Mergers in Idaho

The Idaho Model Entity Act ("MET Act") authorizes mergers of Idaho entities with other Idaho entities or foreign entities. I.C. § 30-22-201(a)(1). Moreover, two or more foreign entities may merge into an Idaho entity. I.C. § 30-22-201(a)(2). 

Plan of Merger

An Idaho entity may be a party to a merger if it approves a "plan of merger." I.C. § 30-22-202(a). The "plan of merger" is a written document that states:

  • The merging entity's name, jurisdiction where it was formed, and the type of entity. I.C. § 30-22-202(a)(1).
  • The surviving entity's name, jurisdiction where it was formed, and the type of entity. I.C. § 30-22-202(a)(2). 
  • How interests will be converted to other interests, securities, obligations, money, other property, or rights. I.C. § 30-22-202(a)(3).
  • Proposed amendments to "public organic records" or "private organic rules" of a surviving entity that exists before the merger. I.C. § 30-22-202(a)(4)(A)-(B). 
  • Proposed "public organic records" or "private organic rules" of an entity created as part of a merger. I.C. § 30-22-202(a)(5)(A)-(B).
  • Other terms and conditions of the merger. I.C. § 30-22-202(a)(6).
  • Any other provision required by law or the "organic rules" of a merging entity. I.C. § 30-22-202(a)(7). 

The "plan of merger" may contain other terms as long as they are not prohibited by law. I.C. § 30-22-202(b). 

Approval of a Plan of Merger

An Idaho entity may only merge if the Plan of Merger is approved in accordance with law or by all its interest holders. I.C. § 30-22-203(a)(1). If the entity is a business corporation or a nonprofit corporation, then all interest holders of an Idaho entity that will be liable for debts, obligations, and other liabilities that arise after the merger must approve the plan as well. I.C. § 30-22-203(a)(2). That said, if the entity is not a business corporation or a nonprofit corporation, then "organic rules" of the entity may state that fewer than all of the interest holders may approve a plan of merger. I.C. § 30-22-203(a)(2)(A)-(B). 

If a foreign entity is involved, the plan of merger must be approved in compliance with the laws of the jurisdiction where it was formed. I.C. § 30-22-203(b).

Amendment of the Plan of Merger

A Plan of Merger may be amended if all the parties to the merger agree to the amendment. I.C. § 30-22-204(a). The Plan of Merger may also state how it is amended. I.C. § 30-22-204(b)(1). 

However, interest holders who were entitled to vote on or consent to a merger are entitled to vote or consent to a change to the plan of merger that:

  • Changes the amount or kind of "interests, securities, obligations, money, other property, or rights to acquire interests or securities, or any combination of the foregoing," or any interest the holder is to receive. I.C. § 30-22-204(b)(2)(A). 
  • Changes the "public organic record" or "private organic rules" of the surviving entity. I.C. § 30-22-204(b)(2)(B).
  • Materially affects the interest holder in any material respect. I.C. § 30-22-204(b)(2)(C). 

Abandonment of a Plan of Merger Before it is Effective

A Plan of Merger may be abandoned after it is approved but before it becomes effective. I.C. § 30-22-204(c). This is accomplished in one of two ways. First, if the Plan of Merger states how it can be abandoned, according to its terms. Id. Second, if the Plan of Merger is silent as to how it is abandoned, then by same manner as the plan was approved. Id.

If a Statement of Merger has been delivered to the Secretary of State but it is not yet effective, a Statement of Abandonment must be delivered to the Secretary of State. I.C. § 30-22-204(d). 

The Statement of Merger

A Statement of Merger must be delivered to the Secretary of State. I.C. § 30-22-205(a). It must be signed by each "merging entity." Id. 

The Statement of Merger must state the following:

  • The name, jurisdiction of formation, and type of entity of each merging entity that is not the surviving entity. I.C. § 30-22-205(b)(1).
  • The name, jurisdiction of formation, and type of entity of the surviving entity. I.C. § 30-22-205(b)(2).
  • If the Statement of Merger is not effective when it is filed, the date the merger is effective is no more than 90 days after filing. I.C. § 30-22-205(b)(3).
  • A statement that each merging entity approved the merger. I.C. § 30-22-205(b)(4).
  • Amendments to the "organic public record" if the surviving entity exists before the merger. I.C. § 30-22-205(b)(5).
  • The "organic public record" of a surviving entity created by the merger. I.C. § 30-22-205(b)(6).
  • If the surviving entity is a foreign entity, its statement designating its registered agent. I.C. § 30-22-205(b)(8).

The Plan of Merger may also be filed instead of a statement of merger. I.C. § 30-22-205(e).

Effect of Merger

When the merger is effective, the surviving entity continues to exist or it comes into existence. I.C. § 30-22-206(a)(1). The merging entities that do not survive cease to exist. I.C. § 30-22-206(a)(2). All the property and debts, obligations, and other liabilities of the merging entity are immediately owned by the surviving entity. I.C. § 30-22-206(a)(3)-(4). 

Any interest holder that did not have any liability before the merger, still has no liability after the merger unless the liability arises after the merger. I.C. § 30-22-206(c). If an interest holder had a liability before the merger, but is no longer an interest after the merger, the following rules apply:

  • The interest holder is not released from the liability. I.C. § 30-22-206(d)(1).
  • The interest holder has no liability that arises after the merger. I.C. § 30-22-206(d)(2).

After a merger, a foreign surviving entity may be served with a lawsuit for collection and enforcement of any debt, obligation, or other liability of the domestic merging entity. I.C. § 30-22-206(e). In addition, the foreign registration of any foreign entity that is merged out is cancelled. I.C. § 30-22-206(f).