§ 1112 Nonprofit Merger Shareholder Approval

• •All outstanding shares of the disappearing corporation must approve the merger.
• •Shareholder voting limits or restrictions do not matter.
• •The rule only applies when the surviving entity is a nonprofit public benefit, mutual benefit, or religious corporation.

A nonprofit hospital that is merging with a disappearing corporation chooses a nonprofit health organization as the surviving entity.

Because the surviving organization is a nonprofit, all shareholders of the disappearing corporation must vote to approve the merger, even if the disappearing corporation's bylaws only allow a minority of shares to vote.