Merger A merger is a combination of two or more entities by which, most commonly, only one entity survives and succeeds to all the assets and liabilities of the constituent entities that do not survive the merger. Mergers cannot occur without complying with the statutory procedures under Nevada law. A plan of merger must meet statutory requirements. The plan must be prepared and approved by the owners of the enterprise.10 In the case of a corporation, the board of directors must first adopt the plan, then recommend the plan to the stockholders and submit the plan for approval by the stockholders.11 The plan may be made dependent on extrinsic facts and amended, abandoned, terminated, or cancelled as provided in the statutes.12 Articles of merger must be filed with the Nevada Secretary of State.13 A merger is effective at the time of filing or upon a later date and time specified in the articles, which date must not be more than 90 days after the date the articles are filed.14Nevada, along with other jurisdictions, has recognized the de facto merger doctrine to protect creditors and stockholders when the reorganization of a corporation has the effect of a merger without having been effected in compliance with procedural formalities required for mergers. The application of this doctrine commonly arises in asset sales when income-producing assets are sold to another person and the liabilities are retained by the selling enterprise without the resources to transact business or pay for such liabilities. When considering whether to apply the doctrine, a Nevada court will consider whether there is a mere continuation of the enterprise, whether there is a continuity of stockholders, whether the seller corporation ceased its ordinary business operations, and whether the acquiring corporation assumed the seller’s obligations.15
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