“B” Reorganization


Type “B” involves the acquisition of stock of one corporation by another, and the target corporation becomes a subsidiary of the acquiring, as a result.

Requirements of “B” Reorganization

1) The acquisition must be one of a series of acquisitions that are part of an overall plan to acquire the requisite control.

2) The plan of acquisition must be carried out in a relatively short period of time such as 12 months.

3) The acquisition must be made solely for voting stock.


* Targets shareholders exchange Target stock solely for Acquiring ‘s voting 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.

* Acquiring must be in control of Target immediately after the exchange.

*Target becomes Acquiring ‘s subsidiary.

*Targets former shareholders become Acquiring shareholders.

Proceed to “C” Reorganization

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Bill Evans