Type B stock for stock acquisition

A Type “B” reorganization is a stock-for-stock transaction in which one corporation (the acquiring corporation) acquires the stock of another corporation (the target corporation). Only voting stock of the acquiring corporation or its parent may be used in the acquisition. After the transaction, the acquiring corporation must control the target corporation. B reorganizations usually take place at the target shareholder level and do not have immediate tax consequences for the target corporation.

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