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2
Petition for bankruptcy process etc.
Merger and consolidation are different paths taken by companies for economic
reasons, whether for economic growth (e.g. cutting competition) or to cut costs.
MERGER
CONSOLIDATION
The same provision2 of law provides that corporations may consolidate into a new
single corporation which shall be the consolidated corporation.
1
Aquino, The Philippine Corporate Law Compendium, 2014 Edition
2
Section 76, Corporation Code
3
Aquino, The Philippine Corporate Law Compendium, 2014 Edition
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b. The terms of the merger or consolidation and the mode of carrying
the same into effect;
To start the process, a plan of merger or consolidation which contains the names
of the corporation, the terms of the merger or consolidation and the mode of carrying it out,
a statement of changes in the articles of incorporation and other pertinent provisions must
be approved by the board of directors or trustees of each corporation.
Sec. 77. of the Corporation Code requires first the approval by majority vote of
each of the board of directors or trustees of the constituent corporations of the plan of
merger or consolidation.
After the approval of the plan of merger or consolidation by both the board of
directors and trustees and the approval of the stockholders/members (at least two-thirds
(2/3) of the outstanding capital stock of each corporation in the case of stock corporations
or at least two-thirds (2/3) of the members in the case of non-stock corporations), the
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articles of merger or consolidation shall be made. The articles of merger or consolidation
must be signed by the president/vice-president, and must be certified by the secretary or
assistant secretary of each corporation. The articles of merger or consolidation shall
contain: the plan of merger or consolidation, if non-stock, the number of shares outstanding
and if non-stock, the number of members. Lastly, it shall contain the number of shares
voting for or against the plan in each corporation.
4. EFFECTIVITY
The mere agreement of the corporations to merge or consolidate DOES NOT give
effect to the merger or consolidation. The approval of the SEC, by its issuance of a
certificate of merger or consolidation, makes effective the merger/consolidation of the
corporations.
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be the consolidated corporation designated in the plan of
consolidation;
2. The separate existence of the constituent corporations shall
cease, except that of the surviving or the consolidated corporation;
3. The surviving or the consolidated corporation shall possess
all the rights, privileges, immunities and powers and shall be
subject to all the duties and liabilities of a corporation
organized under this Code;
4. The surviving or the consolidated corporation shall thereupon and
thereafter possess all the rights, privileges, immunities and franchises
of each of the constituent corporations; and all property, real or
personal, and all receivables due on whatever account, including
subscriptions to shares and other choses in action, and all and every
other interest of, or belonging to, or due to each constituent
corporation, shall be deemed transferred to and vested in such
surviving or consolidated corporation without further act or deed; and
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