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HomeCorporations CodeCh. 1§ 2511 Corporate Reorganization Definitions

§ 2511 Corporate Reorganization Definitions

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 2511 Corporate Reorganization Definitions

This law tells you what counts as a “reorganization” for certain corporations – it can be a merger, an exchange of stock, or a sale of assets.

Key Takeaways

  • •A “reorganization” can be one of three things: a merger, an exchange, or a sale of assets.
  • •A merger reorganization is any merger under Chapter 11 or Chapter 8, but it can’t be a short‑form merger.
  • •An exchange reorganization happens when one corporation trades its stock for another’s stock and ends up controlling the other company.
  • •A sale‑of‑assets reorganization is when a corporation buys almost all of another’s assets and pays with its own stock or long‑term debt.

Example

Company X (a domestic social purpose corporation) buys most of Company Y’s assets and pays for them with its own stock.

Because Company X is getting almost all of Company Y’s assets and is paying with its own equity, this is a “sale‑of‑assets reorganization” under the law.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 2511 Corporate Reorganization Definitions

“Reorganization” means a merger reorganization, an exchange reorganization, or a sale of assets reorganization. (a) “Merger reorganization” means a merger pursuant to Chapter 11 (commencing with Section 1100) of Division 1 and Chapter 8 (commencing with Section 3200), of this division, other than a short-form merger. (b) “Exchange reorganization” means the acquisition by one domestic social purpose corporation, foreign social purpose corporation, or other business entity in exchange, in whole or in part, for its equity securities, or the equity securities of a domestic social purpose corporation, a foreign social purpose corporation, or an other business entity that is in control of the acquiring entity, of equity securities of another domestic social purpose corporation, foreign social purpose corporation, or other business entity if, immediately after the acquisition, the acquiring entity has control of the other entity. (c) “Sale-of-assets reorganization” means the acquisition by one domestic social purpose corporation, foreign social purpose corporation, or other business entity in exchange in whole or in part for its equity securities, or the equity securities of a domestic social purpose corporation, a foreign social purpose corporation, or an other business entity that is in control of the acquiring entity, or for its debt securities, or debt securities of a domestic social purpose corporation, foreign social purpose corporation, or other business entity that is in control of the acquiring entity, that are not adequately secured and that have a maturity date in excess of five years after the consummation of the reorganization, or both, of all or substantially all of the assets of another domestic social purpose corporation, foreign social purpose corporation, or other business entity. (Amended by Stats. 2014, Ch. 694, Sec. 28. (SB 1301) Effective January 1, 2015.)

Last verified: January 10, 2026

Key Terms

reorganizationmerger reorganizationexchange reorganizationsale-of-assets reorganization

Related Statutes

  • § 181 Corporate Reorganization Definitions
  • § 14603 Benefit Corporation Conversion Rules
  • § 183.5 Corporate Share Exchange Offers
  • § 2512 Social Purpose Corporation Share Exchange
  • § 101 Statutory Construction Rules

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 2511.
View Official Source