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Tax Implications Of A Merger: A Case Study

Author

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  • Valeriya Avdeev

Abstract

This paper considers possible tax implications of the merger between a wholly-owned subsidiary of Domestic Co, Inc. and International Co, Ltd, which took place on November 10, 2008. Even though the merger is structured in a way that it will most likely be respected as a tax-free reorganization under section 368(a), several important representations and warranties are not included in the merger agreement. Specifically, this particular merger agreement does not have a tax warranty requiring the Target Company to file all material tax returns and does not have a warranty requiring the parties to the reorganization to refrain from any actions that would prevent the merger from qualifying as reorganization within the meaning of section 368(a) of the Internal Revenue Code.

Suggested Citation

  • Valeriya Avdeev, 2014. "Tax Implications Of A Merger: A Case Study," Review of Business and Finance Studies, The Institute for Business and Finance Research, vol. 5(1), pages 51-59.
    • Handle: RePEc:ibf:rbfstu:v:5:y:2014:i:1:p:51-59
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    More about this item

    Keywords

    Tax-Free Reorganization; Legal Opinion; Covenants; Representations; Warranties; International Mergers;
    All these keywords.

    JEL classification:

    • K30 - Law and Economics - - Other Substantive Areas of Law - - - General
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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