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Simple English definitions for legal terms
B reorganization
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A quick definition of B reorganization:
B Reorganization is a type of financial restructuring that involves one corporation exchanging its voting shares for another corporation's voting shares. It is a way for companies to improve their tax treatment under the Internal Revenue Code. B Reorganization is one of several types of reorganizations classified by the Code with different letters, including C, D, E, F, and G reorganizations. Each type of reorganization involves different methods of restructuring a corporation, such as mergers, consolidations, recapitalizations, and asset transfers.
A more thorough explanation:
A B reorganization is a type of financial restructuring of a corporation that involves exchanging voting shares with another corporation's voting shares. This type of reorganization is done to improve the tax treatment of the corporation under the Internal Revenue Code.
- Company A exchanges its voting shares for Company B's voting shares in order to improve its tax treatment.
- Company C undergoes a B reorganization by exchanging its voting shares with Company D's voting shares.
These examples illustrate how a B reorganization involves exchanging voting shares with another corporation's voting shares to improve the tax treatment of the corporation. This type of reorganization is classified under the Internal Revenue Code as a specific type of reorganization.