A short-form merger:
A) is not a merger at all but a form of consolidation.
B) may be undertaken only with the subsidiary's directors' approval.
C) allows no appraisal rights for the parent's minority shareholders.
D) requires shareholder approval.

Question

Quizplus · Accepted Answer

A short-form merger allows the parent company to merge with its subsidiary without seeking approval from the subsidiary's minority shareholders. As a result, the minority shareholders have no appraisal rights, which means they cannot oppose or challenge the merger and get compensated for the value of their shares. However, the parent company's board of directors must approve the merger. Therefore, option A and D are incorrect. Option B is incorrect because it implies that the subsidiary's directors have any say in the matter, which they do not have in a short-form merger.

A Short-Form Merger