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Merger of three CA corps into DE corp. Agreement of Merger, plus Certificate of Approval method question.

San Francisco, CA |

I am the CEO and only shareholder of two CA corps. I am also the majority shareholder of a DE corporation. I am ceasing operations in CA and merging the two CA corps into DE corp. I filed a Certificate of Merger in DE, and then sent in the Agreement of Merger together with the DE Certificate to CA Secretary of State. They rejected it. They told me to send in an Agreement of Merger and a Certificate of Approval for each CA corporation. They said to use the form of the Agreement of Merger on the CA SOS website. But the Agreement of Merger on CA SOS website says the "surviving corporation" is a CA corporation and the disappearing corporation is also a CA corporation. How am I supposed to do this for a foreign (DE) corp?

Attorney Answers 3

Posted

You got bad advice from some clerk as DE is the surviving entity and DE law controls what gets filed (in Delaware) with essentially a notice/copy to CA telling them the former CA entities are no longer in existence. See CA website info on this issue and you will see why I said you got bad advice as it tells you that the SURVIVING entity (i.e., DELAWARE) papers is what controls here: http://www.sos.ca.gov/business/corp/pdf/mergers/corp-merger.pdf

My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained.

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Posted

I am willing to bet (for a nominal sum) you can find a local attorney to do this for a very low sum of money. Just getting paperwork filed with CA and DE is not a hard thing. A lawyer that handles incorporation matters will know what is going on and endeavor to make sure there are no more hiccups. If you got a ad clerks once (as my colleague suggested) you are probably going to get the same bad clerk (rule of averages.)

Additionally, the legal bill CAN be a tax write off.

Adam Jaffe Law Office of Adam Jay Jaffe 124 Lomas Santa Fe Dr, #204 Solana Beach, CA 92075 (619) 810-7964 www.smallclaimsappeals.com Adam@SmallClaimsAppeals.com This posting is provided for “information purposes” only and should not be relied upon as "legal advice". Nothing transmitted from this posting constitutes the establishment of an attorney-client relationship. Applicability of the legal principles discussed here may differ substantially in individual situations or in different states.

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Posted

I don't believe that you got bad advice from the DE clerk.

I believe that the DE clerk recommended that you *start with* the CA form of Agreement of Merger because DE does not provide such a document on its website. However - as you noted - you need to modify that form so that the DE corporation will be the surviving entity (just create a Word document with the appropriate portions of the form, adjusted as necessary).

Before you go further: Have you consulted with your tax adviser to ensure that mergers are the best way to proceed?

Good luck! Most entrepreneurs would be afraid to do, on their own, what you are intending to do.

This information does not constitute legal advice and does not establish an attorney-client relationship.

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5 comments

John P Corrigan

John P Corrigan

Posted

Dana, issue is with CA (not DE)......he says "....and then sent in the Agreement of Merger together with the DE Certificate to CA Secretary of State. They rejected it...."

Dana Howard Shultz

Dana Howard Shultz

Posted

I see that I became confused as I read the facts. It appears I should have referred to the CA clerk rather than the DE clerk. However, I believe that my comment about how to adapt the form still is correct.

John P Corrigan

John P Corrigan

Posted

no worries.....but DE has the forms you need: See http://corp.delaware.gov/mergers09.shtml

Dana Howard Shultz

Dana Howard Shultz

Posted

DE provides the Certificate of Merger, but not the Agreement of Merger.

John P Corrigan

John P Corrigan

Posted

They do - http://corp.delaware.gov/DE%20Agree09.pdf follows the Certificate on the site.

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