c. Effects

Effectivity of Merger or Consolidation

A merger does not become effective upon the mere agreement of the constituent corporations, but upon the SEC’s issuance of the certificate of merger approving the articles of merger as required by Section 78 of the Revised Corporation Code (RA 11232)¹ (Bank of Commerce v. Heirs of Dela Cruz, G.R. No. 211519, 14 August 2017)².

Effects of Merger or Consolidation

• Constituent corporations become a single corporation
• Merger: surviving corporation
• Consolidation: consolidated corporation under the plan of consolidation
• Separate existence of constituent corporations cease EXCEPT that of the surviving or consolidated corporation
• Surviving or consolidated corporation possesses the rights privileges immunities; and powers and is subject to all duties and liabilities of a corporation organized under this Code
• ALL of the following are deemed transferred to and vested in such surviving or consolidated corporation: (BY OPERATION OF LAW)
• Rights
• Privileges
• Immunities
• Franchises of each constituent corporation
• Real or personal property
• Receivables due on whatever account (hence surviving / consolidated corporation has the power to file an action for recovery) including:
• subscriptions to shares and other choses in action
• and every other interest of, belonging to, or due to each constituent corporation
• Regarding liabilities and pending claims:
• Liabilities and obligations of each constituent corporation:
• Surviving or consolidated corporation shall be responsible
• Pending claim, action or proceeding brought by or against any constituent corporation
• may be prosecuted by or against the surviving or consolidated corporation
• The rights of creditors or liens upon the property of such constituent corporations are not impaired

Transfer of assets and assumption of liabilities