Section 368(a) recognizes several distinct patterns for combining corporations on a tax-free basis. This chart lines them up so the trade-offs are visible at a glance: the statutory subsection, a plain-English label, the consideration the acquiror is permitted to use, whether “substantially all” of the target’s assets must move, and any additional control or liquidation conditions.
The statutory merger forms sit at the top. A direct (statutory) merger under § 368(a)(1)(A) may use any consideration and does not require a transfer of substantially all assets. A forward triangular merger under § 368(a)(2)(D) also permits any consideration but requires that substantially all of the target’s assets be acquired, and no subsidiary stock may be used. A reverse triangular merger under § 368(a)(2)(E) requires voting stock for “control” (with any consideration for the remainder), the transfer of substantially all assets, and that the acquiror obtain “control” of the target in the transaction.
The acquisitive forms follow. A § 368(a)(1)(B) stock-for-stock acquisition must use solely voting stock of the acquiror or its parent, does not require a transfer of substantially all assets, and the acquiror must be in “control” of the target after the acquisition. A § 368(a)(1)(C) asset acquisition must use solely voting stock of the acquiror or parent, requires substantially all of the target’s assets to be transferred, and the target must liquidate.
The footnotes flag the cross-cutting rules: every form is subject to the continuity-of-interest requirement; a “B” reorganization may be effected through a reverse triangular merger of a transitory subsidiary; the “solely voting stock” requirements permit the target itself — but not the acquiror — to distribute cash or other property; the “C” reorganization is subject to a limited boot-relaxation rule; and no subsidiary stock may be used in a forward triangular merger.
Statutory and forward triangular mergers (A and D) accept any consideration, while the B, C, and reverse triangular (E) forms are constrained to voting stock — solely for B and C, and for the “control” block in E.
The D, E, and C reorganizations require a transfer of substantially all of the target’s assets; the direct merger (A) and stock acquisition (B) do not.
A reverse triangular merger requires acquiring “control” of the target in the transaction, and a B reorganization requires the acquiror to be in “control” of the target after the acquisition.
Every reorganization type remains subject to the general continuity-of-interest requirement, and a C reorganization additionally forces the target to liquidate.
