In a statutory merger,
A) Only known assets and liabilities are automatically transferred to the buyer.
B) Only known and unknown assets are transferred to the buyer.
C) All known and unknown assets and liabilities are automatically transferred to the buyer except for those the seller agrees to retain.
D) The total consideration received by the target's shareholders is automatically taxable.
E) None of the above.

Question

Quizplus · Accepted Answer

In a statutory merger, all known and unknown assets and liabilities are automatically transferred to the buyer except for those the seller agrees to retain. This is known as the "all-or-nothing" rule, which means that everything owned by the target company is automatically owned by the buyer after the merger. However, the seller can negotiate for certain assets or liabilities to be excluded from the transfer. The total consideration received by the target's shareholders is not automatically taxable, as the tax implications would depend on various factors such as the nature of the consideration received, the tax laws of the relevant jurisdictions, and the structure of the transaction.

In a Statutory Merger