Pampered Pooches, Inc. proposes a merger with Sit Means Sit, Inc. (SMS). SMS will obtain the approval of its shareholders; and then, by operation of law, SMS shares will become shares of the surviving corporation, Pampered Pooches, Inc.
Assume that prior to the merger Paulie Smith owned 25% of SMS stock that he purchased three years before in a private placement. Smith will only own 2% of the Pampered Pooches shares and will not be an officer or director of the merged company.
- Is it necessary to register the Pampered Pooches shares?
- May Smith freely resell his Pampered Pooches shares?
- Would it matter whether the shares were registered in connection with the merger?
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