Section 244 - Short form merger

(1) A company and one or more other companies that are directly or indirectly wholly owned by the company may merge and continue as one company without complying with section 259 or 261 where

(a) the merger is approved by a resolution of the directors of each of the merging companies; and

(b) each resolution provides that the

(i) shares of each merging company, other than the transferee company, shall be cancelled without payment or other consideration;

(ii) constitution of the transferee company, shall be the same as the constitution of the transferor company; and

(iii) directors of each of the merging companies are satisfied on reasonable grounds that the transferee company shall be solvent, immediately after the merger becomes effective.

(2) Two or more companies, each of which is directly or indirectly wholly owned by the same company, may merge and continue as one company without complying with section 259 or 261 where

(a) the merger is approved by a resolution of the directors of each of the merging companies; and

(b) each resolution provides that

(i) the shares of all but one of the merging companies shall be cancelled without payment or other consideration;

(ii) the constitution of the transferee company, shall be the same as the constitution of the merging company whose shares are not cancelled; and

(iii) the directors are satisfied on reasonable grounds that the transferee company shall, immediately after the merger becomes effective, satisfy the solvency test.

(3) The directors of each of the merging companies shall, not less than twenty-eight days before the merger is proposed to take effect, give written notice of the proposed merger to every secured creditor of the company.

(4) The resolutions approving a merger under this section, taken together, shall be deemed to constitute a merger proposal that has been approved.

(5) The directors who vote in favour of a resolution under subsection (1) or (2), as the case may be, shall sign a certificate stating

(a) that, in their opinion, the conditions set out in subsection (1) or (2) are satisfied; and

(b) the grounds for the opinion of the directors.

(6) A director who fails to comply with subsection (5) is liable to pay to the Registrar an administrative penalty of three hundred and fifty penalty units.