Corporate Income Taxes - Reorganizations and Consolidated Tax Returns Research Paper

Corporate Income Taxes - Reorganizations and consolidated Tax Returns - Research Paper ExampleOne disadvantage of this type of reorganization is the dealing with take issue shareholders if the laws in place require a consent to the deal by majority shareholders of the acquiring and acquired corporations. many of these dissenting shareholders are difficult to deal with. Moreover, the law requires that all liabilities of the propose company be fabricated by the acquiring iodine (Ginsburg, 2012).Type B reorganizations have the advantage of isolating the liabilities of the target in a subsidiary. As such, these commitments do non affect the principal acquiring corporation. Moreover, the assets and contracts that are deemed non-transferrable are not lost in the reorganization. Type B reorganizations are simple and easy to carry out. They involve no losses or gains by either the shareholders or the corporations involved. These reorganizations have the disadvantage that only the votin g have a bun in the oven can be used as consideration by the acquiring company. Another disadvantage of the uniform is the concomitant that the minority shareholders of the target can bring problems to the acquiring company and its operations. Thus, for the acquiring company to be safe, it has to acquire 100% of the target companys stock.The type C reorganizations have the characteristic of one company acquiring all the assets of the target. It exchanges these assets for its voting stock, as well as a limited entreaty of some of its other property. One of the advantages of this reorganization is the fact that the acquiring company can choose the liabilities of the target that it wants to assume. In so doing, the acquiring company is not overwhelmed with the unwanted liabilities of the acquired corporation and does not undergo much struggle in offsetting them. An acquiring company chooses the commitments that it knows it can easily meet and settle. Another advantage is the fact that the