§ 801.50 Formation of unincorporated entities.

(a) In the formation of an unincorporated entity (other than in connection with a consolidation), even though the persons contributing to the formation of the unincorporated entity and the unincorporated entity itself may, in the formation transaction, be both acquiring and acquired persons within the meaning of § 801.2, the contributors shall be deemed acquiring persons only and the unincorporated entity shall be deemed the acquired person only. (b) Unless exempted by the Act or any of these rules, upon the formation of an unincorporated entity, in a transaction meeting the criteria of Section 7A(a)(1) and 7A(a)(2)(A) (other than in connection with a consolidation), a person is subject to the requirements of the Act if it acquires control of the newly-formed entity. Unless exempted by the Act or any of these rules, upon the formation of an unincorporated entity, in a transaction meeting the criteria of Section 7A(a)(1), the criteria of Section 7A(a)(2)(B)(i) (other than in connection with a consolidation), a person is subject to the requirements of the Act if: (1)(i) The acquiring person has annual net sales or total assets of $100 million (as adjusted) or more; (ii) The newly-formed entity has total assets of $10 million (as adjusted) or more; and (iii) The acquiring person acquires control of the newly-formed entity; or (2)(i) The acquiring person has annual net sales or total assets of $10 million (as adjusted) or more; (ii) The newly-formed entity has total assets of $100 million (as adjusted) or more; and (iii) The acquiring person acquires control of the newly-formed entity. (c) For purposes of paragraph (b) of this section, the total assets of the newly-formed entity is determined in accordance with § 801.40(d). (d) Any person acquiring control of the newly-formed entity determines the value of its acquisition in accordance with § 801.10(d). (e) The commerce criterion of Section 7A(a)(1) is satisfied if either the Activities of any acquiring person are in or affect commerce, or the person filing notification should reasonably believe that the Activities of the newly-formed entity will be in or will affect commerce.