March 16, 2016

How Many Signatures Are Required for a Merger Agreement?

Here’s a blog by Keith Bishop of Allen Matkins:

Corporations Code Section 313 generally provides that a contract, note or other instrument will not be invalidated as to a corporation by any lack of authority if it is signed by the corporation’s chairman of the board, the president or any vice president and the secretary, any assistant secretary, the chief financial officer or any assistant treasurer. See If You’re Relying On The Signature Of Two Officers, You May Want To Think Again. It is important to note that Section 313 is a validating statute. Thus, the statute does not invalidate contracts that are not signed by the specified pairing of officers.

The California General Corporation Law does, however, require that one type of agreement be signed by a specific brace of officers. Section 1102 specifically requires that each corporation sign an agreement of merger by both the corporation’s: (i) chairman of the board, president or a vice president; and (ii) secretary or assistant secretary.

This may be a statute that you want to keep in mind if giving a legal opinion that an agreement of merger has been “duly executed”. Oddly, neither Section 313 nor Section 1102 are mentioned in the 2005 Report of The Corporations Committee of the Business Law Section of the State Bar of California on Legal Opinions in Business Transactions.