Reconstructions - mergers and winding up, Business Law and Ethics

Reconstructions, Mergers And Winding Up:

(a) Reconstructions, mergers and takeovers are not defined terms. A reconstruction may be an alternative of the structure of a group of companies or an alteration of the capital structure of a single company.

(b) A merger (also called an amalgamation) is a transaction whereby two or more companies are combined in some way in united ownership.  The simplest method is a takeover bid whereby Company A acquires the issued share capital of Company B so that they form a single group in which A is the holding company and B is the subsidiary.  A more complex type of merger entails the transfer of a business (and the assets employed in it) from one company to another.  If the acquiring company (in either a take-over bid for shares or a purchase of assets) allots its own shares as consideration for the acquisition the members of the company whose business or share capital is acquired will become additional members of the acquiring company.

(c) A company may absorb a minority shareholding in its partly-owned subsidiary in exchange for cash or shares.

(d) Finally a company may seek to alter the rights of its creditors, eg. by variation of the rights of debenture holders, by mutual agreement.

(e) In these transactions it is first necessary to select the only available (or if more than one) the most convenient method to effect the proposed change.  The advantages and disadvantages of each method are explained below in connection with the method itself.  The essential elements of every method are that if a decisive majority of members or creditors can be obtained by the correct procedure the minority (if any) who dissent will be bound by the majority decision.  But in each case the minority is given safeguards or rights of objection to the court to balance the element of compulsion.  Although a minority cannot frustrate the change by their opposition they are entitled to a fair deal.

Posted Date: 1/15/2013 3:13:22 AM | Location : United States

Related Discussions:- Reconstructions - mergers and winding up, Assignment Help, Ask Question on Reconstructions - mergers and winding up, Get Answer, Expert's Help, Reconstructions - mergers and winding up Discussions

Write discussion on Reconstructions - mergers and winding up
Your posts are moderated
Related Questions
Delays: However certain standard defences knows as "essoins" caused considerable delay earlier than a case could be heard.  Now for a certain condition like the hearing of a c

Advocates Whether in sec 3(1) of the Interpretation and General Provisions Act cap 2 and sec 2 of the Advocates Act (1989) an advocate is a person that whose name has been dul

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Equity -Non-Recognition of Trusts Therefore the common law did not recognize "trusts".  Like a case whether A conveyed property to B "on trust" for C the common law courts cou

Q. Show Key considerations in defining phoenix activity? In determining an appropriate definition of phoenix activity, there are a range of considerations that must be accounte

QUESTION 1 (i) What are the principles applicable regarding the unjustified termination of a contract of employment (ii) What would be your views regarding the legal issues

Explain the Case Clipperton Island In Clipperton Island Case , an award was made in the arbitration which resolved a dispute between France and Mexico, in 1887, on the subjec

Winding-Up:    (a) A company is dissolved, i.e. ceases to exist, when its name is removed from the register.  It is usually necessary, before it can be dissolved, to liquida

COMMENCEMENT: However section 46(4) of the constitution offers that like, a law made through Parliament shall not come in operation whether it has been published in the Englan

Nationality of criminal jurisdiction Nationality is the legal concept which provides a link between a State and persons living within that State. It determines the rights and o