{"data":{"id":"us/16-cfr-802.10","jurisdiction":"us","citation":"16 CFR 802.10","heading":"Stock dividends and splits; reorganizations.","body":"(a) The acquisition of voting securities pursuant to a stock split or pro rata stock dividend is exempt from the requirements of the Act under section 7A(c)(10).\n(b) An acquisition of non-corporate interests or voting securities as a result of the conversion of a corporation or unincorporated entity into a new entity is exempt from the requirements of the Act if:\n(1) No new assets will be contributed to the new entity as a result of the conversion; and\n(2) Either:\n(i) As a result of the transaction the acquiring person does not increase its per centum holdings in the new entity relative to its per centum holdings in the original entity; or\n(ii) The acquiring person controlled the original entity.\nExamples:\n1. Partners A and B hold 60 percent and 40 percent respectively of the partnership interests in C. C is converted to a corporation in which A and B hold 60 percent and 40 percent respectively of the voting securities. No new assets are contributed. The conversion to a corporation is exempt from notification for both A and B.\n2. Shareholder A holds 55% and B holds 45% of the voting securities of corporation C. C is converted to a limited liability company in which A holds 60% and B holds 40% of the membership interests. No new assets are contributed. The conversion to a limited liability company is exempt from notification because A controlled the corporation. If however, B holds 55% and A holds 45% in the new limited liability company, the conversion is not exempt for B and may require notification because control changes.\n3. Shareholders A, B and C each hold one third of the voting securities of corporation X. Pursuant to a reorganization agreement, A and B each contribute new assets to X and C contributes cash. X is then being reincorporated in a new state. Each of A, B and C receive one third of the voting securities of newly reincorporated C. The reincorporation is not exempt from notification and may be reportable for A, B and C because of the contribution of new assets.","path":["Title 16—Commercial Practices","CHAPTER I—FEDERAL TRADE COMMISSION","SUBCHAPTER H—RULES, REGULATIONS, STATEMENTS AND INTERPRETATIONS UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976","PART 802—EXEMPTION RULES"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-16.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:24:29Z","sha256":"0d1d948bdcf1b28c07dbd946647d07b272c723910b057add17d7543695b99fc5","source_id":"us-cfr","stale":true,"prev":"us/16-cfr-802.9","next":"us/16-cfr-802.20"},"notice":"GroundRules: Original legal text. Not legal advice."}