§138. Definitions relating to corporate reorganizations

A. Reorganization.

(1) In general. For purposes of this Chapter, the term "reorganization" means:

(a) a statutory merger or consolidation;

(b) the acquisition by one corporation, in exchange solely for all or a part of its voting stock, of stock of another corporation if, immediately after the acquisition, the acquiring corporation has control of such other corporation, whether or not such acquiring corporation had control immediately before the acquisition;

(c) the acquisition by one corporation, in exchange solely for all or a part of its voting stock (or in exchange solely for all of* a part of the voting stock of a corporation which is in control of the acquiring corporation), of substantially all of the properties of another corporation, but in determining whether the exchange is solely for stock the assumption by the acquiring corporation of a liability of the other, or the fact that property acquired is subject to a liability, shall be disregarded;

(d) a transfer by a corporation of all or a part of its assets to another corporation if immediately after the transfer the transferor, or one or more of its shareholders (including persons who were shareholders immediately before the transfer), or any combination thereof, is in control of the corporation to which the assets are transferred; but only if, in pursuance of the plan, stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualifies under R.S. 47:133 C or H or R.S. 47:134;

(e) a recapitalization; or

(f) a mere change in identity, form, or place of organization, however effected.

(2) Special rules.

(a) If a transaction is described both in Subsection A(1)(c) and A(1)(d) of this Section, then, for purposes of this Chapter, such transaction shall be treated as if it were described only in Subsection A(1)(d).

(b) Additional consideration in certain cases. If:

(i) one corporation acquires substantially all of the properties of another corporation,

(ii) the acquisition would qualify under Subsection A(1)(c) of this Section, but for the fact that the acquiring corporation exchanges money or other property in addition to voting stock, and

(iii) the acquiring corporation acquires, solely for voting stock described in Subsection A(1)(c) of this Section, property of the other corporation having a fair market value which is at least 80 per cent of the fair market value of all of the property of the other corporation, then such acquisition shall (subject to Subsection A(2)(a) of this Section) be treated as qualifying under Subsection A(1)(c) of this Section. Solely for the purpose of determining whether clause (iii) of the preceding sentence applies, the amount of any liability assumed by the acquiring corporation, and the amount of any liability to which any property acquired by the acquiring corporation is subject, shall be treated as money paid for the property.

(c) Transfers of assets to subsidiaries in certain cases. A transaction otherwise qualifying under Subsection A(1)(a) or A(1)(c) of this Section shall not be disqualified by reason of the fact that part or all of the assets which were acquired in the transaction are transferred to a corporation controlled by the corporation acquiring such assets.

B. Party to a reorganization. For purposes of this Chapter, the term "a party to a reorganization" includes:

(1) a corporation resulting from a reorganization, and

(2) both corporations, in the case of a reorganization resulting from the acquisition by one corporation of stock or properties of another.

In the case of a reorganization qualifying under Subsection A(1)(c) of this Section, if the stock exchanged for the properties is stock of a corporation which is in control of the acquiring corporation, the term "a party to a reorganization" includes the corporation so controlling the acquiring corporation. In the case of a reorganization qualifying under Subsection A(1)(a) or A(1)(c) of this Section by reason of Subsection A(2)(c) of this Section, the term "a party to a reorganization" includes the corporation controlling the corporation to which the acquired assets are transferred.

C. Control. For purposes of this Chapter the term "control" means the ownership of 80 per cent of the total combined voting power of all classes of stock entitled to vote and at least 80 per cent of the total number of shares of all classes of stock of the corporation.

Amended by Acts 1958, No. 443, §5.

*In (A)(1)(c), "all of a part" is as it appears in enrolled bill.