Which of the Following Statements Does Not Describe a Requirement

question 11

Multiple Choice

Which of the following statements does not describe a requirement that must be met in a tax-deferred reverse triangular merger?

• A) The 40 percent continuity of interest test must be met with respect to the stock transferred from the acquisition corporation to the target corporation shareholders.
• B) The target must hold substantially all of the target corporation's properties and the properties of the acquisition subsidiary after the merger.
• C) The target corporation shareholders must receive voting stock in the acquiring corporation.
• D) The continuity of business enterprise test must be met with respect to the target corporation.

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Definitions:

Illegal Contract

A contract that is not enforceable because it involves activities that are against the law.

Insurance Agreement

A formal contract where one party agrees to indemnify another against loss, damage, or liability in return for payment of a premium.

Demonstrated Requirements

Clearly defined and verified needs or conditions that must be met or complied with.

Limitation Clauses

Provisions in a contract or law that restrict the time period within which a legal action can be brought or certain rights can be enforced.