Share Exchange Law and Legal Definition
Share exchange is a statutory form of business combination in which some or all of the shares of one corporation are exchanged for some or all of the shares of another corporation. However, neither of the corporations ceases to exist.
The following is the definition given by one state statute of share exchange:
(1) A corporation may acquire all of the outstanding shares of one or more classes or series of another corporation if the board of directors of each corporation adopts and its shareholders (if required by s. 607.1103) approve a plan of share exchange.
(2) The plan of share exchange shall set forth:
(a) The name of the corporation the shares of which will be acquired and the name of the acquiring corporation;
(b) The terms and conditions of the exchange;
(c) The manner and basis of exchanging the shares to be acquired for shares, obligations, or other securities of the acquiring or any other corporation or, in whole or in part, for cash or other property, and the manner and basis of exchanging rights to acquire shares of the corporation to be acquired for rights to acquire shares, obligations, or, in whole or in part, other securities of the acquiring or any other corporation or, in whole or in part, for cash or other property.
(3) The plan of share exchange may set forth other provisions relating to the exchange.
(4) This section does not limit the power of a corporation to acquire all or part of the shares of one or more classes or series of another corporation through a voluntary exchange or otherwise. [Fla. Stat. § 607.1102]