When a new corporation is formed to acquire two or more other corporations through an exchange of voting stock; the acquired corporations then cease to exist as separate legal entities, it's a Statutory Merger.
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- In a merger of consolidation, or transfer to a controlled corporation, loss is deductible. Group of answer choices True FalseIf a corporation merges, what company's articles of incorporation and bylaws will be used?What will be the liability of the corporation as to themselves and to third person in case of merger and consolidation.
- When one company buys the assets and liabilities of another company, this is known as which of the following?Choose one answer.a. Limited liability company b. Merger c. Conventional corporation d. AcquisitionWhich of the following is NOT true with regard to the statutory consolidation form of business combination? a. The combining entities both cease to exist after the combination. b. A new corporation must be formed. c. Control of the net assets of the combining entities must be acquired by the new entity. d. The net assets of the combining entities must be acquired with assets of the new corporation.What amount of gain or loss does Ernesto recognize if the transaction is structured as a Type A merger?
- Choose the correct. What is a statutory merger?a. A merger approved by the Securities and Exchange Commission.b. An acquisition involving the purchase of both stock and assets.c. A takeover completed within one year of the initial tender offer.d. A business combination in which only one company continues to exist as a legal entity.What is a statutory merger?a. A merger approved by the Securities and Exchange Commission.b. An acquisition involving the purchase of both stock and assets.c. A takeover completed within one year of the initial tender offer.d. A business combination in which only one company continues to exist as a legal entity.The combination of two or more companies to form a completely new corporation is a Select one: a. holding company. b. merger. c. congeneric formation. d. consolidation.
- Which one of the following statements correctly applies to a merger? Multiple Choice The acquiring firm does not have to seek approval for the merger from its shareholders. The shareholders of the target firm must approve the merger. The acquiring firm will acquire the assets but not the debt of the target firm. The merged firm will have a new company name. The titles to individual assets of the target firm must be transferred into the acquiring firm's name.Which of the following situations best describes a business combination to be accounted for as a statutory merger? Select one: a. Two companies combine to form a new third company, and the original two companies are dissolved. b. One company transfers assets to another company it has created c. Both companies in a combination continue to operate as separate, but related, legal entities. d. Only one of the combining companies survives and the other loses its separate identityTRUE OR FALSE 1. The merger of two completely unrelated enterprises is referred to as a congeneric merger, however, the merger of somewhat related companies is referred to as a conglomerate merger of somewhat related companies is referred to as conglomerate merger. 2. if there is sufficient proof that the acquisition has been made for a business purpose and the shareholders of the target firm will be compensated with voting shareholders of the target firm will be compensated with voting shares in the acquiring firm, the acquisition will be non-taxable. 3. with cash consideration, the stockholders of the target firm share the gains and losses of acquisition and vice-versa. 4. A merger is the total absorption of one firm by another, however with a consolidation an entirely new firm is created. 5. A white knight is a friendly suitor that a target firm turns to as an alternative to a hostile bidder.