Question

A short-form merger does not require the prior approval of shareholders because it involves: Appraisal rights will be available: Shareholders of a corporation that ceases to exist when a merger or consolidation takes place:

Answer 1

A short-form merger does not require the prior approval of shareholders because it involves the merger of a subsidiary corporation into its parent corporation. For a short-form merger to occur, the parent company must own at least 90% of all outstanding stock of the subsidiary.

Appraisal rights will be available when a shareholder of the subsidiary disapproves the merger. The shareholder has the right to dissent and the corporation should pay him/her the fair market value of their stock.

Shareholders of a corporation that ceases to exist when a merger or consolidation takes place and decides to exercise his/her appraisal rights is called a dissenting shareholder.