A certificate of merger is required to be filed in accordance with the provisions of chapter 10 of the BOC when any party to the merger is a domestic filing entity or when any entity created pursuant to a plan of merger is a domestic filing entity.
The BOC provides more flexible merger provisions than those that were found in the Texas Non-Profit Corporation Act. Under prior law, a nonprofit corporation could merge only with and into other nonprofit corporations. Additionally, prior law permitted only one of the parties to the merger to survive the transaction. Section 1.002(55) of the BOC defines a merger as:
the division of a domestic entity into two or more new domestic entities or other organizations or into a surviving domestic entity and one or more new domestic or foreign entities or non-code organizations; or
the combination of one or more domestic entities with one or more domestic entities or non-code organizations resulting in:
one or more surviving domestic entities or non-code organizations;
the creation of one or more new domestic entities or non-code organizations; or
one or more surviving domestic entities or non-code organizations and the creation of one or more new domestic entities or non-code organizations.
Although the BOC has more flexible and permissive merger provisions for nonprofit corporations, certain restrictions and limitations still apply. These restrictions are found in section 10.010 and are set forth below:
A nonprofit corporation may not merge into another entity if, the nonprofit corporation would, because of the merger, lose or impair its charitable status.
One or more domestic or foreign for-profit entities or non-code organizations may merge into one or more domestic nonprofit corporations if the nonprofit corporations continue as the surviving entity or entities.
A nonprofit corporation may merge with a foreign for-profit entity, but only if the domestic nonprofit corporation continues as the surviving entity.
One or more nonprofit corporations and non-code organizations may merge into one or more foreign nonprofit entities that continue as the surviving entity or entities.
The fee for filing a merger transaction where the only parties to the merger are nonprofit corporations or cooperative associations is $50. The fee for filing a merger transaction of a nonprofit corporation and a for-profit entity is $300.
The provisions of chapter 10 of the BOC do not apply to an unincorporated nonprofit association. Consequently, an unincorporated nonprofit association has no authority to engage in a merger with a nonprofit corporation.