The basic requirements for a tax-free incorporation are relatively mechanical—(1) the transfer must be solely for stock in the corporation and (2) the transferors must be "in control" of the corporation immediately after the exchange. This requires that the transferors end up with at least 80 percent of the combined voting power of all classes of voting stock and at least 80 percent of the total number of shares of all other classes of stock.
Harl, Neil E.
""Midstream" Incorporation Considerations,"
Agricultural Law Digest: Vol. 1
, Article 1.
Available at: https://lib.dr.iastate.edu/aglawdigest/vol1/iss22/1