Laws, Regulations & Annotations

C

220.0000 CHANGE IN OWNERSHIP

Annotation 220.0664.500

220.0664.500 Statutory Merger. A statutory merger is a transaction pursuant to relevant sections of the Corporations Code whereby two or more entities combine into a single entity that was one of the pre-existing entities. When two entities merge in a statutory merger, the entity that ceases to exist is called the disappearing entity and the other is called the surviving entity. In a statutory merger, all of the assets of the disappearing entity transfer to the surviving entity by "operation of law." This means that the transfer happens automatically and without the disappearing entity having to deed the assets to the surviving entity. Since a statutory merger results in a transfer of the real property of the disappearing entity under state law, a statutory merger causes a change in ownership of the real property of the disappearing entity pursuant to Revenue and Taxation Code section 61(j). Additionally, any ownership interests in legal entities that the disappearing entity owns directly would also transfer to the surviving entity as a result of the merger, which could result in a change in control of such subsidiaries under section 64(c)(1), or a change in ownership under section 64(d). C 1/30/2012.