Q: What is the difference between a merger and a consolidation?
A: In a merger, two or more corporations combine into a single corporation and the resulting entity is one of the constituent corporations (corporation A merges into corporation B, with corporation B as the surviving corporation). In a consolidation, two or more corporations combine into a single corporation and the resulting entity is a new corporation (corporation A and corporation B combine into new corporation C).
Q: If the constituent corporations are located in different counties, where is the court application filed?
A: The merger application is filed in the county where the surviving or consolidated corporation is located, or in the county where the principal office of one of the New York constituent corporations is located.
Q: Which corporation makes the court application?
A: The court application is made jointly by all of the constituent corporations in the form of a petition and/or joint affidavit.
Q: Can corporations merge if they have completely unrelated purposes and activities?
A: Generally, the purposes and activities of the merging corporations should be similar and compatible.
Q: Does N-PCL Article 9 cover mergers of churches and other corporations incorporated under the Religious Corporations Law?
A: If all of the constituent corporations are incorporated under the Religious Corporations Law, the merger is governed solely by the Religious Corporations Law. Court approval is required but the Attorney General is not a party to the merger. However, if one of the churches incorporated under the N-PCL or the Membership Corporations Law, then N-PCL Article 9 is applicable to the merger.
Q: Can a not-for-profit corporation merge with a business corporation?
A: Only under limited circumstances. A not-for-profit corporation may merge or consolidate into a business corporation, but only if the not-for-profit corporation is a Type A or Type C corporation.
Q: Do Type A corporations require court approval for mergers?
A: No, but the mergers of Type A trade associations require approval from the Attorney General’s Antitrust Bureau.