Details of Patterns of Reorganization
• "A" Reorganization
• "B" Reorganization
• "C" Reorganization
• "D" Reorganization
• "E" Reorganization
• "F" Reorganization
• "G" Reorganization
Type "A" Reorganization consists of
Both involve the acquisition of one company's assets by another.
• Target transfers its assets and liabilities to Acquiring in exchange for part of
Acquiring Corporation's stock.
• Target exchanges the Acquiring stock received for all of its shareholders' Target
stock, and Target dissolves.
• After the reorganization, Target Corporation no longer exists and Target shareholders
are now shareholders of Acquiring Corporation.
• T1 and T2 transfer their assets to C in exchange for C's stock.
• T1 and T2 exchange the C stock received for the T1 and T2 stock held by their shareholders,
and then TI and T2 dissolve.
• After the reorganization, T1 and T2 no longer exist, and the T1 and T2 shareholders
are now shareholders of C Corporation.
The end result of an "A" reorganization, merger or consolidation, is one surviving
corporation. It may be undesirable where management of the acquiring corporation
does not want to combine the assets of its corporation with those of the target.
A possible solution would be for the acquiring corporation to create a new subsidiary
and transfer the assets of the target company to the newly formed (or existing)
subsidiary in a nontaxable § 3 5 1 exchange.
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