Question

If TCorporation Acquires S Corporation by exchanging T stock for 100% of the S Stock, and the S shareholders own more than 50% of the outstanding value of T stock, which of the following is most accurate?

A: In Substance, T Corporation will be the parent company of the T-S affiliated group.

B. S Corporation becomes a shell corporation.

C. T and S are required to file consolidated returns.

D. A reverse acquisition has taken place

Answer 1

give case T corporation acquires corporation by exchanging of the T stock for the S stock and share holders owns more than 50% of the outstanding value of t stock.

In the given case actually T corporation acquired the S corporation is the original transaction based on this transaction T corporation becomes parent company to the S corporation.

But the shareholders of S corporation holds more than 50% of stock in in operation. It means the stock of the corporation was given to S corporation in the form of acquisition by using reverse acquisition method.

T CORPORATION ACQUIRED ITS OWN STOCK THROUGH CORPORATION IN THE FORM OF ACQUISITION OF CORPORATION WHICH LEADS TO A REVERSE ACQUISITION.

In the given case the reverse acquisition has taken place.

So the answer is option D.