Shareholder Notice and Approval When Merging a Subsidiary and a Parent
In Tennessee, a parent corporation owning at least 90% of the voting shares of another entity may merge that entity into itself without seeking the approval of the subsidiary’s shareholders. T.C.A. 48-21-105. If the parent company is the surviving entity, no vote of its shareholders is required either. Id. However, in either case, notice of the merger must be provided to the subsidiary’s shareholders prior to its consummation. Id.
Compliance with the Tennessee notice and approval requirements should always be confirmed at the outset of any merger discussions.
what if subsidiary has a NOL carryover?
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