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members that fulfill the purpose or mission for which a not-for-profit entity (NFP) exists. [FAS 164, paragraph A32(c), sequence]

958-805-55-41 Furthermore, because an integrated set of activities that is in the development stage might not have outputs, [FAS 164, paragraph A35, sequence 136.1] an acquirer should consider, in addition to the factors in paragraph 805-10-55-7, whether the set will be able to obtain access to beneficiaries or members that will purchase or otherwise receive the outputs that fulfill the purpose or mission for which an NFP exists. [FAS 164, paragraph A35(d), sequence]

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    > Identifying the Acquirer

958-805-55-42 Paragraph 958-805-25-15 provides guidance used by the combining entities to determine the acquirer. If applying the guidance in that paragraph does not clearly indicate which of the combining entities is the acquirer, paragraph 958-805-25-16 requires that the combining entities consider the factors in paragraphs 805-10-55-10 through 55-15 and in paragraphs 958- 805-55-43 through 55-46.

958-805-55-43 If one of the combining entities can select or dominate the process of selecting the management team of the resulting organization, that entity is likely to be the acquirer. [FAS 164, paragraph A41, sequence 142]

958-805-55-44 The acquirer usually is the entity whose governing body has the ability to select or dominate the process of selecting the governing body of the combined entity, which may be a newly created entity, although whether a new entity is created is not a pertinent factor in identifying an acquisition (see paragraph 958-805-55-1). That ability may be demonstrated by an entity’s powers to elect or appoint members to the combined entity’s governing body or an entity’s powers to dominate the process of selecting a voting majority. In determining whether one of the entities has the power to dominate the selection process, consideration shall be given to the existence of rights to elect or appoint members to the governing body that are provided by the entity’s articles of incorporation, by its bylaws, or by provisions in the acquisition agreement. Consideration also shall be given to the ability of one entity to dominate the selection process through other means. [FAS 164, paragraph A44, sequence 145.1]

958-805-55-45 The combined entity often retains the mission and the legal name of the acquirer. [FAS 164, paragraph A42, sequence 143]

958-805-55-46 The following factors should be considered in assessing which entity is able to select or to dominate the process of selecting the governing body: [FAS 164, paragraph A44, sequence 145.2]


If the combined entity’s articles of incorporation or bylaws state that the members of the governing body are appointed, whether one of the


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