What are the different types of corporate governance structures for a merger or acquisition?
Mergers and acquisitions involve a number of different corporate governance structures. In Tennessee, the most common corporate governance structure for a merger or acquisition is a single-entity structure, also referred to as a merger or acquisition of one corporation into another. This structure is most commonly used when two companies decide to merge, forming a new corporate entity that combines the assets and liabilities of both companies. Another structure is a full consolidation, which is a merger of two separate companies in which both companies cease to exist and are replaced by a single parent company. In Tennessee, the parent company is the entity that is in control of the newly formed company. Alternatively, a joint venture can be used when two companies join forces and create a new corporate entity with shared ownership and profits. A joint venture usually includes a written agreement that specifically outlines the responsibilities and roles of the participants. Finally, a spin-off can occur when an existing company separates from its parent company to form another entity with its own management and operations. In Tennessee, this structure is typically seen in the form of parent companies selling off a division or business unit. All four of these structures are used in Tennessee for mergers and acquisitions.
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