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
Some of the hallmark events in the evolution of nuclear law are: a.   1945 - The United States tested its first nuclear bomb. b.   1945 - Hiroshima and Nagasaki were attacke

What are the Consensus in the political stream Political events move along at their own pace, and according to their own dynamics and rules. Developments in the political sphe

Delivery of Good – Sales of Goods Therefore this is the voluntary transfer of possession from one person to other. Actually delivery usually takes any of the next forms, namel

Principles and Presumptions of Construction: However in the course of settling some of these disputes the courts in England have elaborated the rules that they will utilized i

Part A Companies can raise finance by borrowing money and securing the debt by way of fixed or floating charge. Using case law in your answer explain what is the distinction b

Explain United Nations Commission on India and Pakistan One such resolution dated 20th  January 1948 created United Nations Commission on India and Pakistan (UNCIP), which was

Explain the term - Policy change The role of the policy entrepreneur has several implications for our understanding of the policy process. While social scientists often look to

Determine the term - Real Income Effects This linkage between countries takes place through the current account of the balance of payments. It occurs when a change in one count

Private Bill - categorization of law: In fact order 120 offers like whereas leave to proceed is granted the promoters shall:; as a. First is pay to the Clerk a fee of £10 f

Explain International Atomic Energy Agency The  NPT  also  creates  rights and  obligations on  the  members of  NPT  to  comply  with  the provisions of the treaty and to ensu