Which of the Following Is One of the Conditions Necessary

question 1

Multiple Choice

Which of the following is one of the conditions necessary for an amalgamation to result in a tax-free/deferred combination?

• A)At least one of the corporations must be Canadian.
• B)Fifty percent of the assets and liabilities of the old corporation must become assets and liabilities of the new corporation.
• C)The two corporations must be in a similar line of business.
• D)All of the shareholders of the old corporations must become shareholders of the new corporation.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government on their income or profits.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its operational liquidity.

Operating Cash Flows

The cash generated from the normal operations of a business, excluding cash movements from investing and financing activities.

Depreciated

Refers to the decrease in value of an asset over time due to wear and tear, age, or obsolescence.