Model Entity Transactions Act Law and Legal Definition
Model Entity Transactions Act (META) was created by the National Conference of Commissioners on Uniform State Law (NCCUSL) in 2005. It was amended in 2007. It provides states with a single set of procedures covering all types of mergers and conversions among different forms of business entities. It allows conversion of one kind of business organization to another or the merger of two or more business organizations into one organization. The act was drafted as a collaborative effort of the National Conference of Commissioners on Uniform State Laws and the American Bar Association.
META governs four kinds of transactions: merger of one entity with another, conversion of an entity to another kind of entity, an interest exchange between two entities so that one of them is controlled by the other without actually merging the two entities and the domestication of an entity originally organized in one state in another state. The articles of META provide the procedures to accomplish each of these transactions. In every transaction, there must be a plan that is approved by the interest holders in the entities. The plan describes the transaction and its effect in detail. Approval of the plan proceeds according to the organic statute and rules that govern the pre-existing entities. If there are no statutes, by the unanimous consent of all interest holders. Once a plan is approved, a statement relevant to the transaction must be filed in the office in a state in which entity statements or charters are normally filed. The filing puts the transaction and the identity of the entity that survives in public records. That entity becomes the entity with the capacity to do business and it has the applicable liability shield from that time onward. The main objective in these procedures is to make sure that no interest is extinguished in the process of any of the transactions under META.
The act is adopted by Kansas and Idaho. District of Columbia adopted it in 2010.