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LSDefine

Simple English definitions for legal terms

continuity of business enterprise

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A quick definition of continuity of business enterprise:

Continuity of Business Enterprise: A rule that applies to when one company buys another company. The buying company must keep doing the same kind of business that the other company was doing before, or use a lot of the other company's things to start a new business. This is important because it helps the buying company avoid paying taxes on the purchase right away.

A more thorough explanation:

Continuity of business enterprise is a rule that applies to mergers and acquisitions. It states that the acquiring company must continue the target company's historical business or use a significant portion of its assets in a new business to qualify for tax-deferred treatment.

For example, if Company A acquires Company B, and Company B is primarily in the business of manufacturing widgets, Company A must continue to manufacture widgets or use a significant portion of Company B's assets to manufacture widgets to qualify for tax-deferred treatment. If Company A decides to sell off Company B's widget manufacturing business and use the proceeds for a different business, the acquisition would not qualify for tax-deferred treatment.

Another example would be if Company A acquires Company B, and Company B is primarily in the business of providing consulting services. Company A could continue to provide consulting services or use a significant portion of Company B's assets to provide consulting services to qualify for tax-deferred treatment.

Overall, the continuity of business enterprise rule ensures that companies cannot use mergers and acquisitions solely for tax benefits without continuing the target company's business or using its assets in a similar business.

continuity | continuity-of-enterprise doctrine

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9:31
some people hate him. some people love him, but he a real one: https://youtu.be/w5oEqiVQcF4?t=173
9:32
[kevin oleary]
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
WorthlessAttractiveZombie
9:34
I mean if Fordham doesn't release today I will purposefully get on a train, go to new york, and then take the stinkiest shit inside the admission office's toilet (potentially clogging it and forcing them to get a plumber)
IS IT ONLY ON MY END WHY DID THAT SEND TEN MILLION TIMES
HELLO
WorthlessAttractiveZombie
9:35
it sent a million times lol
WHAT HAPPENED
yeah i thought you were tweaking for a second
i'm so sorry everyone what the actual fuck this website hates me
WorthlessAttractiveZombie
9:35
Jack's just tweaking on LSD no biggie
to be fair this accurately represents my mental state
election day psychosis coming in hot (fordham)
usc pls pull through .....
i literally just need one A so i can relax before my ED decision
WorthlessAttractiveZombie
9:38
oh that's right USC might release
soapy
9:43
USC still has not looked at my app
WorthlessAttractiveZombie
9:43
when did you submit soapy?
soapy
9:44
10/16
WorthlessAttractiveZombie
9:44
to be fair it took them almost 2 months for me to go under review
soapy
9:44
Feelin a bit stressed, as I've got no date change for Michigan either despite applying 10/7
WorthlessAttractiveZombie
9:45
I have not had a date change either for Mich but I've seen people get in without one so who knows
I applied 9/25 to like 6 schools and some (Houston) have no date change yet so dw
soapy
9:46
But do people get in without addresses going long?
WorthlessAttractiveZombie
9:46
it's tough to tell because a lot of people type out their addresses long to begin with
soapy
9:46
Ah. I didn't. Looking back, my Mich supplement kind of sucks, so there's that
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