Arizona Laws 29-2303. Approval of interest exchange
A. A plan of interest exchange is not effective unless it has been approved both:
Terms Used In Arizona Laws 29-2303
- Acquired entity: means an entity in which all of one or more classes or series of interests are acquired in an interest exchange. See Arizona Laws 29-2102
- Acquiring entity: means the entity that acquires all of one or more classes or series of interests of the acquired entity in an interest exchange. See Arizona Laws 29-2102
- Approve: means , in the case of an entity, that its governors and interest holders take whatever steps are necessary under its organizational documents, governing statute and other law to do all of the following:
(a) Propose a transaction subject to this chapter. See Arizona Laws 29-2102
- Entity: means any of the following:
(a) A corporation. See Arizona Laws 29-2102
- Foreign entity: means an entity other than a domestic entity. See Arizona Laws 29-2102
- Governing statute: means , collectively, the statute or statutes governing the internal affairs of an entity. See Arizona Laws 29-2102
- Interest: means a governance interest or a transferable interest, including a share or membership in a corporation. See Arizona Laws 29-2102
- Interest exchange: means a transaction authorized by article 3 of this chapter. See Arizona Laws 29-2102
- Interest holder: means a direct holder of an interest. See Arizona Laws 29-2102
- Interest holder liability: means :
(a) Personal liability for an obligation of an entity that is imposed on a person either:
(i) Solely by reason of the status of the person as an interest holder. See Arizona Laws 29-2102
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Merger: means a transaction authorized by article 2 of this chapter. See Arizona Laws 29-2102
- Organizational documents: means the public organizational document and private organizational documents of an entity. See Arizona Laws 29-2102
- Plan: means a plan of merger, interest exchange, conversion, domestication or division. See Arizona Laws 29-2102
- Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. See Arizona Laws 29-2102
- Statute: A law passed by a legislature.
1. By a domestic acquired entity:
(a) In accordance with the requirements, if any, in its governing statute and organizational documents for approval of an interest exchange.
(b) Except as otherwise provided in subsection D of this section, if neither its governing statute nor its organizational documents provide for approval of an interest exchange, in accordance with the requirements, if any, in its governing statute or organizational documents for approval of a merger, as if the interest exchange were a merger.
(c) If neither its governing statute nor its organizational documents provide for approval of an interest exchange or a merger, by all of the interest holders of the entity entitled to vote on or consent to any matter or, if there are no such interest holders, then by all of the governors of the entity.
2. In a record by each interest holder of a domestic acquired entity that will have interest holder liability for obligations that arise after the interest exchange becomes effective, unless both:
(a) The organizational documents of the entity expressly provide in a record 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 of the interest holders.
(b) The interest holder voted for or consented in a record to that provision of the organizational documents or became an interest holder after the adoption of that provision.
B. An interest exchange involving a foreign acquired entity is not effective unless it is approved by the foreign entity in accordance with the law of the foreign entity’s jurisdiction of organization.
C. Except as otherwise provided in its governing statute or organizational documents, the interest holders of the acquiring entity are not required to approve the interest exchange.
D. A provision of the governing statute of a domestic acquired entity that would permit a merger between the acquired entity and the acquiring entity to be approved without the vote or consent of the interest holders of the acquired entity because of the percentage of interests in the acquired entity held by the acquiring entity does not apply to approval of an interest exchange under subsection A, paragraph 1, subdivision (b) of this section.