Minnesota Session Laws - 1986, Regular Session

  

                         Laws of Minnesota 1986 

                        CHAPTER 338-S.F.No. 2094 
           An act relating to nonprofit corporations; providing 
          for succession of fiduciary capacity in mergers and 
          consolidations; clarifying authority for separate 
          entities to hold church employee benefit plans; 
          amending Minnesota Statutes 1984, sections 317.38; and 
          317.66, subdivision 1, and by adding a subdivision. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 317.38, is 
amended to read: 
    317.38 [CONSEQUENCES.] 
    The consequences of merger or consolidation are: 
    (1) The several constituent corporations become a single 
corporation which (a) in case of merger is a surviving 
corporation, or (b) in case of consolidation is a new 
corporation.  
    (2) Excepting the surviving corporation and subject to 
clause (3) and to section 317.40, the separate existence of each 
constituent corporation ceases.  
    (3) When the agreement of merger or consolidation expressly 
provides for the continuance of the corporate existence of a 
constituent corporation and expressly declares the purpose for 
the continuance, the corporate existence of such constituent 
corporation continues in the single corporation for the purpose 
declared in the agreement.  
    (4) The single corporation has all the rights, privileges, 
immunities, powers, and franchises, and is subject to all of the 
duties and liabilities, of a corporation formed under this 
chapter.  
    (5) The single corporation has all the rights, privileges, 
immunities, powers, and franchises, public and private, of each 
constituent corporation.  
    (6) All property, real, personal, or mixed, all debts, 
including debts arising from a subscription for membership, and 
all interests belonging to each constituent corporation are 
transferred to the single corporation without further act or 
deed.  
    (7) Interest in any real estate possessed by a constituent 
corporation does not revert to the grantor, or otherwise, nor is 
it in any way impaired by reason of the merger or consolidation; 
and the personal property of a constituent corporation does not 
escheat by reason of the merger or consolidation.  
    (8) Except where the will or other instrument provides 
otherwise, and subject to clause (9) (10), a devise, bequest, 
gift, or grant contained in any will or other instrument, in 
trust or otherwise, made before or after the merger or 
consolidation has become effective, to or for any of the 
constituent corporations, inures to the single corporation.  
    (9) (a) Except where the will, declaration of trust, or 
other instrument provides otherwise, the single corporation is, 
without further act or deed, the successor of the constituent 
corporations in any and all fiduciary capacities in which a 
constituent corporation was acting at the time of the merger or 
consolidation and is liable to all beneficiaries as fully as if 
the constituent corporation had continued its separate corporate 
existence.  
    (b) If a constituent corporation is nominated and 
appointed, or has been nominated and appointed, in any fiduciary 
capacity in any will, declaration of trust, or any other 
instrument, order, or judgment of any court before or after the 
merger or consolidation, then even if the will or other 
instrument, order, or judgment does not become operative or 
effective until after the merger or consolidation becomes 
effective, every such fiduciary capacity and all of the rights, 
powers, privileges, duties, discretions, and responsibilities so 
provided to devolve upon, vest in, or inure to the corporation 
so nominated or appointed, shall fully and in every respect 
devolve upon, vest in, inure to, and are to be exercised by, the 
single corporation, whether there be one or more successive 
mergers or consolidations.  
    (c) For purposes of this section, the term "fiduciary 
capacity" means the capacities of trustee, executor, 
administrator, personal representative, guardian of estates, 
conservator, receiver, escrow agent, agent for the investment of 
money, attorney-in-fact, or any other similar capacity. 
    (10) Except as provided in section 501.12, property, 
assets, or income derived therefrom, possessed or received by a 
constituent corporation, or subsequently received by the single 
corporation after the merger or consolidation, shall not be 
diverted from the uses and purposes for which such property, 
assets, or income have been received and held, or from the uses 
and purposes expressed or intended by the original donor.  
    (10) (11) All debts, liabilities, and obligations of each 
constituent corporation become the debts, liabilities, and 
obligations of the single corporation, just as if such debts, 
liabilities, and obligations had been incurred or contracted by 
the single corporation.  
    (11) (12) Any existing claims or pending action or 
proceeding by or against a constituent corporation may be 
prosecuted to judgment as though the merger or consolidation had 
not been effected, or the single corporation may be substituted 
for the constituent corporation.  
    (12) (13) The liabilities of the members, officers, 
directors, or similar groups or persons, however denominated, of 
a constituent corporation are not affected by the merger or 
consolidation of any constituent corporation.  
    (13) (14) The rights of creditors or any liens upon the 
property of a constituent corporation are not impaired by the 
merger or consolidation, but the liens are limited to the 
property upon which they were liens immediately prior to the 
merger or consolidation.  
     Sec. 2.  Minnesota Statutes 1984, section 317.66, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BENEFITS FOR MEMBERS.] When duly 
authorized by its members or otherwise, a corporation formed for 
a religious purpose, may provide directly or through a church 
benefits board for: 
    (1) support and payment of benefits to its ministers, 
teachers, employees, or functionaries and to the ministers, 
teachers, employees, or functionaries of a nonprofit body 
affiliated with it or under its jurisdiction; 
    (2) payment of benefits to the widows, children, 
dependents, or other beneficiaries of the persons named in 
clause (1); 
    (3) collection of contributions and other payments; and, 
    (4) creation, maintenance, investment, management, and 
disbursement of necessary endowment, reserve, and other funds 
for these purposes, including any trust fund or corporation 
which funds a "church plan" as defined in section 414(e) of the 
Internal Revenue Code of 1954, as amended through December 31, 
1985.  
     Sec. 3.  Minnesota Statutes 1984, section 317.66, is 
amended by adding a subdivision to read: 
     Subd. 5.  [CHURCH BENEFITS BOARD.] A "church benefits board"
is an organization described in section 414(e)(3)(A) of the 
Internal Revenue Code of 1954, as amended through December 31, 
1985, whether a civil law corporation or otherwise, the 
principal purpose or function of which is the administration or 
funding of a plan or program for the provision of retirement 
benefits or welfare benefits, or both, for the employees of a 
church or a convention or association of churches, if the 
organization is controlled by or associated with a church or a 
convention or association of churches. 
     Sec. 4.  [EFFECTIVE DATE.] 
     Sections 1 to 3 are effective the day after final enactment.
    Approved March 19, 1986