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LSDefine

Simple English definitions for legal terms

continuity of interest

Read a random definition: descent and distribution

A quick definition of continuity of interest:

Continuity of interest refers to a rule that applies to certain types of business transactions. In simple terms, it means that when one company buys another company, the shareholders of the company being bought must keep some ownership in the new company to avoid paying taxes on the transaction. Similarly, if a company splits into two or more separate companies, the shareholders must keep some ownership in each of the new companies to avoid taxes. This rule helps ensure that the transaction is not just a way to avoid taxes, but rather a legitimate business deal.

A more thorough explanation:

Definition: Continuity of interest refers to a legal requirement that must be met in certain types of corporate reorganizations to qualify for tax-deferred treatment. This requirement mandates that the shareholders of the target corporation must retain an interest in the acquiring or controlled corporation.

Example 1: In an acquisitive reorganization, the shareholders of the target corporation must hold shares in the acquiring corporation to qualify for tax-deferred treatment. For instance, if Company A acquires Company B, the shareholders of Company B must receive shares in Company A and hold them for a certain period to avoid immediate tax consequences.

Example 2: In a divisive reorganization, the shareholders of the target corporation must retain an interest in both the distributing and the controlled corporations to qualify for tax-deferred treatment. For example, if Company A splits into two separate entities, Company B and Company C, the shareholders of Company A must hold shares in both Company B and Company C to avoid immediate tax consequences.

These examples illustrate how continuity of interest is a legal requirement that must be met in certain types of corporate reorganizations to qualify for tax-deferred treatment. It ensures that the shareholders of the target corporation maintain a stake in the new entity and prevents them from immediately realizing taxable gains or losses.

continuity of existence | continuity-of-life doctrine

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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
Mich overrated (Dean Z please let me in even tho i didnt apply and I am below both 25ths)
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