A Plan of Merger with Conversion of Shares of Absorbed Corporation into Shares of Surviving Corporation is a type of business transaction where a merged entity (the surviving corporation) absorbs another entity (the absorbed corporation) and converts the shares of the absorbed corporation into shares of the surviving corporation. This type of merger is sometimes referred to as a conversion merger, stock-for-stock merger, or share exchange merger. In a Plan of Merger with Conversion of Shares of Absorbed Corporation into Shares of Surviving Corporation, the absorbed corporation will cease to exist as a separate entity and the shareholders of the absorbed corporation will become shareholders of the surviving corporation. The surviving corporation will issue new shares to the shareholders of the absorbed corporation, in exchange for all the shares of the absorbed corporation. The share exchange ratio will be specified in the merger agreement. The Plan of Merger with Conversion of Shares of Absorbed Corporation into Shares of Surviving Corporation is one of the most common forms of mergers. Other types of mergers include a Cash Merger, Reverse Stock Split Merger, Reverse Merger, and Triangular Merger.
Plan of Merger with Conversion of Shares of Absorbed Corporation into Shares of Surviving Corporation
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FAQ
A merger takes place when two or more businesses want to join forces and become a single entity. Many businesses may take part in a merger, but at the end of the day, there is only one survivor. The surviving entity owns all the assets, liabilities, and obligations of the companies that are party to the merger.
What are merger and consolidation? Merger is a situation where two (or more) corporations unite, one corporation which retains its corporate existence absorbing or merging in itself the other which disappears as a separate corporation. It is the absorption of one corporation by another which survives.
The buyer expressly or impliedly assumes the liabilities; the transaction in substance constitutes a merger or consolidation of buyer and seller under state law (also known as a de facto merger);
In the case of a merger, the company absorbed will cease to exist and only the acquiring company continues to exist. In the case of a consolidation, all the companies involved stop existing, and a new large company is formed.
The non-surviving corporation as a separate entity goes out of existence as part of the merger process, but does not technically ?dissolve,? which is a separate kind of corporate transaction.
The entity that continues is referred to as the ?survivor.? The corporation or unincorporated entity which has merged is called the ?merged? or ?transferor? entity. The merged entity disappears and its existence terminates. The assets of the merged entity are transferred to the survivor.
The surviving company in a merger is the company who takes over the rights and responsibilities of the firms that undergo the merger.
Merger through Absorption: An existing company may absorb one or more companies where the absorbed companies lose their identity. For example, Global Trust Bank was absorbed into Oriental Bank of Commerce. Bank of Madura was absorbed into ICICI Bank.