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LEGAL TERMS DIRECTORY
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z Reverse Merger A method by which a private operating company arranges for its stock to be publicly traded following a merger or similar transaction with a publicly held shell company, pursuant to which the equity owners of the private company typically take control of the former shell company. Or, the acquisition by a reporting company (Public Shell) of a private company by the issuance of a block of stock that gives the private company over fifty percent (50%) control of the public shell. A method used to go public. A private company merges with an existing public company or a subsidiary of a public company. In a reverse merger, an operating private company merges with a public company which has no assets or known liabilities (the "shell" corporation). The public corporation is called a "shell" since all that exists of the original company is its corporate shell structure and shareholders. The private company obtains the majority of the shell’s stock (usually 90%). The private company normally will change the name of the public corporation (often to its own name) and will elect its Board of Directors which will appoint the officers. Welcome to our Legal Directory
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