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Consolidation


Guest DLS

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Our organization is considering a consolidation with another. The rules are clear that a merger (one organization disappears into another) is treated as amendment to the by-laws. I believe that consolidation would also be treated as an amendment because the organization, as constituted, would effectively be dissolved. Am I right?

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On a quick skim of RONR Sec. 55, p. 544, I think so.

But read that section for yourself to be sure what you want to do fits into the options (merger, consolidation) described therein.

Thanks. That is the key section. It is clear about merger, but less so about consolidation. However, I think the logic that applies to merger and dissolution (that you are effectively amending the by-laws) also applies to consolidation.

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I think the critical thing is that in a consolidation, BOTH organizations go out of business -- by rescinding their bylaws, which is an "amendment" -- then the people get together to adopt a new set of bylaws for the continuing association.

In a merger only one association rescinds their bylaws -- the other just continues along, although with a new bunch of members, presumably, and perhaps some detail amendments to its bylaws to accommodate all those new members and whatever assets and liabilities they may bring with them.

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I think the critical thing is that in a consolidation, BOTH organizations go out of business -- by rescinding their bylaws, which is an "amendment" -- then the people get together to adopt a new set of bylaws for the continuing association.

In a merger only one association rescinds their bylaws -- the other just continues along, although with a new bunch of members, presumably, and perhaps some detail amendments to its bylaws to accommodate all those new members and whatever assets and liabilities they may bring with them.

Yes. That is the difference between them. My issue is whether a vote to consolidate will require 2/3 because it is an amendment, or just a majority.

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