The Law of Corporations and Other Business Organizations

Chapter Review Questions

1. What is the difference between a consolidation
and a merger?

2. What is the final relationship between
two corporations that were parties to a
share exchange?

3. What is a “surviving” corporation in a
merger transaction?

4. What general rights does a dissenting
shareholder have?

5. What are the main purposes of the federal
antitrust laws?

6. Do all mergers and acquisitions require
shareholder approval?

Give examples.

7. If the sole shareholder of Diane’s Auto
Parts, Inc., which holds 95 percent of the
stock of the D.G. Auto Parts Corporation,
decides to merge the two corporations
together, with Diane’s Auto Parts, Inc.
being the surviving corporation, what
type of merger would it be?

Why are the requirements for shareholder
approval different for this type of merger?

8. What is a letter of intent?

9. What constitutes due diligence work?

10. Suppose that the shareholders of Kate’s
Household Products, Inc. are interested in
acquiring one of their biggest suppliers,
Nixon Chemical Corporation, but they
are concerned about past problems that
Nixon Chemical has had with toxic waste
disposal. What type of acquisition might
be the most beneficial to Kate’s Household
Products, Inc.?

11. What are some possible disadvantages of
acquiring an auto dealership, or a corporation
that owns several pieces of real estate,
through an asset acquisition rather
than a stock acquisition transaction?