15 Pa.C.S. § 3 Incorporation and requirements of educational corporations (Repealed).
1990 Repeal. Section 3 was repealed December 19, 1990, P.L.834, No.198, effective immediately.
15 Pa.C.S. Ch. 3
15 Pa.C.S. Ch. 3
in effect15 Pa.C.S. § 301 Transitional provisions (Repealed).
1990 Repeal. Section 301 was repealed December 19, 1990, P.L.834, No.198, effective immediately.
15 Pa.C.S. § 303 Preparation of act for printing.
In editing and preparing this act for printing in the Laws of Pennsylvania, or pursuant to 1 Pa.C.S. Ch. 5 (relating to official publication of the Consolidated Statutes), the Director of the Legislative Reference Bureau shall insert the date of enactment, pamphlet law page number and act number of this act in the appropriate blanks of the enrolled bill version of this act, without obtaining the approvals or marking the notations required under 1 Pa.C.S. § 1105 (relating to editing statutes for printing).
15 Pa.C.S. § 304 Effective date and applicability.
(a) Effective date.--This act shall take effect October 1, 1989, except that:
(1) Sections 101, 104, 301, 303 and 304 shall take effect immediately.
(2) The following provisions of Title 15 and as much of the act as may be necessary to make those provisions operative shall take effect immediately and shall be retroactive to January 27, 1987, insofar as relates to the
implementation of 42 Pa.C.S. Ch. 83 Subch. F (relating to corporate directors' liability): 15 Pa.C.S. § 1102(b) (relating to coordination with other laws), 15 Pa.C.S. § 1310(a) (relating to organization meeting), 15 Pa.C.S. § 1504(c) (relating to bylaw provisions in articles), 15 Pa.C.S. § 1757(a) (relating to action by shareholders), 15 Pa.C.S. § 1762(c) (relating to controlled shares) and 15 Pa.C.S. § 1766 (relating to consent of shareholders in lieu of meeting).
(3) The amendment to 54 Pa.C.S. § 311(b)(1) (relating to use of corporate designators) shall take effect immediately and shall be retroactive to March 16, 1983.
(4) Section 138 (relating to statement of correction) of Title 15 shall take effect immediately and shall be retroactive to January 1, 1980, insofar as relates to filings under the Business Corporation Law of 1933. With respect to matters covered by this paragraph, the one-year period of the last sentence of 15 Pa.C.S. § 138(c) shall run from the later of the date of enactment of this act or the date upon which such filing was or is made by or with respect to a corporation subject to the Business Corporation Law of 1933.
(5) Section 302(e), insofar as it repeals 59 Pa.C.S. Ch. 5 (relating to limited partnerships), and section 103, insofar as it enacts 15 Pa.C.S. § 8502(a) (relating to applicability of chapter to existing limited partnerships), shall take effect 90 days after the Governor publishes a proclamation in the Pennsylvania Bulletin stating that the Governor has found that the United States Internal Revenue Service has determined that 15 Pa.C.S. Ch. 85 (relating to limited partnerships) corresponds to the Uniform Limited Partnership Act for purposes of 26 C.F.R. § 301.7701-2. The Governor shall issue such a proclamation upon being furnished with a copy of a ruling by the Internal Revenue Service to that effect. Delay in the repeal of 59 Pa.C.S. Ch. 5 and enactment of 15 Pa.C.S. § 8502(a) shall not postpone the effective date of 15 Pa.C.S. Ch. 85, and pending repeal of 59 Pa.C.S. Ch. 5, persons may utilize either statute at their election, which shall be expressed in the partnership agreement, for the government and regulation of the affairs of the limited partnership. A partnership agreement that fails to identify expressly the statute applicable to the partnership shall be deemed to contain an election to be governed by 59 Pa.C.S. Ch. 5. On the effective date of the repeal of 59 Pa.C.S. Ch. 5, any partnership then governed by that chapter shall thereafter be governed by 15 Pa.C.S. Ch. 85.
(6) (Repealed).
(7) The amendments to 15 Pa.C.S. Ch. 87 (relating to electing partnerships) shall take effect immediately and shall be retroactive to July 10, 1981.
(8) Section 103, insofar as it enacts 15 Pa.C.S. Ch. 77 (relating to workers' cooperative corporations), shall take effect in 180 days.
(b) Applicability.--(Repealed). 1994 Proclamation. The proclamation of the Governor referred to in section 304(a)(5) was published in the Pennsylvania Bulletin on June 18, 1994, at 24 Pa.B. 3001 and is set forth in full in this appendix. 1990 Repeal. Subsections (a)(6) and (b) were repealed December 19, 1990, P.L.834, No.198, effective immediately.
References in Text. 42 Pa.C.S. Ch. 83 Subch. F (relating to corporate directors' liability), referred to in subsec. (a), was repealed by the act of December 19, 1990, P.L.834, No.198. The subject matter is now contained in Subchapter B of Chapter 5, Subchapter B of Chapter 17 and Subchapter B of Chapter 57 of Title 15. 1990, APRIL 27, P.L.129, NO.36
15 Pa.C.S. § 309 Conforming cross references in unconsolidated statutes.
(a) Insurance Company Law.--References in the following act enacted prior to July 1, 1971 (see 1 Pa.C.S. § 1937 (relating to references to statutes and regulations)), to section 337.5 of the act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921, shall be deemed to be a reference to section 205 of this act and 15 Pa.C.S. § 1924(b)(1)(ii), and such act is repealed to the extent inconsistent with this subsection: section 337.6 of the act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921.
(b) Professional Association Act.--References in the following act enacted prior to July 1, 1971 (see 1 Pa.C.S. § 1937 (relating to references to statutes and regulations)), to the act of August 7, 1961 (P.L.941, No.416), known as the Professional Association Act, shall be deemed to be a reference to 15 Pa.C.S. Ch. 93 (relating to professional associations), and such act is repealed to the extent inconsistent with this subsection: sections 2, 8.4 and 8.6 of the act of May 26, 1947 (P.L.318, No.140), known as The C.P.A. Law.
(c) Electric Cooperative Corporation Act.--References in the following act enacted prior to July 1, 1971 (see 1 Pa.C.S. § 1937 (relating to references to statutes and regulations)), to the act of June 21, 1937 (P.L.1969, No.389), known as the Electric Cooperative Corporation Act, shall be deemed to be a reference to 15 Pa.C.S. Ch. 73 Subchs. A (relating to preliminary provisions) and B (relating to powers, duties and safeguards), and such act is repealed to the extent inconsistent with this subsection: sections 2471.1(b) and 2471.2(k) of the act of February 1, 1966 (1965 P.L.1656, No.581), known as The Borough Code, added by section 1 of the act of December 30, 1982 (P.L.1465, No.333).
15 Pa.C.S. § 311 Short title of chapter.
This chapter shall be known and may be cited as the Entity Transactions Law.
15 Pa.C.S. § 312 Definitions.
(a) Definitions.--The following words and phrases when used in this chapter shall have the meanings given to them in this subsection unless the context clearly indicates otherwise:
"Acquired association." The domestic entity or foreign association, all of one or more classes or series of interests in which are acquired in an interest exchange.
"Acquiring association." The domestic entity or foreign association that acquires all of one or more classes or series of interests of the acquired association in an interest exchange.
"Conversion." (Deleted by amendment).
"Converted association." The converting association as it continues in existence after a conversion.
"Converting association." The domestic entity or domestic banking institution that approves a plan of conversion pursuant to section 353 (relating to approval of conversion) or the foreign association that approves a conversion pursuant to the laws of its jurisdiction of formation.
"Dividing association." The domestic entity that approves a plan of division pursuant to section 363 (relating to approval of division) or 364 (relating to division without interest holder approval) or the foreign association that approves a division pursuant to the laws of its jurisdiction of formation.
"Division." (Deleted by amendment).
"Domesticated entity." The domesticating entity as it continues in existence after a domestication.
"Domesticating entity." The domestic entity that approves a plan of domestication pursuant to section 373(a) (relating to approval of domestication) or the foreign entity that approves a domestication pursuant to section 373(b).
"Domestication." (Deleted by amendment).
"Interest exchange." (Deleted by amendment).
"Interest holder liability." Either of the following:
(1) Personal liability for a liability of an association that is imposed on a person either:
(i) Solely by reason of the status of the person as an interest holder.
(ii) By the organic rules of the association that make one or more specified interest holders or categories of interest holders liable in their capacity as interest holders for all or specified liabilities of the entity.
(2) An obligation of an interest holder under the organic rules of an association to contribute to the association.
"Merger." (Deleted by amendment).
"Merging association." A domestic entity, domestic banking institution or foreign association that is a party to a merger under Subchapter C (relating to merger) and exists immediately before the merger becomes effective.
"New association." An association that is created by a division.
"Plan." A plan of merger, plan of interest exchange, plan of conversion, plan of division or plan of domestication, as applicable.
"Protected agreement." Either of the following:
(1) A record evidencing indebtedness and any related agreement in effect on July 1, 2015.
(2) A protected governance agreement.
"Protected governance agreement." Either of the following:
(1) The organic rules of a domestic entity or foreign association in effect on July 1, 2015.
(2) An agreement that is binding on any of the governors or interest holders of a domestic entity or foreign association on July 1, 2015.
"Registered office." In the case of a domestic banking institution that is a corporation, the principal place of business of the corporation set forth in its articles of incorporation as required by section 1004 of the act of November 30, 1965 (P.L.847, No.356), known as the Banking Code of 1965.
"Resulting association." A dividing association, if it survives the division, or a new association.
"Special treatment." A provision of a plan permitted by section 329 (relating to special treatment of interest holders).
"Surviving association." The domestic entity, domestic banking institution or foreign association that continues in existence after or is created by a merger under Subchapter C.
(b) Index of definitions.--Following is a nonexclusive list of definitions in section 102 (relating to definitions) that apply to this chapter: "Act" or "action."
"Banking institution."
"Conversion."
"Department."
"Dissenters rights."
"Division."
"Domestic entity."
"Domestication."
"Entity."
"Filing entity."
"Foreign entity."
"Governor."
"Interest."
"Interest exchange."
"Interest holder."
"Merger."
"Obligation."
"Organic law."
"Organic rules."
"Private organic rules."
"Property."
"Public organic record."
"Record form."
"Registered foreign association."
"Representative."
"Sign."
"Transfer."
"Type." (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (b) and deleted the defs. of "conversion," "division," "domestication," "interest exchange" and "merger" in subsec. (a). Cross References. Section 312 is referred to in section 221 of this title.
15 Pa.C.S. § 313 Relationship of chapter to other provisions of law.
A transaction under this chapter to which a business corporation is a party may not impair any right or obligation that a person has under, and may not make applicable or inapplicable to the corporation, any provision of section 2538 (relating to approval of transactions with interested shareholders) or 2539 (relating to adoption of plan of merger by board of directors) or Subchapters E (relating to control transactions), F (relating to business combinations), G (relating to control-share acquisitions), H (relating to disgorgement by certain controlling shareholders following attempts to acquire control), I (relating to severance compensation for employees terminated following certain control-share acquisitions) and J (relating to business combination transactions - labor contracts) of Chapter 25, nor shall it change the standard of care applicable to the directors under Subchapter B of Chapter 17 (relating to fiduciary duty) unless, in addition to the requirements of this chapter:
(1) If the corporation does not survive the transaction, the transaction satisfies any requirements of the provision applicable to the transaction.
(2) If the corporation survives the transaction, the approval of the transaction is by a vote of the shareholders or directors which would be sufficient to impair the right or obligation under the provision or make the provision applicable or inapplicable to the corporation or change the standard of care. A transaction that causes the corporation to cease to be a registered corporation or to cease to be a registered corporation described in a particular provision shall not be considered a transaction rendering the provision inapplicable to the corporation for purposes of this section.
(a) Antitakeover provisions.--(Deleted by amendment).
(b) Transitional provision.--(Deleted by amendment). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)
15 Pa.C.S. § 314 Regulatory conditions and required notices and approvals.
(a) Regulatory approvals.--If the law of this Commonwealth other than this chapter requires notice to or the approval of a governmental agency or officer of the Commonwealth in connection with the participation under an organic law that is not part of this title by a domestic or foreign association in a transaction which is a form of transaction authorized by this chapter, the notice must be given or the approval obtained by the association before it may participate in any form of transaction under this chapter.
(b) Certain regulated businesses.--A domestic converted association, domestic domesticated entity, domestic new association, domestic resulting association or domestic surviving association may not acquire as a result of a transaction under this chapter the power to engage in the business of banking, insurance or acting as a trust company unless an association of that type is authorized to have and exercise that power under the laws of this Commonwealth.
(c) Charitable assets.--Property held for a charitable purpose under the laws of this Commonwealth by a domestic or foreign association immediately before a transaction under this chapter becomes effective may not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised or otherwise transferred unless, to the extent required by or pursuant to the laws of this Commonwealth concerning cy pres or other laws dealing with nondiversion of charitable assets, the domestic or foreign association obtains an appropriate order of a court of competent jurisdiction specifying the disposition of the property.
(d) Preservation of transfers.--Subject to subsection (c) and section 5550 (relating to devises, bequests and gifts after certain fundamental changes), a bequest, devise, gift, grant or promise contained in a will or other instrument of donation, subscription or conveyance that is made to:
(1) a merging association that is not the surviving association and that takes effect or remains payable after the merger inures to the surviving association; and
(2) a dividing association may be allocated in the division as if it were an asset of the dividing association and, if the bequest, devise, gift, grant or promise takes effect or remains payable after the division, vests as provided in section 367(a)(4) (relating to effect of division).
(e) Trust obligations.--A trust obligation that would govern property:
(1) if transferred to a merging association that is not the surviving association applies to property that is transferred after a merger to the surviving association; and
(2) if transferred to a dividing association that is not a resulting association applies to property that is transferred after a division to a resulting association.
(f) Cross reference.--See section 318 (relating to excluded entities and transactions). (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days) 2016 Amendment. Act 170 amended subsec. (a), relettered and amended parts of subsec. (d) to subsec. (e) and relettered former subsec. (e) to subsec. (f). Cross References. Section 314 is referred to in sections 318, 331, 341, 351, 361, 371 of this title.
15 Pa.C.S. § 315 Nature of transactions.
(a) General rule.--The fact that a sale or conversion of the interests in or assets of an association or a transaction under this chapter or other law produces a result that could be accomplished in any other manner permitted by a different set of provisions of this chapter or other law shall not be a basis for recharacterizing the sale, conversion or transaction as a different form of sale, conversion or transaction under this chapter or other law.
(b) Business purpose not required.--A transaction under this chapter does not require an independent business purpose in order for the transaction to be lawful. (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days; July 15, 2024, P.L.728, No.59, eff. 60 days) 2024 Amendment. Act 59 amended subsec. (a). Cross References. Section 315 is referred to in section 1571 of this title.
15 Pa.C.S. § 316 Contents of plan.
(a) Omission of certain provisions.--A plan as delivered to the department for filing under any provision of this chapter in lieu of a statement of merger, statement of interest exchange, statement of conversion, statement of division or statement of domestication may omit all provisions of the plan except provisions, if any, that:
(1) are intended to amend or constitute the operative provisions of the public organic record of a domestic association as in effect subsequent to the effectiveness of the plan;
(2) are required by this chapter in the statement in lieu of which the plan is being delivered to the department for filing; or
(3) allocate or specify the respective property and liabilities of the resulting associations, in the case of a plan of division.
(b) Availability of full plan.--If any of the provisions of a plan are omitted from the plan as delivered to the department as permitted under subsection (a), the plan must state that the full text of the plan is on file at the principal office of the surviving, acquiring, converted, new or resulting association or domesticated entity and the address thereof. An association that takes advantage of this section shall furnish a copy of the full text of the plan, on request and without cost, to any interest holder of any domestic or foreign association that was a party to the plan.
(c) Reference to external facts.--A plan may refer to facts ascertainable outside of the plan if the manner in which the facts will operate on the plan is specified in the plan. The facts may include the occurrence of an event or a determination or action by a person, whether or not the event, determination or action is within the control of a party to the transaction. Cross References. Section 316 is referred to in sections 332, 335, 342, 352, 362, 372 of this title.
15 Pa.C.S. § 317 Contractual dissenters rights in entity transactions.
(a) General rule.--An interest holder of a domestic entity other than a nonprofit corporation or unincorporated nonprofit association shall be entitled to contractual dissenters rights in connection with a transaction under this chapter, even though the interest holder would not otherwise be entitled to dissenters rights under this title to the extent provided:
(1) in the entity's organic rules; or
(2) in the plan.
(b) Procedures for contractual dissenters rights.--If an interest holder is entitled to contractual dissenters rights pursuant to subsection (a), Subchapter D of Chapter 15 (relating to dissenters rights) applies to the extent practicable except as otherwise provided in the organic rules of the domestic entity or the plan.
(c) Cross references.--See sections 329 (relating to special treatment of interest holders) and 1571(c) (relating to application and effect of subchapter). Cross References. Section 317 is referred to in sections 333, 336, 343, 346, 353, 356, 363, 367, 373, 1571 of this title.
15 Pa.C.S. § 318 Excluded entities and transactions.
(a) Excluded entities.--The following entities may not participate in a transaction under this chapter:
(1) A cooperative corporation subject to Chapter 73 (relating to electric cooperative corporations).
(2) A beneficial, benevolent, fraternal or fraternal benefit society:
(i) having a lodge system and a representative form of government; or
(ii) transacting any type of insurance.
(3) A credit union.
(b) Excluded transactions involving certain nonprofit corporations.--The following apply to nonprofit corporations:
(1) Except as provided in paragraph (2), this chapter may not be used to accomplish a transaction that has the effect of converting a domestic nonprofit corporation that is subject to the supervision of the Department of Banking and Securities, the Insurance Department or the Pennsylvania Public Utility Commission to a different type of entity.
(2) Paragraph (1) does not apply to a transaction under this chapter in which a health maintenance organization is converted to a different type of entity if the transaction has received the prior approval of the Insurance Department.
(c) Cross references.--See sections 103 (relating to subordination of title to regulatory laws) and 314 (relating to regulatory conditions and required notices and approvals). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 added subsec. (a)(3). Cross References. Section 318 is referred to in sections 314, 331, 341, 351, 361, 371 of this title.
15 Pa.C.S. § 319 Party to plan or transaction.
An association that approves a plan in its capacity as an interest holder or creditor of a domestic or foreign association that is a party to the transaction under the plan, or that furnishes all or a part of the consideration contemplated by a plan, does not thereby become a party to the plan or the transaction under the plan for purposes of this chapter.
15 Pa.C.S. § 320 Submission of matters to interest holders.
(a) General rule.--A domestic association may agree, in record form, to submit a plan to its interest holders whether or not the governors determine, at any time after approving the plan, that the plan is no longer advisable and recommend that the interest holders reject or vote against it, regardless of whether the governors change their recommendation. If an association so agrees to submit a plan to its interest holders, the plan is deemed to have been validly adopted by the association when it has been approved by the interest holders.
(b) Cross references.--See sections 321(c) (relating to approval by business corporation) and 325(c)(2) (relating to approval by limited liability company).
15 Pa.C.S. § 321 Approval by business corporation.
(a) Proposal of plan.--Except where the approval of the board of directors is unnecessary pursuant to section 330 (relating to alternative means of approval of transactions), a plan shall be proposed in the case of a domestic business corporation by the adoption by the board of directors of a resolution approving the plan and, in the case of an offer referred to in subsection (f), recommending that the shareholders tender their shares to the offeror in response to the offer. Except where the approval of the shareholders is unnecessary under this chapter, the board of directors shall direct that the plan be submitted to a vote of the shareholders entitled to vote thereon at a regular or special meeting of the shareholders.
(b) Notice of meeting of shareholders.--Notice in record form of the meeting of shareholders that will act on the proposed plan must be given to each shareholder of record, whether or not entitled to vote thereon, of each domestic business corporation that is a party to the transaction under the plan. There shall be included in or enclosed with the notice a copy of the proposed plan or a summary thereof and any notice required by section 329 (relating to special treatment of interest holders). If the holders of shares of any class or series of shares are entitled to assert dissenters rights, the
notice must include or be accompanied by the text of the provision of this chapter granting dissenters rights and the text of Subchapter D of Chapter 15 (relating to dissenters rights). The notice must 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 shareholder of the corporation giving the notice on request and without cost.
(c) Shareholder vote required.--Except as provided in section 1757 (relating to action by shareholders) or subsection
(d) or (f), a plan shall be adopted by a domestic business corporation that is a party to the transaction under the plan upon receiving the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on the plan and, if any class or series of shares is entitled to vote thereon as a class, the affirmative vote of a majority of the votes cast in each class vote. The holders of any class or series of shares of a domestic business corporation that is a party to a transaction under a plan that would effect any change in the articles of the corporation shall be entitled to vote as a class on the plan if they would have been entitled to a class vote under the provisions of section 1914 (relating to adoption of amendments) had the change been accomplished under Subchapter B of Chapter 19 (relating to amendment of articles). Except as provided in section 330, a proposed plan shall not be deemed to have been adopted by a domestic business corporation unless it has also been approved by the board of directors, regardless of the fact that the board has directed or suffered the submission of the plan to the shareholders for action.
(d) Adoption of plan of merger without shareholder vote.--
(1) Unless otherwise required by the organic rules, a plan of merger shall not require the approval of the shareholders of a domestic business corporation that is a merging association if:
(i) whether or not the corporation is the surviving association:
(A) the surviving association is a domestic business corporation and its articles are identical to the articles of the corporation for which shareholder approval is not required, except for changes that could be made without shareholder approval pursuant to section 1914(c);
(B) each share of the corporation outstanding immediately prior to the effectiveness of the merger is to continue as or be converted into, except as may be otherwise agreed by the holder thereof, an identical share of the surviving association; and
(C) the plan provides that the shareholders of the corporation are to hold in the aggregate shares of the surviving association to be outstanding immediately after the effectiveness of the merger entitled to cast at least a majority of the votes entitled to be cast generally for the election of directors;
(ii) immediately prior to the adoption of the plan and at all times thereafter prior to the effectiveness of the merger, another association owns directly or indirectly 80% or more of the outstanding shares of each class of the corporation; or
(iii) no shares of the corporation have been issued prior to the adoption of the plan by the board of directors pursuant to subsection (a).
(2) If a merger is effected pursuant to paragraph (1)(i) or (iii), the plan shall be deemed adopted by the corporation when it has been adopted by the board of directors pursuant to subsection (a).
(3) If a merger of a subsidiary corporation is effected pursuant to paragraph (1)(ii), the plan shall be deemed adopted by the subsidiary corporation when it has been adopted by the governors of the parent association and neither approval of the plan by the board of directors of the subsidiary corporation nor signing of the statement of merger by the subsidiary corporation shall be necessary.
(4) Unless otherwise required by the organic rules, a plan of merger providing for the merger of a domestic business corporation (referred to in this paragraph as a "constituent corporation") with or into a single indirect wholly owned subsidiary (referred to in this paragraph as the "subsidiary corporation") of the constituent corporation shall not require the approval of the shareholders of either the constituent corporation or the subsidiary corporation if all of the following provisions are satisfied:
(i) A merger under this paragraph must satisfy the following conditions:
(A) The constituent corporation and the subsidiary corporation are the only parties to the merger, other than a surviving association that is a corporation created in the merger.
(B) Each share or fraction of a share of the capital stock of the constituent corporation outstanding immediately prior to the effectiveness of the merger is converted in the merger into a share or equal fraction of a share of capital stock of a holding company having the same designations, rights, powers and preferences and the qualifications, limitations and restrictions as the share of capital stock of the constituent corporation being converted in the merger.
(C) The holding company and the surviving association are each domestic business corporations.
(D) Immediately following the effectiveness of the merger, the articles of incorporation and bylaws of the holding company are identical to the articles of incorporation and bylaws of the constituent corporation immediately before the effectiveness of the merger, except for changes that could be made without shareholder approval pursuant to section 1914(c).
(E) Immediately following the effectiveness of the merger, the surviving association is a direct or indirect wholly owned subsidiary of the holding company.
(F) The directors of the constituent corporation become or remain the directors of the holding company on the effectiveness of the merger.
(G) The board of directors of the constituent corporation has made a good faith determination that the shareholders of the constituent corporation will not recognize gain or loss for United States Federal income tax purposes.
(ii) If the holding company is a registered corporation, the shares of the holding company issued in connection with the merger shall be deemed to have been acquired at the time that the shares of the constituent corporation converted in the merger were acquired.
(iii) As used in this paragraph only, the term "holding company" means a corporation that, from its incorporation until consummation of the merger governed by this paragraph, was at all times a direct wholly owned subsidiary of the constituent corporation and whose capital stock is issued in the merger.
(e) Approval of division by preferred shares.--If a dividing association that is a business corporation has outstanding any shares of a preferred or special class or series of shares, regardless of a limitation stated in the articles or bylaws on the voting rights of the class or series of shares, the holders of outstanding shares of the class or series shall be entitled to vote as a class on a plan of division which:
(1) provides that the dividing association will not survive the division; or
(2) amends the articles or bylaws of the surviving corporation in a manner that would entitle the holders of the preferred or special shares to a class vote on the amendment under the articles, the bylaws or section 1914(b).
(f) Two-step transactions.--Unless the articles of incorporation of a registered corporation otherwise provide, approval by its shareholders of a plan of merger or interest exchange is not required if the transaction complies with the following:
(1) The plan of merger or interest exchange:
(i) permits or requires the merger or interest exchange to be effected under this subsection; and
(ii) provides that, if the merger or interest exchange is to be effected under this subsection, the merger or interest exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in paragraph (6).
(2) Another party to the merger, the acquiring association in the interest exchange, or a parent of another party to the merger or the acquiring association in the interest exchange, makes an offer to purchase, on the terms provided in the plan of merger or interest exchange, all of the outstanding shares of the corporation that, absent this subsection, would be entitled to vote on the plan of merger or interest exchange, except that:
(i) the offer may exclude shares that are:
(A) owned at the commencement of the offer by the corporation, the offeror, any parent of the offeror or any wholly owned subsidiary of any of the foregoing; or
(B) described in paragraph (6)(iii); and
(ii) the offer may be subject to a specific minimum number of shares or percentage of shares being tendered and any other conditions permitted by applicable law.
(3) The offer discloses that the plan of merger or interest exchange provides that the merger or interest exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in paragraph
(6) and that the shares of the corporation that are not tendered in response to the offer will be treated as set forth in paragraph (8).
(4) The board has not rescinded its recommendation at the time the offer closes.
(5) The offeror purchases all shares properly tendered in response to the offer and not properly withdrawn.
(6) On the close of the offer, the shares listed below are collectively entitled to cast at least the minimum number of votes on the merger or interest exchange that, absent this subsection, would be required by this chapter and by the articles of incorporation for the approval of the merger or interest exchange by the shareholders generally and also by any shares entitled to vote as a separate voting group on the merger or interest exchange at a meeting at which all shares entitled to vote on the approval were present and voted:
(i) shares purchased by the offeror in accordance with the offer;
(ii) shares otherwise owned by the offeror or by any parent of the offeror or any wholly owned subsidiary of any of the foregoing; and
(iii) shares subject to an agreement that they are to be transferred, contributed or delivered to the offeror, any parent of the offeror or any wholly owned subsidiary of any of the foregoing in exchange for shares or interests in such offeror, parent or subsidiary.
(7) The offeror or a wholly owned subsidiary of the offeror merges with or into, or effects an interest exchange in which it acquires shares of, the corporation.
(8) Each outstanding share of each class or series of shares of the corporation that the offeror is offering to purchase in accordance with the offer, and that is not purchased in accordance with the offer, is to be converted in the merger into, or into the right to receive, or is to be exchanged in the interest exchange for, or for the right to receive, the same amount and type of securities, interests, obligations, rights, cash or other property to be paid or exchanged in accordance with the offer for each share of that class or series of shares that is tendered in response to the offer, except that the following shares of the corporation need not be converted into or exchanged for the consideration described in this paragraph:
(i) shares owned by the corporation;
(ii) shares described in paragraph (6)(ii) or (iii); and
(iii) shares as to which the shareholder, as defined in section 1572 (relating to definitions), has perfected dissenters rights under Subchapter D of Chapter 15 (relating to dissenters rights).
(9) As used in this subsection:
(i) "offer" means the offer referred to in paragraph
(2);
(ii) "offeror" means the person making the offer;
(iii) "parent" of an association means a person that owns, directly or indirectly, through one or more wholly owned subsidiaries, all of the outstanding shares of or interests in that association;
(iv) shares tendered in response to the offer shall be deemed to have been "purchased" in accordance with the offer at the earliest time as of which:
(A) the offeror has irrevocably accepted those shares for payment; and
(B) either:
(I) in the case of shares represented by certificates, the offeror or the offeror's designated depository or other agent has physically received the certificates representing those shares; or (II) in the case of shares without certificates, those shares have been transferred into the account of the offeror or its designated depository or other agent, or an agent's message relating to those shares has been received by the offeror or its designated depository or other agent; and
(v) "wholly owned subsidiary" of a person means an association of or in which that person owns, directly or indirectly, through one or more wholly owned subsidiaries, all of the outstanding shares or interests
(g) Cross references.--See:
15 Pa.C.S. § 322 Approval by nonprofit corporation.
(a) Proposal of plan.--A plan shall be proposed in the case of a domestic nonprofit corporation as follows:
(1) by the adoption by the board of directors or other body of a resolution approving the plan;
(2) unless otherwise provided in the articles, by petition of members entitled to cast at least 10% of the votes that all members are entitled to cast thereon, setting forth the proposed plan, which petition shall be directed to the board of directors and filed with the secretary of the corporation; or
(3) by such other method as may be provided in the bylaws.
(b) Submission to members.--Except where the domestic nonprofit corporation has no members entitled to vote thereon, the board of directors or other body shall direct that the plan be submitted to a vote of the members entitled to vote thereon at a regular or special meeting of the members.
(c) Notice of meeting of members.--Notice in record form of the meeting of members 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 nonprofit corporation that is a party to the transaction under the plan. A copy of the proposed plan or a summary thereof shall be included in or enclosed with the notice. 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 corporation giving the notice on request and without cost.
(d) Member vote required.--Except as provided in section 5757 (relating to action by members), a plan shall be adopted upon receiving the affirmative vote of at least a majority of the votes that all members present are entitled to cast thereon of each domestic nonprofit corporation that is a party to the transaction under the plan. If any class of members is entitled to vote on the plan as a class, the plan must be adopted by the affirmative vote of at least a majority of the votes that all members present of such class are entitled to cast thereon.
(e) Adoption in absence of voting members.--If a domestic nonprofit corporation has no members entitled to vote thereon, a plan shall be deemed adopted by the corporation when it has been adopted by the board of directors or other body pursuant to subsection (a).
(f) Cross references.--See Subchapter A of Chapter 57 (relating to notice and meetings generally) and section 3304(b) (relating to election of benefit corporation status). Cross References. Section 322 is referred to in section 5757 of this title.
15 Pa.C.S. § 323 Approval by general partnership.
(a) General rule.--A plan shall be approved in the case of a domestic general partnership as follows:
(1) in the manner provided in its organic rules for the type of plan involved;
(2) if its organic rules do not provide for approval of the type of plan involved, in the manner provided in its organic rules for approval of a plan of merger; or
(3) if its organic rules do not provide for approval of the type of plan involved or a plan of merger, the plan shall be approved by all of the partners.
(b) Cross reference.--See section 3304(b) (relating to election of benefit corporation status).
15 Pa.C.S. § 324 Approval by limited partnership.
(a) Proposal of plan.--Except as provided in the organic rules, a plan shall be proposed in the case of a domestic limited partnership by the adoption by a unanimous vote of the general partners of a resolution approving the plan. Except where the approval of the limited partners is unnecessary under this chapter or the organic rules, the general partners shall submit the plan to a vote of the limited partners entitled to vote thereon at a regular or special meeting of the limited partners.
(b) Notice of meeting of limited partners.--Notwithstanding any other provision of the organic rules, notice in record form of the meeting of limited partners called for the purpose of considering the proposed plan shall be given to each limited partner, whether or not entitled to vote thereon, of each domestic limited partnership that is a party to the transaction under the plan. A copy of the proposed plan or a summary thereof shall be included in or enclosed with the notice. 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 limited partner of the limited partnership giving the notice on request and without cost.
(c) Required vote by limited partners.--Except as provided in the organic rules:
(1) A plan shall be adopted upon receiving the affirmative vote or consent of limited partners owning the rights to receive a majority of the distributions as limited partners of each domestic limited partnership that is a party to the proposed transaction under the plan and, if any class of limited partners is entitled to vote thereon as a class, the affirmative vote or consent of limited partners owning the rights to receive a majority of the distributions as limited partners in each class vote.
(2) A proposed plan shall not be deemed to have been adopted by the limited partnership unless it has also been approved by the general partners, regardless of the fact that the general partners have directed or suffered the submission of the plan to the limited partners for action.
(d) Merger by action of general partners only.--Except as provided in the organic rules, a plan of merger shall not require the approval of the limited partners of a domestic limited partnership that is a merging association and shall be deemed adopted by the limited partnership when it has been adopted by the general partners pursuant to subsection (a) if:
(1) whether or not the limited partnership is the surviving association, the surviving association is a domestic limited partnership and its organic rules are identical to the organic rules of the merging limited partnership, except for changes that could be made without action by the limited partners; and
(2) each partnership interest outstanding immediately before 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 partnership interest in the surviving limited partnership after the effectiveness of the merger.
(e) Cross reference.--See section 3304(b) (relating to election of benefit corporation status). (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days) 2016 Amendment. Act 170 amended subsecs. (a) and (c). Cross References. Section 324 is referred to in section 8646 of this title.
15 Pa.C.S. § 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 88 (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). (July 15, 2024, P.L.728, No.59, eff. 60 days) 2024 Amendment. Act 59 amended (d)(2)(iv). Cross References. Section 325 is referred to in sections 320, 8847 of this title.
15 Pa.C.S. § 326 Approval by professional association.
(a) General rule.--A plan shall be approved in the case of a domestic professional association by vote of a majority, or such higher percentage as may be provided in the organic rules, of the associates, voting according to their proportionate shares of ownership.
(b) Cross reference.--See section 3304(b) (relating to election of benefit corporation status).
15 Pa.C.S. § 327 Approval by business trust.
(a) General rule.--Except as provided in subsection (b), a plan shall be approved in the case of a domestic business trust as follows:
(1) in the manner provided in its organic rules for the type of plan involved;
(2) if its organic rules do not provide for approval of the type of plan involved, in the manner provided in its organic rules for approval of a plan of merger; or
(3) if its organic rules do not provide for approval of the type of plan involved or a plan of merger, the plan shall be approved by all of the beneficial owners.
(b) Adoption of plan of merger without beneficiary vote.--Unless otherwise required by the organic rules, a plan of merger providing for the merger of a domestic business trust (referred to in this paragraph as the "constituent trust") with or into a single indirect wholly owned subsidiary (referred to in this paragraph as the "subsidiary trust") of the constituent trust shall not require the approval of the beneficiaries of the constituent trust if all of the following provisions are satisfied:
(1) The constituent trust and the subsidiary trust are the only parties to the merger, other than a surviving association created in the merger.
(2) Each interest in the constituent trust outstanding immediately prior to the effectiveness of the merger is converted in the merger into an interest in the holding trust
having the same designations, rights, powers and preferences and the qualifications, limitations and restrictions as the interests in the constituent trust being converted in the merger.
(3) The holding trust and the surviving association are each domestic business trusts.
(4) Immediately following the effectiveness of the merger, the instrument and organic rules of the holding trust are identical to the instrument and organic rules of the constituent trust immediately before the effectiveness of the merger, except for changes that could be made without beneficiary approval under Chapter 95 (relating to business trusts).
(5) Immediately following the effectiveness of the merger, the surviving association is a direct or indirect wholly owned subsidiary of the holding trust.
(6) The trustees of the constituent trust become or remain the trustees of the holding trust on the effectiveness of the merger.
(7) The trustees of the constituent trust have made a good faith determination that the beneficiaries of the constituent trust will not recognize gain or loss for United States Federal income tax purposes.
(8) As used in this subsection only, the term "holding trust" means a business trust that, from its formation until consummation of the merger governed by this subsection, was at all times a direct wholly owned subsidiary of the constituent trust and the interests in which are issued in the merger.
(c) Cross reference.--See section 3304(b) (relating to election of benefit corporation status).
15 Pa.C.S. § 328 Approval by unincorporated nonprofit association.
(a) General rule.--Except as provided in the governing principles, a plan shall be approved in the case of a domestic unincorporated nonprofit association by the affirmative vote of at least a majority of the votes cast at a meeting of the members.
(b) Cross reference.--See section 3304(b) (relating to election of benefit corporation status).
15 Pa.C.S. § 329 Special treatment of interest holders.
(a) General rule.--Except as otherwise restricted in the organic rules, a plan may contain a provision classifying the interest holders of a class or series of interests into one or more separate groups by reference to any facts or circumstances that are not manifestly unreasonable and providing mandatory treatment for interests of the class or series held by particular interest holders or groups of interest holders that differs materially from the treatment accorded other interest holders or groups of interest holders that hold interests of the same class or series, including a provision modifying or rescinding rights previously created under this section if either of the following applies:
(1) The plan:
(i) is approved by a majority of the votes cast by the holders of any class or series of interests any of the interests of which are so classified into groups, whether or not such class or series would otherwise be entitled to vote on the plan; and
(ii) specifically enumerates the type and extent of the special treatment authorized.
(2) Under all the facts and circumstances, a court of competent jurisdiction finds such special treatment is undertaken in good faith, after reasonable deliberation and is in the best interest of the association.
(b) Statutory voting rights on special treatment.--Except as provided in subsection (d), if a plan contains a provision for special treatment, each group of holders of any outstanding interests of a class or series who are to receive the same special treatment under the plan shall be entitled to vote as a special class in respect to the plan regardless of any limitations stated in the organic rules on the voting rights of any class or series.
(c) Determination of groups.--For purposes of applying subsections (a)(1) and (b), the determination of which interest holders are part of each group receiving special treatment shall be made as of the record date for interest holder action on the plan.
(d) Dissenters rights on special treatment.--If a plan contains a provision for special treatment without requiring for the adoption of the plan the statutory class vote required under subsection (b), the holder of any outstanding interests the statutory class voting rights of which are so denied shall be entitled to assert dissenters rights with respect to those interests. A shareholder of a business corporation who wishes to assert dissenters rights shall comply with Subchapter D of Chapter 15 (relating to dissenters rights). An interest holder in any other type of domestic entity shall comply with Subchapter D of Chapter 15 to the extent practicable.
(e) Notice to interest holders.--Any notice to interest holders of a meeting called to act on a plan that provides for special treatment shall state that the plan provides for special treatment. The notice shall identify the interest holders receiving special treatment unless the notice is accompanied by either a summary of the plan that includes that information or the full text of the plan.
(f) Exceptions.--This section shall not apply to any of the following:
(1) A provision of a plan that offers to all holders of interests of a class or series the same option to elect certain treatment.
(2) A plan involving any type of domestic entity that contains an express provision that this section does not apply or that fails to contain an express provision that this section shall apply.
(3) A provision of a plan that treats all of the holders of a particular class or series of interests of any type of domestic entity differently from the holders of another class or series. A provision of a plan that treats the holders of a class or series of shares of a domestic business corporation differently from the holders of another class or series of shares shall not constitute a violation of section 1521(d) (relating to authorized shares). Cross References. Section 329 is referred to in sections 312, 317, 321, 332, 333, 342, 343, 352, 353, 362, 363, 372, 373, 376, 1571 of this title.
15 Pa.C.S. § 330 Alternative means of approval of transactions.
(a) General rule.--Except as provided in subsection (b) or the organic rules of a domestic entity, approval of a transaction under this chapter by the unanimous vote or consent of its interest holders satisfies the requirements of this chapter for approval of the transaction.
(b) Exception.--Subsection (a) shall not apply to a nonprofit corporation.
Cross References. Section 330 is referred to in sections 321, 325 of this title.
15 Pa.C.S. § 331 Merger authorized.
(a) General rule.--Except as provided in section 318 (relating to excluded entities and transactions) or this section, by complying with this chapter:
(1) One or more domestic entities may merge with one or more domestic entities or foreign associations into a surviving association.
(2) Two or more foreign associations may merge into a surviving association that is a domestic entity.
(3) A domestic banking institution may be a merging association or surviving association in a merger with one or more domestic or foreign associations if the surviving association or at least one of the merging associations is a domestic entity.
(b) Foreign law authorization required.--By complying with the applicable provisions of this subchapter, a foreign association may be a party to a merger under this subchapter or may be the surviving association in such a merger if the merger is authorized by the laws of the jurisdiction of formation of the foreign association.
(c) Banking institutions.--Subsection (a)(3) controls over any inconsistent provision of the organic law of a domestic banking institution that is a merging association.
(d) Exception.--A health maintenance organization may be a merging association only if the surviving association is a health maintenance organization.
(e) Cross reference.--See section 314 (relating to regulatory conditions and required notices and approvals).
15 Pa.C.S. § 332 Plan of merger.
(a) General rule.--A domestic entity may become a party to a merger by approving a plan of merger. The plan shall be in record form and contain all of the following:
(1) As to each merging association, its name, jurisdiction of formation and type.
(2) If the surviving association is to be created in the merger, a statement to that effect and the association's name, jurisdiction of formation and type.
(3) The manner, if any, of:
(i) converting some or all of the interests in a merging association into interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing; or
(ii) canceling some or all of the interests in a merging association.
(4) If the surviving association exists before the merger, any proposed amendments to:
(i) its public organic record, if any; or
(ii) its private organic rules that are or are proposed to be in record form.
(5) If the surviving association is to be created in the merger:
(i) its proposed public organic record, if any; and
(ii) the full text of its private organic rules that are proposed to be in record form.
(6) Provisions, if any, providing special treatment of interests in a merging association held by any interest holder or group of interest holders as authorized by and subject to section 329 (relating to special treatment of interest holders).
(7) The other terms and conditions of the merger.
(8) Any other provision required by:
(i) the laws of this Commonwealth;
(ii) the laws of the jurisdiction of formation of a foreign merging or surviving association; or
(iii) the organic rules of a merging association.
(b) Optional contents.--In addition to the requirements of subsection (a), a plan of merger may contain any other provision not prohibited by law.
(c) Cross reference.--See section 316 (relating to contents of plan). Cross References. Section 332 is referred to in sections 8415, 8615, 8815 of this title.
15 Pa.C.S. § 333 Approval of merger.
(a) Approval by domestic entities.--A plan of merger shall not be effective unless it has been approved in both of the following ways:
(1) The plan is approved by a domestic entity that is a merging association in accordance with the applicable provisions of Subchapter B (relating to approval of entity transactions).
(2) The plan is approved in record form by each interest holder, if any, of a domestic entity that is a merging association that will have interest holder liability for debts, obligations and other liabilities that arise after the merger becomes effective, unless, as to an interest holder that does not approve the plan, both of the following apply:
(i) The organic rules of the domestic entity provide in record form for the approval of a merger in which some or all of its interest holders become subject to interest holder liability by the vote or consent of fewer than all the interest holders.
(ii) The interest holder consented in record form to or voted for that provision of the organic rules or became an interest holder after the adoption of that provision.
(b) Approval by foreign associations.--A merger under this subchapter in which a foreign association is a merging association is not effective unless the merger is approved by the foreign association in accordance with the laws of its jurisdiction of formation.
(c) Approval by domestic banking institutions.--A merger under this subchapter in which a domestic banking institution
that is not a domestic entity is a merging association is not effective unless the merger is approved by the domestic banking institution in accordance with the requirements in its organic laws and organic rules for approval of a merger.
(d) Dissenters rights.--
(1) Except as provided in paragraph (2), if a shareholder of a domestic business corporation that is to be a merging association objects to the plan of merger and complies with Subchapter D of Chapter 15 (relating to dissenters rights), the shareholder shall be entitled to dissenters rights to the extent provided in that subchapter.
(2) Except as provided under section 317 (relating to contractual dissenters rights in entity transactions), dissenters rights shall not be available to shareholders of a domestic business corporation that is a merging association in a merger described in section 321(d)(1)(i) or (4) (relating to approval by business corporation).
(3) If a shareholder of a domestic banking institution that is to be a merging association objects to the plan of merger and complies with section 1222 of the act of November 30, 1965 (P.L.847, No.356), known as the Banking Code of 1965, the shareholder shall be entitled to the rights provided in that section.
(4) See section 329 (relating to special treatment of interest holders). Cross References. Section 333 is referred to in sections 336, 1571, 8415, 8615, 8815 of this title.
15 Pa.C.S. § 334 Amendment or abandonment of plan of merger.
(a) General rule.--A plan of merger may be amended or abandoned only with the consent of each party to the plan, except as otherwise provided in the plan.
(b) Approval of amendment.--A domestic entity that is a merging association may approve an amendment of a plan of merger in one of the following ways:
(1) In the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended.
(2) By its governors or interest holders in the manner provided in the plan, but an interest holder that was entitled to vote on or consent to approval of the plan is entitled to vote on or consent to any amendment of the plan that will change any of the following:
(i) The amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing, to be received by the interest holders of any party to the plan.
(ii) The public organic record, if any, or private organic rules of the surviving association that will be in effect immediately after the merger becomes effective, except for changes that do not require approval of the interest holders of the surviving association under its organic law or organic rules.
(iii) Any other terms or conditions of the plan, if the change would:
(A) increase the interest holder liability to which the interest holder will be subject; or
(B) otherwise adversely affect the interest holder in any material respect.
(c) Approval of abandonment.--After a plan of merger has been approved by a domestic entity that is a merging association
and before a statement of merger becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic entity that is a merging association may abandon the plan in the same manner as the plan was approved.
(d) Statement of abandonment.--If a plan of merger is abandoned after a statement of merger has been delivered to the department for filing and before the statement becomes effective, a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness), signed by a party to the plan, must be delivered to the department for filing before the statement of merger becomes effective.
15 Pa.C.S. § 335 Statement of merger; effectiveness.
(a) General rule.--A statement of merger shall be signed by each merging association and delivered to the department for filing along with the certificates, if any, required by section 139 (relating to tax clearance of certain fundamental transactions).
(b) Contents.--A statement of merger shall contain all of the following:
(1) With respect to each merging association that is not the surviving association:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) if it is a domestic filing association, domestic limited liability partnership or registered foreign association, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address);
(v) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office; and
(vi) if it is a nonregistered foreign association, the address, including street and number, if any, of:
(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or
(B) if it is not required to maintain a registered or similar office, its principal office.
(2) With respect to the surviving association:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) if it is a domestic filing association, domestic limited liability partnership or registered foreign association, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109;
(v) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office; and
(vi) if it is a nonregistered foreign association, the address, including street and number, if any, of:
(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or
(B) if it is not required to maintain a registered or similar office, its principal office.
(3) If the statement of merger is not to be effective on filing, the later date or date and time on which it will become effective.
(4) A statement that the merger was approved in the following ways as applicable:
(i) By a domestic entity that is a merging association, in accordance with this chapter.
(ii) By a foreign merging association, in accordance with the laws of its jurisdiction of formation.
(iii) By a domestic merging association that is not a domestic entity, in the same manner required by its organic law for approving a merger that requires the approval of its interest holders.
(5) If the surviving association exists before the merger and is a domestic filing entity, any amendment to its public organic record approved as part of the plan of merger.
(6) If the surviving association is created by the merger and is a domestic filing entity, its public organic record, as an attachment. The public organic record does not need to state the name or address of an incorporator of a corporation, organizer of a limited liability company or similar person with respect to any other type of entity.
(7) If the surviving association is created by the merger and is a nonregistered foreign association, one of the following:
(i) The street and mailing addresses of its registered agent and registered office in its jurisdiction of formation if it is a filing entity.
(ii) The street and mailing address of its principal office if it is not a filing entity.
(8) If the surviving association is created by the merger and is a domestic limited liability partnership or a domestic limited liability limited partnership that is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration, as an attachment.
(9) If the surviving association is created by the merger and is a domestic electing partnership, its statement of election.
(c) Other provisions.--In addition to the requirements of subsection (b), a statement of merger may contain any other provision not prohibited by law.
(d) Domestic surviving association.--If the surviving association is a domestic entity, its public organic record, if any, shall satisfy the requirements of the laws of this Commonwealth, except that the public organic record does not need to be signed and may omit any provision that is not required to be included in a restatement of the public organic record.
(e) Filing of plan.--A plan of merger that is signed by all of the merging associations and meets all of the requirements of subsection (b) may be delivered to the department for filing instead of a statement of merger and on filing has the same effect. If a plan of merger is filed as provided in this subsection, references in this chapter to a statement of merger refer to the plan of merger filed under this subsection.
(f) Effectiveness of statement of merger.--A statement of merger is effective as provided in section 136(c) (relating to processing of documents by Department of State).
(g) Effectiveness of merger.--If the surviving association is a domestic association, the merger is effective when the statement of merger is effective. If the surviving association
is a foreign association, the merger is effective on the later of:
(1) the date and time provided by the organic law of the surviving association; or
(2) when the statement of merger is effective.
(h) Cross references.--See sections 134 (relating to docketing statement), 135 (relating to requirements to be met by filed documents) and 316 (relating to contents of plan).
15 Pa.C.S. § 336 Effect of merger.
(a) General rule.--When a merger under this subchapter becomes effective, all of the following apply:
(1) The surviving association continues or comes into existence.
(2) The separate existence of each merging association that is not the surviving association ceases.
(3) All property of each merging association vests in the surviving association without reversion or impairment, and the merger shall not constitute a transfer of any of that property.
(4) All debts, obligations and other liabilities of each merging association are debts, obligations and other liabilities of the surviving association.
(5) Except as otherwise provided by law, all the rights, privileges, immunities and powers of each merging association vest in the surviving association.
(6) If the surviving association exists before the merger, all of the following apply:
(i) All of its property continues to be vested in it without transfer, reversion or impairment.
(ii) It remains subject to all its debts, obligations and other liabilities.
(iii) All its rights, privileges, immunities and powers continue to be vested without change in it.
(iv) Its public organic record, if any, is amended to the extent provided in the statement of merger.
(v) Its private organic rules that are to be in record form, if any, are amended to the extent provided in the plan of merger.
(7) Liens on the property of the merging association shall not be impaired by the merger.
(8) A claim existing or an action or a proceeding pending by or against any of the merging associations may be prosecuted to judgment as if the merger had not taken place, or the surviving association may be proceeded against or substituted in place of the appropriate merging association.
(9) If the surviving association is created by the merger, its private organic rules are effective and the following apply:
(i) If it is a filing entity, its public organic record is effective.
(ii) If it is a limited liability partnership or a limited liability limited partnership that is not using the alternative procedure under section 8201(f) (relating to scope), its statement of registration is effective.
(iii) If it is an electing partnership, its statement of election is effective.
(10) The interests in each merging association that are to be converted or canceled as provided in the plan of merger are converted or canceled, and the interest holders of those interests are entitled only to the rights provided to them under the plan and to any dissenters rights they have
pursuant to section 317 (relating to contractual dissenters rights in entity transactions) or 333(d) (relating to approval of merger).
(b) No dissolution rights.--Except as provided in the organic law or organic rules of a merging association, a merger under this subchapter does not give rise to any rights that an interest holder, governor or third party would have on a dissolution, liquidation or winding up of the merging association.
(c) New interest holder liability.--When a merger under this subchapter becomes effective, a person that becomes subject to interest holder liability with respect to an association as a result of the merger has interest holder liability only to the extent provided by the organic law of that association and only for those debts, obligations and other liabilities that arise after the merger becomes effective.
(d) Prior interest holder liability.--When a merger under this subchapter becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic entity that is a merging association with respect to which the person had interest holder liability shall be as follows:
(1) The merger does not discharge any interest holder liability under the organic law of the domestic entity to the extent the interest holder liability arose before the merger became effective.
(2) The person does not have interest holder liability under the organic law of the domestic entity for any debt, obligation or other liability that arises after the merger becomes effective.
(3) The organic law of the domestic entity continues to apply to the release, collection or discharge of any interest holder liability preserved under paragraph (1) as if the merger had not occurred.
(4) The person has whatever rights of contribution from any other person as are provided by law other than this chapter or the organic rules of the domestic entity with respect to any interest holder liability preserved under paragraph (1) as if the merger had not occurred.
(e) Foreign surviving association.--When a merger under this subchapter becomes effective, a foreign association that is the surviving association may be served with process in this Commonwealth for the collection and enforcement of any debts, obligations or other liabilities of a domestic entity that is a merging association in accordance with applicable law.
(f) Registration of foreign association.--When a merger under this subchapter becomes effective, the registration to do business in this Commonwealth of a registered foreign association that is a merging association and is not the surviving association is canceled.
(g) Taxes.--Any taxes, interest, penalties and public accounts of the Commonwealth claimed against any of the merging associations that are settled, assessed or determined prior to or after the merger shall be the liability of the surviving association and, together with interest thereon, shall be a lien against the franchises and property of the surviving association. (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days) 2016 Amendment. Act 170 amended subsec. (a)(2).
15 Pa.C.S. § 341 Interest exchange authorized.
(a) General rule.--Except as provided in section 318 (relating to excluded entities and transactions) or this section, by complying with this subchapter:
(1) A domestic or foreign association may acquire all of one or more classes or series of the issued and outstanding interests of a domestic entity in exchange for interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing.
(2) A domestic entity may acquire all of one or more classes or series of the issued and outstanding interests of a foreign association in exchange for interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing.
(b) Foreign associations.--By complying with the applicable provisions of this subchapter:
(1) A foreign association may be the acquiring association in an interest exchange under this subchapter regardless of whether the laws of its jurisdiction of formation authorizes an interest exchange.
(2) A foreign association may be the acquired association in an interest exchange under this subchapter only if the interest exchange is authorized by the laws of its jurisdiction of formation.
(c) Protected agreements.--If a protected agreement of a domestic entity other than a business corporation contains a provision that applies to a merger of the entity but does not refer to an interest exchange, the provision shall apply to an interest exchange in which the domestic entity is the acquired association as if the interest exchange were a merger until the provision is amended after July 1, 2015.
(d) Excluded entities.--The following domestic entities shall not be the acquired association in an interest exchange:
(1) a health maintenance organization;
(2) a hospital plan corporation; or
(3) a professional health service organization.
(e) Transitional provision.--A reference in either of the following to a share exchange means an interest exchange:
(1) in a provision of the organic rules of a domestic business corporation which took effect before July 1, 2015; or
(2) in a statute of this Commonwealth that took effect before July 1, 2015.
(f) Cross reference.--See section 314 (relating to regulatory conditions and required notices and approvals). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsecs. (a) and (e).
Cross References. Section 341 is referred to in section 1106 of this title.
15 Pa.C.S. § 342 Plan of interest exchange.
(a) General rule.--A domestic entity may be the acquired association in an interest exchange under this chapter by approving a plan of interest exchange. The plan shall be in record form and contain all of the following:
(1) The name and type of the acquired association.
(2) The name, jurisdiction of formation and type of the acquiring association.
(3) The manner of:
(i) exchanging the interests in the acquired association to be acquired in the interest exchange into interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing; and
(ii) canceling, if desired, some or all other interests in the acquired association.
(4) Any proposed amendments to:
(i) the public organic record, if any, of the acquired association; and
(ii) the private organic rules of the acquired association that are or are proposed to be in record form.
(5) Provisions, if any, providing special treatment of interests in the acquired association held by any interest holder or group of interest holders as authorized by and subject to section 329 (relating to special treatment of interest holders).
(6) The other terms and conditions of the interest exchange.
(7) Any other provision required by:
(i) the laws of this Commonwealth; or
(ii) the organic rules of the acquired association.
(b) Optional contents.--In addition to the requirements of subsection (a), a plan of interest exchange may contain any other provision not prohibited by law.
(c) Cross reference.--See section 316(c) (relating to contents of plan). Cross References. Section 342 is referred to in sections 8415, 8615, 8815 of this title.
15 Pa.C.S. § 343 Approval of interest exchange.
(a) Approval by domestic entities.--A plan of interest exchange in which the acquired association is a domestic entity shall not be effective unless it has been approved in the following ways:
(1) By the acquired domestic entity in accordance with the applicable provisions of Subchapter B (relating to approval of entity transactions).
(2) In record form, by each interest holder of the acquired domestic entity that will have interest holder liability for debts, obligations and other liabilities that arise after the interest exchange becomes effective, unless, as to an interest holder that does not approve the plan, both of the following apply:
(i) The organic rules of the entity provide in record form for the approval of an interest exchange or a merger in which some or all of its interest holders become subject to interest holder liability by the vote or consent of fewer than all the interest holders.
(ii) The interest holder voted for or consented in record form to that provision of the organic rules or became an interest holder after the adoption of that provision.
(3) Except as provided in the organic rules of the domestic entity, by the following class votes:
(i) the holders of any class or series of interests of the acquired association to be exchanged or canceled shall be entitled to vote as a class on the plan; and
(ii) the holders of any class or series of interests of the acquired association shall be entitled to vote as a class on the plan if the plan effects any change in the organic rules and those holders would have been entitled to vote as a class if the change had been made in any other manner.
(b) Approval by foreign associations.--An interest exchange in which the acquired association is a foreign association is not effective unless it is approved by the foreign association in accordance with the laws of its jurisdiction of formation.
(c) Acquiring association.--Except as provided in its organic law or organic rules, the interest holders of the acquiring association are not required to approve the interest exchange.
(d) Dissenters rights.--If a shareholder of a domestic business corporation that is to be the acquired association in an interest exchange objects to the plan of exchange and complies with Subchapter D of Chapter 15 (relating to dissenters rights), the shareholder shall be entitled to dissenters rights to the extent provided in that subchapter.
(e) Cross references.--See sections 317 (relating to contractual dissenters rights in entity transactions) and 329(c) (relating to special treatment of interest holders). Cross References. Section 343 is referred to in sections 346, 1571, 8415, 8615, 8815 of this title.
15 Pa.C.S. § 344 Amendment or abandonment of plan of interest exchange.
(a) General rule.--A plan of interest exchange may be amended or abandoned only with the consent of each party to the plan, except as otherwise provided in the plan.
(b) Approval of amendment.--A domestic entity that is the acquired association may approve an amendment of a plan of interest exchange in one of the following ways:
(1) In the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended.
(2) By its governors or interest holders in the manner provided in the plan, but an interest holder that was entitled to vote on or consent to approval of the plan is entitled to vote on or consent to any amendment of the plan that will change any of the following:
(i) The amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing, to be received by any of the interest holders of the entity under the plan.
(ii) The public organic record, if any, or private organic rules of the entity that will be in effect immediately after the interest exchange becomes effective, except for changes that do not require approval of the interest holders of the entity under its organic law or organic rules.
(iii) Any other terms or conditions of the plan, if the change would:
(A) increase the interest holder liability to which the interest holder will be subject; or
(B) otherwise adversely affect the interest holder in any material respect.
(c) Approval of abandonment.--After a plan of interest exchange has been approved by a domestic entity that is the acquired entity and before a statement of interest exchange becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic entity that is the acquired association may abandon the plan in the same manner as the plan was approved.
(d) Statement of abandonment.--If a plan of interest exchange is abandoned after a statement of interest exchange has been delivered to the department for filing and before the statement becomes effective, a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness), signed by the acquired association, must be delivered to the department for filing before the time the statement of interest exchange becomes effective.
15 Pa.C.S. § 345 Statement of interest exchange; effectiveness.
(a) General rule.--If the acquired association is a domestic entity, a statement of interest exchange shall be signed by that entity and delivered to the department for filing.
(b) Contents.--A statement of interest exchange shall contain all of the following:
(1) With respect to the acquired association:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) if it is a domestic filing association or domestic limited liability partnership, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address); and
(v) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office.
(2) With respect to the acquiring association:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) if it is a domestic filing association, domestic limited liability partnership or registered foreign association, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109;
(v) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office; and
(vi) if it is a nonregistered foreign association, the address, including street and number, if any, of:
(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or
(B) if it is not required to maintain a registered or similar office, its principal office.
(3) If the statement of interest exchange is not to be effective on filing, the later date or date and time on which it will become effective.
(4) A statement that the plan of interest exchange was approved by the acquired association in accordance with this chapter.
(5) Any amendments to the public organic record of the acquired association approved as part of the plan of interest exchange.
(c) Other provisions.--In addition to the requirements of subsection (b), a statement of interest exchange may contain any other provision not prohibited by law.
(d) Filing of plan.--A plan of interest exchange that is signed by the domestic entity that is the acquired association and that meets all of the requirements of subsection (b) may be delivered to the department for filing instead of a statement of interest exchange and on filing shall have the same effect. If a plan of interest exchange is delivered to the department for filing as provided in this subsection, references in this chapter to a statement of interest exchange shall refer to the plan of interest exchange filed under this subsection.
(e) Effectiveness.--An interest exchange in which the acquired association is a domestic entity is effective when the statement of interest exchange is effective as provided in section 136(c) (relating to processing of documents by Department of State).
(f) Cross references.--See sections 134 (relating to docketing statement) and 135 (relating to requirements to be met by filed documents).
15 Pa.C.S. § 346 Effect of interest exchange.
(a) General rule.--When an interest exchange in which the acquired association is a domestic entity becomes effective, all of the following apply:
(1) Interests in the acquired association are exchanged or canceled as provided in the plan of exchange, and the interest holders of those interests are entitled only to the rights provided to them under the plan and to any dissenters rights they have pursuant to section 317 (relating to contractual dissenters rights in entity transactions) or 343(d) (relating to approval of interest exchange).
(2) The acquiring association becomes the interest holder of the interests in the acquired association stated in the plan of interest exchange to be acquired by the acquiring entity.
(3) The public organic record, if any, of the acquired association is amended to the extent provided in the statement of interest exchange.
(4) The private organic rules of the acquired association that are to be in record form, if any, are amended to the extent provided in the plan of interest exchange.
(b) No dissolution rights.--Except as provided in the organic rules of the acquired association, the interest exchange shall not give rise to any rights that an interest holder, governor or third party would have upon a dissolution, liquidation or winding up of the acquired association.
(c) New interest holder liability.--When an interest exchange becomes effective, a person that becomes subject to interest holder liability with respect to an association as a result of the interest exchange has interest holder liability only to the extent provided by the organic law of the association and only for those debts, obligations and other
liabilities that arise after the interest exchange becomes effective.
(d) Prior interest holder liability.--When an interest exchange becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic acquired association with respect to which the person had interest holder liability is as follows:
(1) The interest exchange does not discharge any interest holder liability under the organic law of the domestic acquired association to the extent the interest holder liability arose before the interest exchange became effective.
(2) The person does not have interest holder liability under the organic law of the domestic acquired association for any debt, obligation or other liability that arises after the interest exchange becomes effective.
(3) The organic law of the domestic acquired association continues to apply to the release, collection or discharge of any interest holder liability preserved under paragraph
(1) as if the interest exchange had not occurred.
(4) The person has whatever rights of contribution from any other person as are provided by law other than this title or the organic law or organic rules of the domestic acquired association with respect to any interest holder liability preserved under paragraph (1) as if the interest exchange had not occurred.
15 Pa.C.S. § 351 Conversion authorized.
(a) Domestic converting associations.--Except as provided in section 318 (relating to excluded entities and transactions) or this section, by complying with this chapter:
(1) A domestic entity may become a domestic entity of a different type or a domestic banking institution.
(2) A domestic banking institution may become a domestic association of a different type.
(3) A domestic entity may become a foreign association of a different type, if the conversion is authorized by the laws of the foreign jurisdiction.
(b) Foreign converting associations.--By complying with the applicable provisions of this subchapter, a foreign association may become a domestic entity of a different type if the conversion is authorized by the laws of the jurisdiction of formation of the foreign association.
(c) Protected governance agreements.--If a protected governance agreement that is binding on a domestic entity immediately before the effectiveness of a transaction under this chapter contains a provision that applies to a merger of the entity but does not refer to a conversion, the provision
shall apply to a conversion of the entity as if the conversion were a merger until the provision is amended after July 1, 2015.
(d) Exceptions.--This subchapter may not be used to accomplish a transaction that has the same effect as a transaction under any of the following provisions:
(1) Section 7104 (relating to election of an existing business corporation to become a cooperative corporation).
(2) Section 7105 (relating to termination of status as a cooperative corporation for profit).
(3) Section 7106 (relating to election of an existing nonprofit corporation to become a cooperative corporation).
(4) Section 7107 (relating to termination of nonprofit cooperative corporation status).
(e) Cross reference.--See section 314 (relating to regulatory conditions and required notices and approvals). Cross References. Section 351 is referred to in section 1106 of this title.
15 Pa.C.S. § 352 Plan of conversion.
(a) General rule.--A domestic entity or domestic banking institution may be a party to a conversion by approving a plan of conversion. The plan shall be in record form and contain all of the following:
(1) The name and type of the converting association.
(2) The name, jurisdiction of formation and type of converted association.
(3) The manner of:
(i) canceling, if desired, some, but less than all, of the interests in the converting association;
(ii) converting at least some of the interests in the converting association into interests in the converted association; and
(iii) converting the interests in the converting association not canceled under subparagraph (i) or converted under subparagraph (ii) into interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing.
(4) The proposed public organic record of the converted association if it will be a filing entity.
(5) The full text of the private organic rules of the converted association that are proposed to be in record form.
(6) Provisions, if any, providing special treatment of interests in the converting association held by any interest holder or group of interest holders as authorized by and subject to section 329 (relating to special treatment of interest holders).
(7) The other terms and conditions of the conversion.
(8) Any other provision required by:
(i) the laws of this Commonwealth;
(ii) the laws of the jurisdiction of formation of the converted association if it is to be a foreign association; or
(iii) the organic rules of the converting association.
(b) Optional contents.--In addition to the requirements of subsection (a), a plan of conversion may contain any other provision not prohibited by law.
(c) Terms of interests.--The ownership, voting and other rights of the interest holders in the converted association shall be substantially the same as they were in the converting association except:
(1) as provided in the plan of conversion pursuant to section 329;
(2) as provided in the express terms of the organic rules of the converted association that are in record form; or
(3) to the extent a difference in those rights is required by a provision of the organic law of the converted association that cannot be varied in its organic rules.
(d) Cross reference.--See section 316(c) (relating to contents of plan). Cross References. Section 352 is referred to in sections 353, 356, 8415, 8615, 8815 of this title.
15 Pa.C.S. § 353 Approval of conversion.
(a) Approval by domestic associations.--A plan of conversion in which the converting association is a domestic entity or domestic banking institution shall not be effective unless it has been approved in the following ways:
(1) In the case of a domestic entity, in accordance with the applicable provisions of Subchapter B (relating to approval of entity transactions).
(2) In the case of a domestic banking institution that is a corporation, by at least:
(i) In the case of a mutual savings bank:
(A) two-thirds of the trustees present at a meeting at which the plan is proposed; and
(B) two-thirds of all the trustees at a subsequent meeting held upon not less than ten days' notice to all the trustees.
(ii) In the case of any other institution:
(A) a majority of the directors; and
(B) the shareholders entitled to cast at least two-thirds of the votes which all shareholders are entitled to cast thereon, and, if any class of shares is entitled to vote thereon as a class, the holders of at least two-thirds of the outstanding shares of such class, at a meeting held upon not less than ten days' notice to all shareholders.
(3) In record form, by each interest holder, if any, of the converting association that will have interest holder liability for debts, obligations and other liabilities that arise after the conversion becomes effective, unless, as to an interest holder that does not approve the plan, both of the following apply:
(i) The organic rules of the converting association provide in record form for the approval of a conversion or a merger in which some or all of its interest holders become subject to interest holder liability by the vote or consent of fewer than all of the interest holders.
(ii) The interest holder voted for or consented in record form to that provision of the organic rules or became an interest holder after the adoption of that provision.
(b) Approval by foreign associations.--A conversion in which the converting association is a foreign association shall not be effective unless it is approved by the foreign association in accordance with the laws of its jurisdiction of formation.
(c) Dissenters rights.--The following apply with respect to the rights of an interest holder of the converting association:
(1) A shareholder of a domestic business corporation that is to be a converting association shall be entitled to dissenters rights if:
(i) the shareholder objects to the plan of conversion and complies with Subchapter D of Chapter 15 (relating to dissenters rights); and
(ii) the conversion involves a change in the rights of the shareholder pursuant to section 352(c)(1) or (2) (relating to plan of conversion).
(2) A shareholder of a domestic banking institution that is to be a converting association shall be entitled to the rights provided in section 1222 of the act of November 30, 1965 (P.L.847, No.356), known as the Banking Code of 1965, if:
(i) the shareholder objects to the plan of conversion and complies with section 1222 of the Banking Code of 1965; and
(ii) the conversion involves a change in the rights of the shareholder pursuant to section 352(c)(1) or (2).
(3) See sections 317 (relating to contractual dissenters rights in entity transactions) and 329 (relating to special treatment of interest holders). Cross References. Section 353 is referred to in sections 312, 356, 1571, 8415, 8615, 8815 of this title.
15 Pa.C.S. § 354 Amendment or abandonment of plan of conversion.
(a) Approval of amendment.--A plan of conversion in which the converting association is a domestic association may be amended in one of the following ways:
(1) In the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended.
(2) By its governors or interest holders in the manner provided in the plan, but an interest holder that was entitled to vote on or consent to approval of the plan is entitled to vote on or consent to any amendment of the plan that will change any of the following:
(i) The amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing, to be received by any of the interest holders of the converting association under the plan.
(ii) The public organic record, if any, or private organic rules of the converted association that will be in effect immediately after the conversion becomes effective, except for changes that do not require approval of the interest holders of the converted association under its organic law or organic rules.
(iii) Any other terms or conditions of the plan, if the change would:
(A) increase the interest holder liability to which the interest holder will be subject; or
(B) otherwise adversely affect the interest holder in any material respect.
(b) Approval of abandonment.--After a plan of conversion has been approved by a converting association that is a domestic association and before a statement of conversion becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic converting association may abandon the plan in the same manner as the plan was approved.
(c) Statement of abandonment.--If a plan of conversion is abandoned after a statement of conversion has been delivered to the department for filing and before the statement of conversion becomes effective, a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness), signed by the converting association, must be delivered to the department for filing before the statement of conversion becomes effective.
15 Pa.C.S. § 355 Statement of conversion; effectiveness.
(a) General rule.--A statement of conversion shall be signed by the converting association and delivered to the department for filing along with the certificates, if any, required by section 139 (relating to tax clearance of certain fundamental transactions).
(b) Contents.--A statement of conversion shall contain all of the following:
(1) With respect to the converting association:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) the date on which it was first created, incorporated, formed or otherwise came into existence;
(v) if it is a domestic filing association, the statute under which it was first created, incorporated, formed or otherwise came into existence;
(vi) if it is a domestic filing association, domestic limited liability partnership or registered foreign association:
(A) the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address); or
(B) if it is not required to maintain a registered office in this Commonwealth, the address, including street and number, if any, of its principal office;
(vii) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office; and
(viii) if it is a nonregistered foreign association, the address, including street and number, if any, of:
(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or
(B) if it is not required to maintain a registered or similar office, its principal office.
(2) With respect to the converted association:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) if it is a domestic filing association, domestic limited liability partnership or registered foreign association:
(A) the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109; or
(B) if it is not required to maintain a registered office in this Commonwealth, the address, including street and number, if any, of its principal office;
(v) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office; and
(vi) if it is a nonregistered foreign association, the address, including street and number, if any, of:
(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or
(B) if it is not required to maintain a registered or similar office, its principal office.
(3) If the statement of conversion is not to be effective on filing, the later date or date and time on which it will become effective.
(4) If the converting association is a domestic association, a statement that the plan of conversion was approved in accordance with this chapter or, if the converting association is a foreign association, a statement that the conversion was approved by the foreign association in accordance with the laws of its jurisdiction of formation.
(5) If the converted association is a domestic filing entity or domestic banking institution, its public organic record as an attachment. The public organic record does not need to state the name or address of an incorporator of a corporation, organizer of a limited liability company or similar person with respect to any other type of entity.
(6) If the converted association is a domestic limited liability partnership or a domestic limited liability limited partnership that is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration as an attachment.
(7) If the converted association is a domestic electing partnership, its statement of election as an attachment.
(8) (Deleted by amendment).
(c) Other provisions.--In addition to the requirements of subsection (b), a statement of conversion may contain any other provision not prohibited by law.
(d) Domestic converted association.--If the converted association is a domestic association, its public organic record, if any, must satisfy the requirements of the laws of this Commonwealth, except that the public organic record does not need to be signed and may omit any provision that is not required to be included in a restatement of the public organic record.
(e) Filing of plan.--A plan of conversion that is signed by the converting association and meets all the requirements of subsection (b) may be delivered to the department for filing instead of a statement of conversion and on filing has the same effect. If a plan of conversion is filed as provided in this subsection, references in this chapter to a statement of conversion refer to the plan of conversion filed under this subsection.
(f) Effectiveness of statement of conversion.--A statement of conversion is effective as provided in section 136(c) (relating to processing of documents by Department of State).
(g) Effectiveness of conversion.--If the converted association is a domestic association, the conversion is effective when the statement of conversion is effective. If the converted association is a foreign association, the conversion is effective on the later of:
(1) the date and time provided by the organic law of the converted association; or
(2) when the statement of conversion is effective.
(h) Cross references.--See sections 134 (relating to docketing statement) and 135 (relating to requirements to be met by filed documents). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 deleted subsec. (b)(8).
15 Pa.C.S. § 356 Effect of conversion.
(a) General rule.--When a conversion becomes effective, all of the following apply:
(1) The converted association is:
(i) Organized under and subject to the organic law of the converted association.
(ii) The same association without interruption as the converting association.
(iii) Deemed to have commenced its existence on the date the converting association commenced its existence in the jurisdiction in which the converting association was first created, incorporated, formed or otherwise came into existence, except for purposes of determining how the converted association is taxed.
(2) All property of the converting association continues to be vested in the converted association without reversion or impairment, and the conversion shall not constitute a transfer of any of that property.
(3) All debts, obligations and other liabilities of the converting association continue as debts, obligations and other liabilities of the converted association.
(4) Except as provided by law, all of the rights, privileges, immunities and powers of the converting association continue to be vested without change in the converted association.
(5) Liens on the property of the converting association shall not be impaired by the conversion.
(6) A claim existing or an action or a proceeding pending by or against the converting association may be prosecuted to judgment as if the conversion had not taken place, and the name of the converted association may be substituted for the name of the converting association in any pending action or proceeding.
(7) If a converted association is a filing association, its public organic record is effective.
(8) If the converted association is a limited liability partnership or a limited liability limited partnership that is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration is effective.
(9) If the converted association is an electing partnership, its statement of election is effective.
(10) Any private organic rules of the converted association that are to be in record form and were approved as part of the plan of conversion are effective.
(11) The interests in the converting association are converted or canceled in accordance with and as provided in the plan of conversion, and the interest holders of the converting association are entitled only to the rights provided to them under the plan and to any dissenters rights they have pursuant to section 317 (relating to contractual dissenters rights in entity transactions) or 353(c) (relating to approval of conversion).
(12) Except as otherwise provided in the plan of conversion or organic rules pursuant to section 352(c)
(relating to plan of conversion), the conversion does not constitute and shall not be deemed to result in a change of control of the converting association, and the converted association shall remain under the control of the same persons that controlled the converting association immediately before the conversion.
(b) No other rights.--The conversion does not give rise to any rights:
(1) that a third party would have upon a transfer of assets, merger, dissolution, liquidation or winding up of the converting association, except as provided in subsection
(a)(11); or
(2) that an interest holder or governor would have upon a dissolution, liquidation or winding up of the converting association, except as provided in the organic law or organic rules of the converting association.
(c) New interest holder liability.--When a conversion becomes effective, a person that becomes subject to interest holder liability with respect to a domestic association as a result of the conversion has interest holder liability only to the extent provided by the organic law of the association and only for those debts, obligations and other liabilities that arise after the conversion becomes effective.
(d) Prior interest holder liability.--When a conversion becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic converting association with respect to which the person had interest holder liability is as follows:
(1) The conversion does not discharge any interest holder liability under the organic law of the domestic converting association to the extent the interest holder liability arose before the conversion became effective.
(2) The person does not have interest holder liability under the organic law of the domestic converting association for any debt, obligation or other liability that arises after the conversion becomes effective.
(3) The organic law of the domestic converting association continues to apply to the release, collection or discharge of any interest holder liability preserved under paragraph (1) as if the conversion had not occurred.
(4) The person has whatever rights of contribution from any other person as are provided by other law or the organic law or organic rules of the domestic converting association with respect to any interest holder liability preserved under paragraph (1) as if the conversion had not occurred.
(e) Foreign converted association.--When a conversion becomes effective, a foreign association that is the converted association may be served with process in this Commonwealth for the collection and enforcement of any of its debts, obligations and other liabilities in accordance with applicable law.
(f) Association not dissolved.--A conversion does not require a domestic converting association to liquidate, dissolve or wind up its affairs and does not constitute or cause the liquidation or dissolution of the association.
(g) Taxes.--Any taxes, interest, penalties and public accounts of the Commonwealth claimed against the converting association that are settled, assessed or determined prior to or after the conversion shall be the liability of the converted association and, together with interest thereon, shall be a lien against the franchises and property of the converted association.
(h) Cross references.--See sections 416 (relating to withdrawal deemed on certain transactions) and 417 (relating to required withdrawal on certain transactions).
15 Pa.C.S. § 361 Division authorized.
(a) Domestic entities.--Except as provided in section 318 (relating to excluded entities and transactions) or this section, by complying with this subchapter, a domestic entity may divide into:
(1) the dividing association and one or more new associations that are either domestic entities or foreign associations; or
(2) two or more new associations that are either domestic entities or foreign associations.
(b) Foreign associations.--
(1) A foreign association may be created by the division of a domestic entity only if the division is authorized by the laws of the jurisdiction of formation of the foreign association.
(2) If the division is authorized by the laws of the jurisdiction of formation of the foreign association, one or more of the resulting associations created in a division of a foreign association may be a domestic entity.
(c) Exception.--A domestic banking institution that is a domestic entity may be a dividing association only if all of the resulting associations are domestic banking institutions.
(d) Cross reference.--See section 314 (relating to regulatory conditions and required notices and approvals).
15 Pa.C.S. § 362 Plan of division.
(a) General rule.--A domestic entity may become a dividing association under this chapter by approving a plan of division. The plan shall be in record form and contain all of the following:
(1) The name and type of the dividing association.
(2) A statement as to whether the dividing association will survive the division.
(3) The name, jurisdiction of formation and type of each new association.
(4) The manner of:
(i) If the dividing association survives the division and it is desired:
(A) Canceling some, but less than all, of the interests in the dividing association.
(B) Converting some, but less than all, of the interests in the dividing association into interests, securities, obligations, money, other property,
rights to acquire interests or securities, or any combination of the foregoing.
(ii) If the dividing association does not survive the division, canceling or converting the interests in the dividing association into interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing.
(iii) Allocating between or among the resulting associations the property of the dividing association that will not be owned by all of the resulting associations as tenants in common pursuant to section 367(a)(4) (relating to effect of division) and those liabilities of the dividing association as to which not all of the resulting associations will be liable jointly and severally pursuant to section 368(a)(3) (relating to allocation of liabilities in division).
(iv) Distributing the interests of the new associations.
(5) For each new association:
(i) its proposed public organic record if it will be a filing association; and
(ii) the full text of its private organic rules that will be in record form.
(6) If the dividing association will survive the division, any proposed amendments to its public organic record or private organic rules that are or will be in record form.
(7) Provisions, if any, providing special treatment of interests in the dividing association held by any interest holder or group of interest holders as authorized by and subject to section 329 (relating to special treatment of interest holders).
(8) The other terms and conditions of the division.
(9) Any other provision required by:
(i) the laws of this Commonwealth;
(ii) the laws of the jurisdiction of formation of any of the resulting associations; or
(iii) the organic rules of the dividing association.
(b) Optional contents.--In addition to the requirements of subsection (a), a plan of division may contain any other provision not prohibited by law.
(c) Description of property and liabilities.--It shall not be necessary for a plan of division to list each individual liability or item of property of the dividing association to be allocated to a resulting association so long as the liabilities and property are described in a reasonable manner.
(d) Cross reference.--See section 316(c) (relating to contents of plan). Cross References. Section 362 is referred to in sections 8415, 8615, 8815 of this title.
15 Pa.C.S. § 363 Approval of division.
(a) Approval by domestic entities.--Except as provided in section 364 (relating to division without interest holder approval) or subsection (d), a plan of division in which the dividing association is a domestic entity is not effective unless it has been approved in both of the following ways:
(1) The plan is approved by the domestic entity in accordance with the applicable provisions of Subchapter B (relating to approval of entity transactions).
(2) The plan is approved in record form by each interest holder, if any, of the domestic entity that will have interest holder liability for debts, obligations and other liabilities that arise after the division becomes effective, unless, as to an interest holder that does not approve the plan, both of the following apply:
(i) The organic rules of the domestic entity provide in record form for the approval of a division in which some or all of its interest holders become subject to interest holder liability by the vote or consent of fewer than all of the interest holders.
(ii) The interest holder voted for or consented in record form to that provision of the organic rules or became an interest holder after the adoption of the provision.
(b) Approval by foreign associations.--A division of a foreign association in which one or more of the resulting associations is a domestic entity is not effective unless it is approved by the foreign association in accordance with the laws of its jurisdiction of formation.
(c) Dissenters rights.--Except in the case of a plan of division adopted under section 364, if a shareholder of a domestic business corporation that is to be a dividing association objects to the plan of division and complies with Subchapter D of Chapter 15 (relating to dissenters rights), the shareholder shall be entitled to dissenters rights to the extent provided in that subchapter. See sections 317 (relating to contractual dissenters rights in entity transactions) and 329 (relating to special treatment of interest holders).
(d) Transitional approval requirements.--
(1) If a provision of the organic rules of a dividing association that is a domestic entity of the type described was adopted before the date indicated and requires for the proposal or adoption of a plan of merger a specific number or percentage of votes of governors or interest holders or other special procedures, a plan of division shall not be proposed or adopted by the governors or interest holders without that number or percentage of votes or compliance with the other special procedures:
(i) For a dividing association that is a domestic business corporation, before October 1, 1989.
(ii) For a dividing association that is a general partnership, before July 1, 2015.
(iii) For a dividing association that is a limited partnership, before February 5, 1995.
(iv) For a dividing association that is an unincorporated nonprofit association, before July 1, 2015.
(2) If a provision of any debt securities, notes or similar evidences of indebtedness for money borrowed, whether secured or unsecured, indentures or other contracts that were issued, incurred or executed by a dividing association that is a domestic entity of the type described before the date indicated, and the provision requires the consent of the obligee to a merger of the dividing association or treats such a merger as a default, the provision shall apply to a division of the dividing association as if it were a merger:
(i) For a dividing association that is a domestic business corporation, before August 21, 2001.
(ii) For a dividing association that is a general partnership, before July 1, 2015.
(iii) For a dividing association that is a limited partnership, before July 1, 2015.
(iv) For a dividing association that is an unincorporated nonprofit association, before July 1, 2015.
(3) When a provision described in paragraph (1) or (2) has been amended after the applicable date, the provision shall cease to be subject to the respective paragraph and shall thereafter apply only in accordance with its express terms. (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (c). Cross References. Section 363 is referred to in sections 312, 367, 1106, 1571, 5106, 8415, 8615, 8815 of this title.
15 Pa.C.S. § 364 Division without interest holder approval.
(a) General rule.--Unless otherwise restricted by its organic rules, a plan of division of a domestic dividing association shall not require the approval of the interest holders of the dividing association if all of the following are satisfied:
(1) The plan does not do any of the following:
(i) alter the jurisdiction of formation of the dividing association;
(ii) provide for special treatment; or
(iii) amend in any respect the provisions of the organic rules of the dividing association, except amendments that may be made without the approval of the interest holders.
(2) Either:
(i) the dividing association survives the division and all the interests in the new associations are owned solely by the dividing association; or
(ii) the interests in each new association are distributed as provided in subsection (b).
(3) The organic rules of each new association do not change the rights, duties or obligations of the interest holders or governors from those of the interest holders or governors of the dividing association, regardless of whether the dividing association survives the division.
(b) Distribution of interests.--The requirements for distributing interests in each new association referred to in subsection (a)(2)(ii) are as follows:
(1) if the dividing association is not a limited partnership, the dividing association has only one class of interests outstanding and the interests in each new association and any securities issued by a new association are distributed pro rata to the interest holders of the dividing association; or
(2) if the dividing association is a limited partnership:
(i) it has only one class of general partners and one class of limited partners;
(ii) each new association is a limited partnership; and
(iii) all of the following apply:
(A) the general partner interests in each new association are distributed pro rata to the general partners of the dividing limited partnership;
(B) the limited partner interests in each new association are distributed pro rata to the limited partners of the dividing limited partnership; and
(C) no securities of any of the new associations are distributed to any of the interest holders of the dividing limited partnership. (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) Cross References. Section 364 is referred to in sections 312, 363 of this title.
15 Pa.C.S. § 365 Amendment or abandonment of plan of division.
(a) Approval of amendment.--A plan of division in which the dividing association is a domestic entity may be amended in one of the following ways:
(1) In the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended.
(2) By its governors or interest holders in the manner provided in the plan, but an interest holder that was entitled to vote on or consent to approval of the plan is entitled to vote on or consent to any amendment of the plan that will change any of the following:
(i) The amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing, to be received by any of the interest holders of the dividing association under the plan.
(ii) The public organic record, if any, or private organic rules of any of the resulting associations that will be in effect immediately after the division becomes effective, except for changes that do not require approval of the interest holders of the resulting association under its organic law or organic rules.
(iii) Any other terms or conditions of the plan, if the change would:
(A) increase the interest holder liability to which the interest holder will be subject; or
(B) otherwise adversely affect the interest holder in any material respect.
(b) Approval of abandonment.--After a plan of division has been approved by a domestic entity that is the dividing association and before a statement of division becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic entity that is the dividing association may abandon the plan in the same manner as the plan was approved.
(c) Statement of abandonment.--If a plan of division is abandoned after a statement of division has been delivered to the department for filing and before the statement becomes effective, a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness), signed by the dividing association, must be delivered to the department for filing before the time the statement of division becomes effective. The statement of abandonment shall take effect on filing, and the division shall be abandoned and shall not become effective.
15 Pa.C.S. § 366 Statement of division; effectiveness.
(a) General rule.--A statement of division shall be signed by the dividing association and delivered to the department for filing along with the certificates, if any, required by section 139 (relating to tax clearance of certain fundamental transactions).
(b) Contents.--A statement of division shall contain all of the following:
(1) With respect to the dividing association:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) if it is a domestic filing association, domestic limited liability partnership or registered foreign association, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address);
(v) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office; and
(vi) if it is a nonregistered foreign association, the address, including street and number, if any, of:
(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or
(B) if it is not required to maintain a registered or similar office, its principal office.
(2) A statement as to whether the dividing association will survive the division.
(3) With respect to each resulting association created by the division:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) if it is a domestic filing association, domestic limited liability partnership or registered foreign association, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109;
(v) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office; and
(vi) if it is a nonregistered foreign association, the address, including street and number, if any, of:
(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or
(B) if it is not required to maintain a registered or similar office, its principal office.
(4) If the statement of division is not to be effective on filing, the later date or date and time on which it will become effective.
(5) A statement that the division was approved in the following ways:
(i) By a dividing association that is a domestic entity, in accordance with this chapter.
(ii) By a dividing association that is a foreign association, in accordance with the laws of its jurisdiction of formation.
(6) If the dividing association is a domestic filing entity and survives the division, any amendment to its public organic record approved as part of the plan of division.
(7) For each resulting association created by the division that is a domestic entity, its public organic record, if any, as an attachment. The public organic record does not need to state the name or address of an incorporator
of a corporation, organizer of a limited liability company or similar person with respect to any other type of entity.
(8) For each new association that is a domestic limited liability partnership or a domestic limited liability limited partnership that is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration as an attachment.
(9) For each new association that is an electing partnership, its statement of election as an attachment.
(10) The property and liabilities of the dividing association that are to be allocated to each resulting association, but it shall not be necessary to list in the statement of division each individual liability or item of property of the dividing association to be allocated to a resulting association so long as the liabilities and property are described in a reasonable manner.
(c) Other provisions.--In addition to the requirements of subsection (b), a statement of division may contain any other provision not prohibited by law.
(d) New domestic entity.--If a new association is a domestic entity, its public organic record, if any, must satisfy the requirements of the laws of this Commonwealth, except that it does not need to be signed and may omit any provision that is not required to be included in a restatement of the public organic record.
(e) Filing of plan.--A plan of division that is signed by the dividing association and meets all of the requirements of subsection (b) may be delivered to the department for filing instead of a statement of division and on filing has the same effect. If a plan of division is filed as provided in this subsection, references in this chapter to a statement of division refer to the plan of division filed under this subsection.
(f) Effectiveness of statement of division.--A statement of division is effective as provided in section 136(c) (relating to processing of documents by Department of State).
(g) Effectiveness of division.--A division takes effect as follows:
(1) If the division is one in which all of the resulting associations are domestic associations, the division is effective when the statement of division is effective.
(2) If the division is one in which one or more of the resulting associations is a foreign association, the division is effective on the later of:
(i) the effectiveness of the statement of division; or
(ii) when the division is effective under the laws of each of the jurisdictions of formation of the foreign resulting associations.
(h) Coordination of transactions.--A new association may be a party to another transaction under this chapter that takes effect simultaneously with the division. The new association shall be deemed to exist before the effectiveness of the other transaction, but solely for the purpose of being a party to the other transaction. The plan relating to the other transaction shall be deemed to have been approved by the new association if the plan is approved by the dividing association in connection with its approval of the plan of division. The statement that is delivered to the department for filing with respect to the other transaction shall state that it was approved by the new association under this subsection.
(i) Cross references.--See sections 134 (relating to docketing statement) and 135 (relating to requirements to be met by filed documents). (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days) 2016 Amendment. Act 170 relettered former subsec. (h) to subsec. (i) and added a new subsec. (h).
15 Pa.C.S. § 367 Effect of division.
(a) General rule.--When a division becomes effective, all of the following apply:
(1) If the dividing association is to survive the division:
(i) It continues to exist.
(ii) Its public organic record, if any, is amended as provided in the statement of division.
(iii) Its private organic rules that are to be in record form, if any, are amended to the extent provided in the plan of division.
(iv) Except as otherwise provided by law, all of its rights, privileges, immunities and powers continue to be vested in it without change.
(2) If the dividing association is not to survive the division, the separate existence of the dividing association ceases.
(3) With respect to each new association, all of the following apply:
(i) It comes into existence.
(ii) Any property allocated to it vests in the new association without reversion or impairment, and the division shall not constitute a transfer, directly or indirectly, of any of that property.
(iii) Its public organic record, if any, and private organic rules are effective.
(iv) If it is a limited liability partnership, its statement of registration is effective.
(v) If it is a limited liability limited partnership and is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration is effective.
(vi) If it is an electing partnership, its statement of election is effective.
(vii) Except as otherwise provided by law, all of the rights, privileges, immunities and powers of the dividing association necessary or desirable for the conduct of the affairs of the new association vest in it without change.
(4) Property of the dividing association:
(i) That is allocated by the plan of division either:
(A) vests in the new associations as provided in the plan of division; or
(B) remains vested in the dividing association.
(ii) That is not allocated by the plan of division:
(A) remains vested in the dividing association, if the dividing association survives the division; or
(B) is allocated to and vests equally in the resulting associations as tenants in common, if the dividing association does not survive the division.
(iii) Vests as provided in this paragraph without transfer, reversion or impairment.
(5) A resulting association to which a cause of action is allocated as provided in paragraph (4) may be substituted or added in any pending action or proceeding to which the dividing association is a party at the effective time of the division.
(6) The liabilities of the dividing association are allocated between or among the resulting associations as provided in section 368 (relating to allocation of liabilities in division), and the division shall not constitute a transfer, directly or indirectly, of any of those liabilities.
(7) The interests in the dividing association that are to be converted or canceled in the division are converted or canceled, and the interest holders of those interests are entitled only to the rights provided to them under the plan of division and to any dissenters rights they may have pursuant to section 317 (relating to contractual dissenters rights in entity transactions) or 363(c) (relating to approval of division).
(b) Dividing association not dissolved.--Except as provided in the organic law or organic rules of the dividing association, the division does not give rise to any rights that an interest holder, governor or third party would have upon a dissolution, liquidation or winding up of the dividing association.
(c) New interest holder liability.--When a division becomes effective, a person that did not have interest holder liability with respect to the dividing association and that becomes subject to interest holder liability with respect to an association as a result of the division has interest holder liability only to the extent provided by the organic law of the association and only for those liabilities that arise after the division becomes effective.
(d) Prior interest holder liability.--When a division becomes effective, the interest holder liability of a person that ceases to hold an interest in the dividing association that is a domestic entity with respect to which the person had interest holder liability is as follows:
(1) The division does not discharge any interest holder liability under the organic law of the domestic entity to the extent the interest holder liability arose before the division became effective.
(2) The person does not have interest holder liability under the organic law of the domestic entity for any debt, obligation or other liability that arises after the division becomes effective.
(3) The organic law of the domestic entity continues to apply to the release, collection or discharge of any interest holder liability preserved under paragraph (1) as if the division had not occurred.
(4) The person has whatever rights of contribution from any other person as are provided by other law or the organic law or organic rules of the domestic entity with respect to any interest holder liability preserved by paragraph (1) as if the division had not occurred.
(e) Registration of registered foreign association.--When a division of a registered foreign association in which at least one of the resulting associations is a domestic entity becomes effective, the registration to do business of the dividing association is canceled if it does not survive the division.
(f) Real property.--Except with regard to the real property of a dividing association that is a domestic nonprofit corporation, the allocation of any fee or freehold interest or
leasehold having a remaining term of 30 years or more in any tract or parcel of real property situate in this Commonwealth owned by a dividing association, including property owned by a foreign association dividing solely under the laws of another jurisdiction, to a new association is not effective until one of the following documents is filed by the office for the recording of deeds of the county, or each of them, in which the tract or parcel is situated:
(1) A deed, lease or other instrument of confirmation describing the tract or parcel.
(2) A duly executed duplicate original copy of the statement of division.
(3) A copy of the statement of division certified by the department.
(4) A declaration of acquisition stating the value of real estate holdings in the county of the new association as an acquired association.
(g) Secured collateral.--The allocation to a new association of property that is collateral covered by an effective financing statement shall not be effective until a new financing statement naming the new association as a debtor is effective under 13 Pa.C.S. Div. 9 (relating to secured transactions) as enacted in the relevant jurisdiction.
(h) Vehicles.--The provisions of 75 Pa.C.S. § 1114 (relating to transfer of vehicle by operation of law) shall not be applicable to an allocation of ownership of any motor vehicle, trailer or semitrailer to a new association under this section or under a similar law of any other jurisdiction, but any such allocation shall be effective only upon compliance with the requirements of 75 Pa.C.S. § 1116 (relating to issuance of new certificate following transfer), unless the dividing association is a domestic nonprofit corporation.
(i) Disposition of interests.--Unless otherwise provided in the plan of division, the interests and any securities or obligations of each new association shall be distributed to:
(1) the dividing association, if it survives the division; or
(2) the holders of the common or other residuary interest of the dividing association that do not assert dissenters rights, pro rata, if the dividing association does not survive the division.
(j) Distribution tests not applicable.--An allocation, directly or indirectly, of property, liabilities or interests in a division is not a distribution for purposes of the organic law of the dividing association or any of the resulting associations. (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsecs. (a)(1), (3) and
(6) and (f) intro. par. and added subsec. (j). 2016 Amendment. Act 170 amended subsec. (a)(2) and (6). Cross References. Section 367 is referred to in sections 314, 362 of this title.
15 Pa.C.S. § 368 Allocation of liabilities in division.
(a) General rule.--Except as provided in this section, when a division becomes effective, a resulting association is responsible:
(1) Individually for the liabilities the resulting association undertakes or incurs in its own name after the division.
(2) Individually for the liabilities of the dividing association that are allocated to or remain the liability of that resulting association to the extent specified in the plan of division, but not for liabilities allocated in the plan to another resulting association.
(3) Jointly and severally with the other resulting associations for the liabilities of the dividing association that are not allocated by the plan of division.
(b) Joint and several liability.--If the allocation of a liability in a division is determined by the court as defined in section 102 (relating to definitions) to be ineffective or voidable under 12 Pa.C.S. Ch. 51 (relating to voidable transactions) as of the effective date of the division, all of the following apply:
(1) The allocation of the liability in the plan of division is ineffective and the liability becomes the liability of all of the resulting associations, jointly and severally.
(2) The validity and effectiveness of the division are not affected by the action or proceeding or the determination of the court.
(c) Breach of obligation.--If a division breaches an obligation of the dividing association, all of the resulting associations are liable, jointly and severally, for the breach, but the validity and effectiveness of the division are not affected thereby.
(d) Application of voidable transactions law.--In applying 12 Pa.C.S. Ch. 51 to a division under subsection (b):
(1) 12 Pa.C.S. Ch. 51 applies to the dividing association as follows:
(i) If it does not survive the division, it is not subject to that chapter.
(ii) If it survives the division, it is subject to that chapter only in its capacity as a resulting association.
(2) 12 Pa.C.S. Ch. 51 applies to each resulting association as follows:
(i) The association is treated as a debtor.
(ii) Each liability allocated to the association is treated as an obligation incurred by the debtor.
(iii) The association is treated as not having received a reasonably equivalent value in exchange for incurring the obligation.
(iv) The property allocated to the association is treated as remaining property.
(3) The remedy of joint and several liability under subsection (b)(1) is deemed to be the remedy of avoidance of the transfer or obligation under 12 Pa.C.S. § 5107(a)(1) (relating to remedies of creditor).
(e) Distribution tests not applicable.--(Deleted by amendment).
(f) Liens and other charges.--Liens, security interests and other charges on the property of the dividing association are not impaired by the division, notwithstanding any otherwise enforceable allocation of liabilities of the dividing association.
(g) Security agreements.--If the dividing association is bound by a security agreement governed by 13 Pa.C.S. Div. 9 (relating to secured transactions) as enacted in any jurisdiction and the security agreement provides that the security interest attaches to after-acquired collateral, each resulting association is bound by the security agreement.
(h) Creditors and guarantors.--An allocation of a liability does not:
(1) Affect the rights under other law of a creditor owed payment of the liability or performance of the obligation that creates the liability, except that those rights are available only against an association responsible for the liability or obligation under this section.
(2) Release or reduce the obligation of a surety or guarantor of the liability or obligation.
(i) Regulatory approvals.--The conditions in this section for freeing one or more of the resulting associations from the liabilities of the dividing association and for allocating some or all of the liabilities of the dividing association shall be conclusively deemed to have been satisfied if the plan of division has been approved by the Department of Banking and Securities, the Insurance Department or the Pennsylvania Public Utility Commission in a final order issued after August 21, 2001, that is not subject to further appeal.
(j) Taxes.--Any taxes, interest, penalties and public accounts of the Commonwealth claimed against the dividing association for periods prior to the effective date of the division that are settled, assessed or determined prior to or after the division shall be the liability of all of the resulting associations and, together with interest thereon, shall be a lien against the franchises and property of each resulting association. Upon the application of the dividing association, the Department of Revenue, with the concurrence of the Department of Labor and Industry, shall release one or more, but less than all, of the resulting associations from liability and liens for all taxes, interest, penalties and public accounts of the dividing association due the Commonwealth for periods prior to the effective date of the division if those departments are satisfied that the public revenues will be adequately secured. (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsecs. (a)(2), (b) and
(d) and deleted subsec. (e). 2016 Amendment. Act 170 amended subsec. (j). Cross References. Section 368 is referred to in sections 362, 367 of this title.
15 Pa.C.S. § 371 Domestication authorized.
(a) Domestic entities.--Except as provided in section 318 (relating to excluded entities and transactions), by complying with this chapter, a domestic entity may become a domesticated entity of the same type in a foreign jurisdiction if the
domestication is authorized by the laws of the foreign jurisdiction.
(b) Foreign entities.--By complying with the applicable provisions of this subchapter, a foreign entity may become a domestic entity of the same type in this Commonwealth if this title provides for the formation of that type of entity.
(c) Cross reference.--See section 314 (relating to regulatory conditions and required notices and approvals). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (a).
15 Pa.C.S. § 372 Plan of domestication.
(a) General rule.--A domestic entity may become a foreign entity of the same type by approving a plan of domestication. The plan shall be in record form and contain all of the following:
(1) The name and type of the domesticating entity.
(2) The name and jurisdiction of formation of the domesticated entity.
(3) The manner, if any, of canceling or converting those interests in the domesticating entity, if any, that are to receive special treatment as authorized by and subject to section 329 (relating to special treatment of interest holders).
(4) The proposed public organic record of the domesticated entity if it is a filing entity.
(5) The full text of the private organic rules of the domesticated entity that are proposed to be in record form.
(6) The other terms and conditions of the domestication.
(7) Any other provision required by:
(i) laws of this Commonwealth;
(ii) the laws of the jurisdiction of formation of the foreign domesticated entity; or
(iii) the organic rules of the domesticating entity.
(b) Optional contents.--In addition to the requirements of subsection (a), a plan of domestication may contain any other provision not prohibited by law.
(c) Terms of interests.--Except as provided in the plan of domestication pursuant to section 329, the terms of the interests in the domesticated entity and the rights of the interest holders in the domesticated entity shall be substantially the same as the terms of the interests and the rights of the interest holders in the domesticating entity, except to the extent a different term or right is required by a provision of the organic law of the domesticated entity that cannot be varied in its organic rules.
(d) Cross reference.--See section 316(c) (relating to contents of plan). Cross References. Section 372 is referred to in sections 8415, 8615, 8815 of this title.
15 Pa.C.S. § 373 Approval of domestication.
(a) Approval by domestic entities.--A plan of domestication in which the domesticating entity is a domestic entity is not effective unless it has been approved by the domestic entity in accordance with the applicable provisions of Subchapter B (relating to approval of entity transactions).
(b) Approval by foreign entities.--A plan of domestication in which the domesticating entity is a foreign entity is not effective unless it has been approved in one of the following ways:
(1) In accordance with the laws of the jurisdiction of formation of the foreign entity.
(2) By at least a majority of the votes cast with respect to approval of the domestication by all interest holders of the foreign entity entitled to vote generally on a merger to which the foreign entity is a party if the laws of the foreign entity's jurisdiction of formation does not provide for a domestication of the foreign entity.
(c) Cross references.--See sections 317 (relating to contractual dissenters rights in entity transactions) and 329 (relating to special treatment of interest holders). Cross References. Section 373 is referred to in sections 312, 375 of this title.
15 Pa.C.S. § 374 Amendment or abandonment of plan of domestication.
(a) Approval of amendment.--A plan of domestication in which the domesticating entity is a domestic entity may be amended in one of the following ways:
(1) In the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended.
(2) By the governors or interest holders of the domestic entity in the manner provided in the plan, but an interest holder that was entitled to vote on or consent to approval of the plan is entitled to vote on or consent to any amendment of the plan that will change any of the following:
(i) The amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing, to be received by any of the interest holders of the domesticating entity under the plan.
(ii) The public organic record, if any, or private organic rules of the domesticated entity that will be in effect immediately after the domestication becomes effective, except for changes that do not require approval of the interest holders of the domesticated entity under its organic law or organic rules.
(iii) Any other terms or conditions of the plan, if the change would adversely affect the interest holder in any material respect.
(b) Approval of abandonment.--After a plan of domestication has been approved by a domestic entity that is the domesticating entity and before a statement of domestication becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic entity that is the domesticating entity may abandon the plan in the same manner as the plan was approved.
(c) Statement of abandonment.--If a plan of domestication is abandoned after a statement of domestication has been delivered to the department for filing and before the statement becomes effective, a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness), signed by the domesticating entity, must be delivered to the department for filing before the time the statement of domestication becomes effective.
15 Pa.C.S. § 375 Statement of domestication; effectiveness.
(a) General rule.--A statement of domestication shall be signed by the domesticating entity and delivered to the department for filing along with the certificates, if any, required by section 139 (relating to tax clearance of certain fundamental transactions).
(b) Contents.--A statement of domestication shall contain all of the following:
(1) With respect to the domesticating entity:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) the date on which it was first created, incorporated, formed or otherwise came into existence;
(v) if it is a domestic filing entity, domestic limited liability partnership or registered foreign association, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address);
(vi) if it is a domestic entity that is not a domestic filing entity or limited liability partnership, the address, including street and number, if any, of its principal office; and
(vii) if it is a nonregistered foreign association, the address, including street and number, if any, of:
(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or
(B) if it is not required to maintain a registered or similar office, its principal office.
(2) With respect to the domesticated entity:
(i) its name;
(ii) its jurisdiction of formation;
(iii) its type;
(iv) if it is a domestic filing entity, domestic limited liability partnership or registered foreign association, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109;
(v) if it is a domestic entity that is not a domestic filing entity or limited liability partnership, the address, including street and number, if any, of its principal office; and
(vi) if it is a nonregistered foreign association, the address, including street and number, if any, of:
(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or
(B) if it is not required to maintain a registered or similar office, its principal office.
(3) If the statement of domestication is not to be effective on filing, the later date or date and time on which it will become effective.
(4) If the domesticating entity is a domestic entity, a statement that the plan of domestication was approved in accordance with Subchapter B (relating to approval of entity transactions) or, if the domesticating entity is a foreign entity, a statement that the domestication was approved in accordance with section 373(b) (relating to approval of domestication).
(5) If the domesticated entity is a domestic filing entity, its public organic record as an attachment. The public organic record does not need to state the name or address of an incorporator of a corporation, organizer of a limited liability company or similar person with respect to any other type of entity.
(6) If the domesticated entity is a domestic limited liability partnership or a domestic limited liability limited partnership that is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration as an attachment.
(7) If the domesticated entity is an electing partnership, its statement of election as an attachment.
(8) If the domesticating entity is to be a domestic entity in both this Commonwealth and the foreign jurisdiction, a statement to that effect.
(c) Other provisions.--In addition to the requirements of subsection (b), a statement of domestication may contain any other provision not prohibited by law.
(d) Public organic record of new domestic entity.--If the domesticated entity is a domestic entity, its public organic record, if any, must satisfy the requirements of the laws of this Commonwealth, except that it does not need to be signed and may omit any provision that is not required to be included in a restatement of the public organic record.
(e) Filing of plan.--A plan of domestication that is signed by a domesticating entity that is a domestic entity and meets all of the requirements of subsection (b) may be delivered to the department for filing instead of a statement of domestication and on filing has the same effect. If a plan of domestication is filed as provided in this subsection, references in this chapter to a statement of domestication refer to the plan of domestication filed under this subsection.
(f) Effectiveness of domestication.--A domestication in which the domesticated entity is a domestic entity is effective when the statement of domestication is effective under section 136(c) (relating to processing of documents by Department of State). A domestication in which the domesticated entity is a foreign entity becomes effective on the later of:
(1) the date and time provided by the organic law of the domesticated entity; or
(2) when the statement of domestication is effective.
(g) Cross references.--See sections 134 (relating to docketing statement) and 135 (relating to requirements to be met by filed documents). Cross References. Section 375 is referred to in section 376 of this title.
15 Pa.C.S. § 376 Effect of domestication.
(a) General rule.--When a domestication becomes effective, all of the following apply:
(1) The domesticated entity is:
(i) organized under and subject to the organic law of the domesticated entity;
(ii) the same entity without interruption as the domesticating entity;
(iii) deemed to have commenced its existence on the date the domesticating entity commenced its existence in the jurisdiction in which the domesticating entity was first created, formed, incorporated or otherwise came into existence; and
(iv) also organized under and subject to the organic law of the domesticating entity if the statement of domestication includes the statement provided for in section 375(b)(8) (relating to statement of domestication; effectiveness).
(2) All property of the domesticating entity continues to be vested in the domesticated entity without transfer, reversion or impairment.
(3) All debts, obligations and other liabilities of the domesticating entity continue as debts, obligations and other liabilities of the domesticated entity.
(4) Except as provided by law, all of the rights, privileges, immunities and powers of the domesticating entity continue to be vested without change in the domesticated entity.
(5) The name of the domesticated entity may be substituted for the name of the domesticating entity in any pending action or proceeding.
(6) If the domesticated entity is a filing entity, its public organic record is effective and is binding on its interest holders.
(7) If the domesticated entity is a domestic limited liability partnership or a limited liability limited partnership that is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration is effective.
(8) If the domesticated entity is an electing partnership, its statement of election is effective.
(9) The private organic rules of the domesticated entity that are to be in record form, if any, approved as part of the plan of domestication are effective.
(10) The interest holders in the domesticating entity are interest holders in the domesticated entity except to the extent that an interest holder does not receive interests in the domesticated entity pursuant to a provision in the plan of domestication for special treatment pursuant to section 329 (relating to special treatment of interest holders).
(b) No dissolution rights.--Except as otherwise provided in the organic law or organic rules of a domestic domesticating entity, the domestication does not give rise to any rights that an interest holder, governor or third party would have upon a dissolution, liquidation or winding up of the domesticating entity.
(c) Collection of liabilities.--When a domestication becomes effective, a foreign domesticated entity may be served with process in this Commonwealth for the collection and enforcement of any of its debts, obligations and other liabilities in accordance with applicable law.
(d) New interest holder liability.--When a domestication becomes effective, a person that becomes subject to interest holder liability with respect to a domestic association as a result of the domestication has interest holder liability only to the extent provided by the organic law of the association and only for those debts, obligations and other liabilities that arise after the domestication is effective.
(e) Prior interest holder liability.--When a domestication becomes effective, the following rules apply:
(1) The domestication does not discharge any interest holder liability under the organic law of a domesticating domestic entity to the extent the interest holder liability arose before the domestication became effective.
(2) A person does not have interest holder liability under the organic law of a domestic domesticating entity for any debt, obligation or other liability that arises after the domestication becomes effective.
(3) The organic law of a domestic domesticating entity continues to apply to the release, collection or discharge of any interest holder liability preserved under paragraph
(1) as if the domestication had not occurred.
(4) A person has whatever rights of contribution from any other person as are provided by other law or the organic rules of a domestic domesticating entity with respect to any interest holder liability preserved under paragraph (1) as if the domestication had not occurred.
(f) Service of process.--(Deleted by amendment).
(g) No dissolution.--A domestication does not require a domestic domesticating entity to liquidate, dissolve or wind up its affairs and does not constitute or cause the liquidation or dissolution of the entity.
(h) Taxes.--Any taxes, interest, penalties and public accounts of the Commonwealth claimed against the domesticating entity that are settled, assessed or determined prior to or after the domestication shall be the liability of the domesticated entity and, together with interest thereon, shall be a lien against the franchises and property of the domesticated entity.
(i) Cross references.--See sections 416 (relating to withdrawal deemed on certain transactions) and 417 (relating to required withdrawal on certain transactions). (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days) 2016 Amendment. Act 170 deleted subsec. (f).
15 Pa.C.S. § 381 Grounds for administrative dissolution or cancellation.
(a) General rule.--The department may commence a proceeding under section 382 (relating to procedure and effect) to administratively dissolve a domestic filing entity or cancel the statement of registration of a domestic limited liability partnership or the statement of election of an electing partnership that is not also a limited partnership if the entity does not deliver an annual report to the department within six months after the annual report is due.
(b) Transitional provision.--Subsection (a) applies with respect to annual reports due on or after January 4, 2027. Cross References. Section 381 is referred to in section 382 of this title.
15 Pa.C.S. § 382 Procedure and effect.
(a) Notice of initial determination.--If the department determines that grounds exist under section 381 (relating to grounds for administrative dissolution or cancellation) for administratively dissolving a domestic filing entity or canceling the statement of registration of a domestic limited
liability partnership or the statement of election of an electing partnership that is not also a limited partnership, the department must deliver to the entity a notice of the department's determination at the entity's registered office, if any, and the address of the entity's principal office as shown in its most recently filed annual report.
(b) Dissolution or cancellation.--If an entity does not deliver to the department for filing, within 60 days after delivery of the notice required by subsection (a), the required annual report or demonstrate to the satisfaction of the department that the annual report was delivered to the department, the department must:
(1) if the entity is a domestic filing entity, administratively dissolve the entity by filing a statement of administrative dissolution that states the effective date of dissolution, which shall not be less than 60 days after the date of delivery of the notice required by subsection
(a);
(2) if the entity is a domestic limited liability partnership or an electing partnership that is not also a limited partnership, administratively cancel its statement of registration or statement of election by filing a statement of administrative cancellation that states the effective date of cancellation.
(c) Notice of action by department.--The department must deliver a copy of the statement of administrative dissolution or statement of administrative cancellation to the entity at its registered office, if any, and the address of its principal office as shown in its most recently filed annual report.
(d) Effect of dissolution.--A domestic filing entity that is administratively dissolved:
(1) continues its existence as the same type of entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets in the manner provided in its organic law or to apply for reinstatement under section 383 (relating to reinstatement);
(2) continues to be managed by or under the direction of its governors, who:
(i) continue as such;
(ii) have full power to wind up its activities and affairs or apply for reinstatement; and
(iii) remain subject to the same standards of conduct as before administrative dissolution; and
(3) is not currently subsisting for purposes of section 145 (relating to subsistence certificate) during the period it is administratively dissolved.
(e) Effect of cancellation.--A domestic limited liability partnership or electing partnership that is not also a limited partnership and whose statement of registration or statement of election is administratively canceled continues its existence as a general partnership but not as a limited liability partnership or electing partnership. Cross References. Section 382 is referred to in sections 381, 383 of this title.
15 Pa.C.S. § 383 Reinstatement.
(a) Application for reinstatement.--An entity that has been the subject of action under section 382(b) (relating to procedure and effect) may deliver to the department an application for reinstatement along with the reinstatement fee required by section 153 (relating to fee schedule). The application must be signed by the entity and state:
(1) the name of the entity at the time of the action under section 382 and, if needed, a name that is available under Subchapter A of Chapter 2 (relating to names);
(2) subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, if any, including street and number, if any, of the entity's registered office;
(3) the principal office of the entity at the time of the application for restatement; and
(4) either:
(i) that the grounds for action under section 382 did not exist; or
(ii) that the most recent annual report not previously filed is attached to the application for reinstatement along with the fee for each of the annual reports that should have been paid under section 153.
(b) Action by department.--If the department determines that an application under subsection (a) meets the requirements of that subsection and is accompanied by any payment required by subsection (a)(4)(ii), the department shall:
(1) cancel the prior action under section 382 by filing a statement of reinstatement that includes the effective date of reinstatement within 30 days after receipt by the department of the application; and
(2) deliver a copy to the entity.
(c) Effect of reinstatement.--When reinstatement under this section is effective, the following rules apply:
(1) Except as provided in paragraphs (4) and (5), the reinstatement relates back to and takes effect as of the effective date of the administrative dissolution or cancellation.
(2) The activities of the entity between the date of its administrative dissolution and the date of its reinstatement are valid as if the administrative dissolution had never occurred.
(3) If the entity is a limited liability partnership, limited liability limited partnership or electing partnership, its statement of registration, the provisions of its certificate of limited partnership required by section 8201(f) (relating to scope) or its statement of election is reinstated as if its administrative cancellation had never occurred.
(4) If the application for reinstatement includes a name other than the name of the entity at the time of the administrative dissolution or cancellation because the original name is no longer available under Subchapter A of Chapter 2, the statement of reinstatement shall have the effect of amending:
(i) if the entity is a domestic filing entity, its public organic record to provide for the new name;
(ii) if the entity is a domestic limited liability partnership, its statement of registration to provide for the new name; or
(iii) if the entity is a electing partnership that is not also a limited partnership, its statement of election to provide for the new name.
(5) The rights of a person arising out of an act in reliance on the administrative dissolution or revocation of the statement of registration or statement of election before the reinstatement is effective are not affected.
(d) Cross reference.--See section 153(a)(19). Cross References. Section 383 is referred to in sections 153, 382, 384 of this title.
15 Pa.C.S. § 384 Rejection of reinstatement.
(a) Notice of rejection.--If the department rejects an entity's application for reinstatement under section 383 (relating to reinstatement) or fails to reinstate the entity within the time required by section 383(b)(1), the department shall deliver to the entity a notice in record form that explains the reasons for the rejection or failure.
(b) Cross reference.--See section 137 (relating to court to pass upon rejection of documents by Department of State).
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=15Fetched: 10/16/2026