Fact Pattern 31-4 Carrier Company exchanges some of its shares for some of the shares of Distribution Corporation. The exchange is used to create Equity Inc., whose business activity is to hold the shares of the two companies.
Refer to Fact Pattern 31-4. On the exchange of shares between Carrier and Distribution
A) both companies continue to exist.
B) both companies cease to exist.
C) only Carrier survives.
D) only Distribution survives.

Question

Quizplus · Accepted Answer

Both Carrier Company and Distribution Corporation continue to exist as separate entities, while Equity Inc. is created to hold their shares.

Fact Pattern 31-4 Carrier Company Exchanges Some of Its Shares