Samantha Is an Architect, and She Is Also the Sole

question 2

Essay

Samantha is an architect, and she is also the sole shareholder of Sam's Shoes Inc. She wants to semi-retire from the shoe business soon and her three employees have all expressed great interest in taking over the company. However, they do
not have the financial resources necessary to make the purchase at this point in
time. Samantha is not in a hurry to receive the proceeds from the business as she will continue with her architectural work for another five years.
Samantha has heard about something called a 'share reorganization' and she has asked you to explain what it means and if it would apply to her situation.
Required:
A) Explain what a Subsection 86(1) share reorganization is, and if it would be useful for Samantha in her plans to semi-retire from her shoe store.
B) What is a significant risk factor that might be involved with a share reorganization?

• A) Explain what a Subsection 86(1) share reorganization is, and if it would be useful for Samantha in her plans to semi-retire from her shoe store.
• B) What is a significant risk factor that might be involved with a share reorganization?

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Definitions:

Trade-In Allowance

The amount credited to the buyer by the seller when the buyer gives a previously owned product as part of the payment for a new product.

Price Reduction

A decrease in the price of a product or service, often to attract more customers or respond to market conditions.

Used Product

A term referring to items that have been previously owned and utilized by one or more persons before being sold or given to a new owner.

Everyday Low Pricing

A pricing strategy where a company consistently offers products at low prices rather than relying on sales, discounts, or promotions.