In a Merger, Which of the Following Is True Regarding

question 57

Multiple Choice

In a merger, which of the following is true regarding the property of the absorbed corporation?

• A) It must be sold and distributed to the absorbed corporation's shareholders.
• B) It must be held in trust for at least one year to satisfy claims of creditors.
• C) It is obtained by the surviving corporation.
• D) It must be held in trust for at least six months to satisfy claims of creditors.
• E) It must be placed within the jurisdiction of the secretary of state for at least one year in order to satisfy claims of creditors.

---

Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.

General Partnership

A business arrangement where two or more individuals share ownership and the responsibility for managing a company and the liability for the company's debts.

Limited Liability

A legal framework where a company's shareholders' financial liability is limited to the amount they invested in the company.

Ease of Formation

The simplicity with which a new business or organization can be legally established.