Merger

A merger is a TBOC-authorized transaction in which two or more entities combine, with one entity surviving and the other entity (or entities) merging into the survivor. The surviving entity acquires all rights, title, property, debts, and liabilities of the merging entities by operation of law.

Plan of merger (§ 10.002)

Must specify the names of the merging entities, the surviving entity, the manner of converting equity interests, the surviving entity's certificate of formation, and any other provisions required by the TBOC or the parties' governing documents.

Approval requirements for corporations (§ 21.452)

A merger involving a Texas corporation requires (1) board approval and (2) shareholder approval by the affirmative vote of two-thirds of outstanding voting shares, unless the certificate of formation provides for a lower threshold (which may be as low as a majority).

Class voting (§ 21.457)

Class voting on mergers is governed by § 21.457, subject to the SB 29 waiver authority under § 21.364(d)(1) (eff. May 14, 2025) permitting Texas corporations to waive separate class voting in their certificates of formation. See Class Voting.

Short-form mergers (§ 10.005)

A parent corporation owning 90% or more of a subsidiary may merge the subsidiary into itself without subsidiary-shareholder approval.

Effect of merger (§ 10.008)

On the effective date: (1) the merging entity ceases to exist; (2) the surviving entity continues; (3) all property, rights, debts, and liabilities of the merging entity pass to the surviving entity by operation of law; (4) all proceedings continue against the surviving entity.

Dissenters' rights

Texas corporate shareholders have statutory dissenters' rights in certain mergers under §§ 10.351–10.368, entitling dissenting shareholders to fair value for their shares.