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AICPA CPA-Business Exam - Topic 2 Question 128 Discussion

Posted by Brock on Jun 22, 2026 at 04:24 AM

Generally, a merger of two corporations requires:

Suggested Answer: A

Choice 'a' is correct. The merger of two corporations requires that a special meeting be held and that notice and copy of the merger plan be given to all stockholders of both companies. A merger generally requires the approval of both the directors and stockholders.

Choice 'b' is incorrect. While the stockholders' approval is required, in most states a majority vote is required; no state requires a unanimous vote.

Choice 'c' is incorrect. While the board's approval is required, a majority vote and not a unanimous vote is required.

Choice 'd' is incorrect. There is no requirement that all liabilities owed by the absorbed corporation be paid before the merger because the merged corporation becomes obligated to pay such liabilities upon the merger.


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12 comments · newest first
MA
Magda 2 months ago
C seems correct. Boards need to agree first before stockholders.
SA
Salome 2 months ago
I feel B makes sense too. Unanimous approval shows strong support.
SO
Solange 2 months ago
I think A is the right answer. Notice to stockholders is crucial.
JA
Janine 2 months ago
Not sure about the unanimous part, isn't there a way to merge with majority?
KA
Kattie 2 months ago
Boards need to approve too, right? That's standard.
BR
Brande 2 months ago
Wait, all liabilities have to be paid first? That seems odd.
EL
Elke 3 months ago
I agree, unanimous approval is a must!
HA
Hailey 3 months ago
A special meeting is definitely required for stockholders.
BE
Belen 3 months ago
I remember discussing liabilities in class, so option D seems relevant, but I’m unsure if they have to be paid off before the merger or if they can be handled afterward.
HO
Horace 3 months ago
I practiced a similar question, and I believe option C is important since both boards need to agree, but I can't recall if it's unanimous.
SE
Selma 3 months ago
I'm not entirely sure, but I feel like option B might be too strict. I thought some mergers could be approved with a simple majority.
HE
Herman 4 months ago
I think option A sounds right because I remember something about notifying stockholders before a merger.
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