An example of a difference in types of business combination is:
A) A statutory merger can only be effected by an asset acquisition while a statutory consolidation can only be effected by a capital stock acquisition.
B) A statutory merger can only be effected by a capital stock acquisition while a statutory consolidation can only be effected by an asset acquisition.
C) A statutory merger requires dissolution of the acquired company while a statutory consolidation does not require dissolution.
D) A statutory consolidation requires dissolution of the acquired company while a statutory merger does not require dissolution.
E) Both a statutory merger and a statutory consolidation can only be effected by an asset acquisition but only a statutory consolidation requires dissolution of the acquired company.

Question

Quizplus · Accepted Answer

A statutory merger involves the dissolution of the acquired company into the surviving company, while a statutory consolidation creates a new company from the merging companies. Therefore, choice C is the correct answer as it correctly identifies the difference in terms of whether or not dissolution is required. Choice A and B are incorrect as they do not accurately describe the requirements for each type of business combination. Choice D is incorrect as it describes the opposite of the correct answer. Choice E is also incorrect as it incorrectly suggests that both types of business combinations require asset acquisitions and only one requires dissolution.

An Example of a Difference in Types of Business Combination