Except as provided in the organic rules or section 330, shall not be deemed to have been adopted by a manager-managed company unless it has also been approved by the managers, regardless of the fact that the managers have directed or suffered the submission of the plan to the members for action.
(d) Merger by action of managers only.--Unless otherwise required by a provision of the organic rules in record form, a plan of merger shall not require the approval of the members of a manager-managed, domestic limited liability company and shall be deemed adopted by the company when a resolution approving the plan has been adopted by the managers pursuant to subsection (a) if:
(1) Whether the company is the surviving association:
(i) the surviving association is a domestic limited liability company and its organic rules are identical to the organic rules of the limited liability company that is party to the merger, except for changes that could be made without action by the members; and
(ii) each membership interest outstanding immediately prior to the effectiveness of the merger is to continue as or to be converted into, except as may be otherwise agreed by the holder thereof, an identical membership interest in the surviving association after the effectiveness of the merger.
(2) The plan of merger provides for the merger of the company (referred to in this paragraph as the "constituent company") with or into a single indirect wholly owned subsidiary (referred to in this paragraph as the "subsidiary company") of the constituent company if all of the following provisions are satisfied:
(i) The constituent company and the subsidiary company are the only parties to the merger, other than a surviving association that is created in the merger.
(ii) Each interest of the constituent company outstanding immediately prior to the effectiveness of the merger is converted in the merger into an interest of a holding company having the same designations, rights, powers and preferences and the qualifications, limitations and restrictions as the interest of the constituent company being converted in the merger.
(iii) The holding company and the surviving association are each domestic limited liability companies.
(iv) Immediately following the effectiveness of the merger, the certificate of organization and operating agreement of the holding company are identical to the certificate of organization and operating agreement of the constituent company immediately before the effectiveness of the merger, except for changes that could be made without member approval pursuant to Chapter 89 (relating to limited liability companies).
(v) Immediately following the effectiveness of the merger, the surviving association is a direct or indirect wholly owned subsidiary of the holding company.
(vi) The managers of the constituent company become or remain the managers of the holding company on the effectiveness of the merger.
(vii) The managers of the constituent company have made a good faith determination that the members of the constituent company will not recognize gain or loss for United States Federal income tax purposes.
(viii) As used in this paragraph only, the term "holding company" means a limited liability company that, from its formation until consummation of the merger governed by this paragraph, was at all times a direct wholly owned subsidiary of the constituent company and interests in which are issued in the merger.
(e) Cross reference.--See section 3304(b) (relating to election of benefit corporation status).
Cross References. Section 325 is referred to in section 320 of this title.
Section: Previous 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 NextLast modified: October 8, 2016