What is required for a merger to be valid according to procedural steps for fundamental corporate changes?

For a merger to be valid, a majority of shares entitled to vote must approve the transaction. This requirement ensures that the decision to merge reflects the interests of the shareholders, rather than being dictated by a small group or individual shareholders. The majority approval standard helps to protect minority shareholders and promotes democratic governance within the corporation.

In practice, corporate law often stipulates that for significant changes such as mergers, a vote is required to validate the actions taken by the board of directors. This involves notifying shareholders of the proposed merger and allowing a vote where those holding a majority of the voting power can express their approval or disapproval.

While some circumstances, such as mergers involving wholly-owned subsidiaries, might have different requirements or streamlined processes, the general rule for a merger involving two companies is to secure a majority of the votes from the shareholders entitled to vote.

Other options, such as unanimous approval or board-only approval, could create significant hurdles or injustices in the merger process, where a small dissenting group could block a beneficial merger for the company at large. Meanwhile, the idea that no approval is needed if one subsidiary owns the other oversimplifies the complexities involved in corporate governance and transactional approval requirements.