Virginia Code 13.1-722.7:1: Effect of domestication
A. When a domestication of a foreign corporation into a domestic corporation becomes effective:
Terms Used In Virginia Code 13.1-722.7:1
- Appraisal: A determination of property value.
- Articles of incorporation: means all documents constituting, at any particular time, the charter of a corporation. See Virginia Code 13.1-603
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bequest: Property gifted by will.
- Commission: means the State Corporation Commission of Virginia. See Virginia Code 13.1-603
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Devise: To gift property by will.
- domestic corporation: means a corporation authorized by law to issue shares, irrespective of the nature of the business to be transacted, organized under this chapter or existing pursuant to the laws of the Commonwealth on January 1, 1986, or which, by virtue of articles of incorporation, amendment, or merger, has become a domestic corporation of the Commonwealth, even though also being a corporation organized under laws other than the laws of the Commonwealth, or that has become a domestic corporation of the Commonwealth pursuant to Article 12. See Virginia Code 13.1-603
- Domesticated corporation: means the domesticating corporation as it continues in existence after a domestication. See Virginia Code 13.1-722.1:1
- Domesticating corporation: means the domestic corporation that approves a plan of domestication pursuant to § 13. See Virginia Code 13.1-722.1:1
- Domestication: means a transaction pursuant to this article, including domestication of a foreign corporation as a domestic corporation or domestication of a domestic corporation in another jurisdiction, where the other jurisdiction authorizes such a transaction even if by another name. See Virginia Code 13.1-722.1:1
- Foreign corporation: means a corporation authorized by law to issue shares, organized under laws other than the laws of the Commonwealth. See Virginia Code 13.1-603
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Interest: means either or both of the following rights under the organic law governing an unincorporated entity:
1. See Virginia Code 13.1-603
- Interest holder: means a person who holds of record an interest. See Virginia Code 13.1-603
- Interest holder liability: means :
1. See Virginia Code 13.1-603
- 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.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Organic law: means the statute governing the internal affairs of a domestic or foreign corporation or eligible entity. See Virginia Code 13.1-603
- Organic rules: means the public organic record and private organic rules of a domestic or foreign corporation or eligible entity. See Virginia Code 13.1-603
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Virginia Code 13.1-603
- Process: includes subpoenas, the summons and complaint in a civil action, and process in statutory actions. See Virginia Code 1-237
- Service of process: The service of writs or summonses to the appropriate party.
- Shareholder: means a record shareholder. See Virginia Code 13.1-603
- Shares: means the units into which the proprietary interests in a corporation are divided. See Virginia Code 13.1-603
1. All property owned by, and every contract right possessed by, the domesticating corporation are the property and contract rights of the domesticated corporation without transfer, reversion, or impairment;
2. All debts, obligations, and other liabilities of the domesticating corporation are the debts, obligations, and other liabilities of the domesticated corporation;
3. The name of the domesticated corporation may, but need not, be substituted for the name of the domesticating corporation in any pending proceeding;
4. The articles of incorporation and bylaws of the domesticated corporation become effective;
5. The shares of the domesticating corporation are reclassified into shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property in accordance with the terms of the domestication, and the shareholders of the domesticating corporation are entitled only to the rights provided to them by those terms and to any appraisal rights they may have under the organic law of the domesticating corporation;
6. The domesticated corporation is:
a. Incorporated under and subject to the organic law of the domesticated corporation;
b. The same corporation without interruption as the domesticating corporation; and
c. Deemed to have been incorporated on the date the domesticating corporation was originally incorporated; and
7. If the foreign corporation has a certificate of authority to transact business in the Commonwealth, its certificate of authority is deemed withdrawn.
B. When a domestication of a domestic corporation into a foreign jurisdiction becomes effective, the domesticated corporation is deemed to:
1. Appoint the clerk of the Commission as an agent for service of process in any proceeding (i) to enforce the rights of shareholders who exercise appraisal rights in connection with the domestication or (ii) based on a cause of action against the domesticating domestic corporation arising during the time it was in existence under the laws of the Commonwealth, which service of process shall be made on the clerk in accordance with § 12.1-19.1; and
2. Agree that it will promptly pay the amount, if any, to which such shareholders are entitled under Article 15 (§ 13.1-729 et seq.).
C. Except as otherwise provided in the organic law or organic rules of a domesticating foreign corporation, the interest holder liability of a shareholder in a foreign corporation that is domesticated into the Commonwealth who had interest holder liability in respect of such domesticating corporation before the domestication becomes effective shall be as follows:
1. The domestication does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the domestication becomes effective.
2. The provisions of the organic law of the domesticating corporation shall continue to apply to the collection or discharge of any interest holder liabilities preserved by subdivision 1, as if the domestication had not occurred.
3. The shareholder shall have such rights of contribution from other persons as are provided by the organic law of the domesticating corporation with respect to any interest holder liabilities preserved by subdivision 1, as if the domestication had not occurred.
4. The shareholder shall not, by reason of such prior interest holder liability, have interest holder liability with respect to any interest holder liabilities preserved that arise after the domestication becomes effective.
D. A shareholder who becomes subject to interest holder liability in respect of the domesticated corporation as a result of the domestication shall have such interest holder liability only in respect of interest holder liabilities that arise after the domestication becomes effective.
E. A domestication does not constitute or cause the dissolution of the domesticating corporation.
F. Property held for charitable purposes under the laws of the Commonwealth by a domestic or foreign corporation immediately before a domestication shall not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred except and to the extent permitted by or pursuant to the laws of the Commonwealth addressing cy pres or dealing with nondiversion of charitable assets.
G. A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance which is made to the domesticating corporation and which takes effect or remains payable after the domestication inures to the domesticated corporation.
H. A trust obligation that would govern property if transferred to the domesticating corporation applies to property that is transferred to the domesticated corporation after the domestication takes effect.