Question

The client is the Chairman of the Board of Directors of an KENTUCKY corporation. The Board of Directors has decided to merge the corporation with another KENTUCKY corporation. The client wants to know if shareholder approval is required for the merger. Identify the KENTUCKY statute that governs this question, and what that statute provides concerning shareholder approval.

Answer 1

Answer:

The client is the Chairman of the Board of Directors of a KENTUCKY corporation. The Board of Directors has decided to merge the corporation with another KENTUCKY corporation. For successfully merging of both the KENTUCKY Corporation, approval of the shareholders will be required as per KENTUCKY statute 271B.11-030.

As per KENTUCKY statute 271B.11-030, the board of directors of both the corporations which are going to merge should submit the plan of merger for the approval by its shareholders. The board of directors of both the organisation shall recommend the plan of approval to its shareholders and the shareholders will vote to approve the plan of merger.

However, as per KENTUCKY statute 271B.7-050, corporation shall notify all the shareholders whether they have the right to vote for the approval of merger or not. The notice shall also state the purpose of the meeting of the shareholders and the summery of the plan of merger.