- Unincorporated Non-profit Associations Act 2008
- UNIFORM UNINCORPORATED NONPROFIT ASSOCIATIONS ACT
- DEFINITIONS AND INTERPRETATION
- APPLICATION OF THIS ACT AND OTHER LAWS
- LEGAL STATUS, CAPACITY AND POWERS
- CLAIMS AND LIABILITIES
- DISSOLUTION AND WINDING-UP
- COMING INTO FORCE
- All Pages
Capacity to merge
24(1) A nonprofit association and one or more other organizations (each of which is referred to in this section as a “participating organization”) may merge and continue as one organization (referred to in this section as the “merged organization”) in accordance with a plan of merger and this section.
Plan of merger
24 (2) A plan of merger must include
(a) the name and form of each participating organization;
(b) the name and form of the merged organization and its proposed governing principles or similar rules;
(c) the terms of the proposed merger, including
- (i) terms that address the manner in which the interests of owners and members of the participating organizations in those organizations are to be disposed of or converted into interests in the merged organization,
- (ii) terms that address the effect of the proposed merger on the liability of a member, owner or manager of a participating organization, or any similar person in relation to a participating organization, for any liability of the participating organization,
- (iii) terms that provide for the vesting of property of each participating organization in the merged organization, and the disposition of any such property that is not to vest in the merged organization,
- (iv) terms that specify the extent to which the rights, privileges, immunities, powers, and purposes of each participating organization lapse or continue as rights, privileges, immunities, powers and purposes of the merged organization, and
- (v) terms that continue the liabilities of the participating organizations as liabilities of the merged organization, or ensure that any liability not so continued, including any liability to a person who does not consent to the merger, will be satisfied or adequately provided for;
(d) a description of persons who may adversely affected by the merger, the nature of their interest in the outcome, and the measures, if any, to be taken to protect their interest; and
(e) the proposed effective date of the merger.
24 (3) A merger under this section takes effect only if
(a) the merger complies with the governing law of each participating organization, and has been approved by each participating organization in accordance with its governing law; and
(b) the terms of the merger are approved, upon a joint application by the participating organizations, by [the superior court of plenary jurisdiction in the enacting jurisdiction].
Powers of court
24 (4) The court, in response to an application for its approval of the terms of a proposed merger, may
(a) make any interim order it thinks fit, including any order determining notice to be given to any person, or dispensing with notice to any person; and
(b) dismiss the application, or approve the terms of the merger as proposed or with any amendments or additional terms or conditions the court considers necessary to protect any material interest in a participating organization.
Effect of merger
24 (5) Subject to any terms or conditions of the court order approving a merger,
(a) on the effective date of the merger,
(i) the participating organizations are continued as the merged organization, and cease to exist as separate organizations, and
(ii) the merger takes effect in accordance with the terms of merger approved by the court;
(b) any property that was held under a trust or condition by a participating organization and vests in the merged organization, continues to be held by the merged organization under the same trust or condition; and
(c) if a bequest or other gift made to a participating organization takes effect or remains payable after the merger, it enures to the benefit of, and may be transferred or paid to, the merged organization, subject to any condition or trust obligation that would have applied to the participating organization if the merger had not occurred.
Comment: This section authorizes a UNA to merge with another UNA or with another organization. The bulk of the section is concerned with setting out the procedure for such a merger. The starting place for any merger is the plan of merger, which is an agreement between the parties. Subsection (2) sets out in detail the requirements for a plan of merger. Subsection (3) describes the approvals that are required for a merger to be effect. For a UNA, a merger must be authorized by a majority vote of the UNA’s members, unless the UNA’s governing principles require a different authorization. See section 15 (1) (c) (ii). A merger must also be authorized by the Superior Court of an enacting jurisdiction. Subsection (5) sets out the legal effects of a merger.
In order for another type of organization to merge with a UNA, it will need to be authorized under its governing legislation. In all likelihood, enacting jurisdictions will have to consider amending the governing legislation for various types of organizations to give this section its full effect.
Derivation: Principle (40).