Now it's your turn!!!!

Any person can start their own business. All you need is an idea and a dedicated team. You can formulate your own Business Plan as to what you wish to achieve through your business, your goals, who your customers will be and where all you want to have your operations. But think about. All this will be in your mind and on paper.                                                                            

                                                                          What Next?

                                         Global Mergers -Meeting all your financial needs

INDIA - ONE OF THE WORLD'S PROMINENT HUBS FOR ENTREPRENEURSHIP

Boost to Start – ups

If we go back in history, there are numerous and countless organizations that took birth on the land of our country be it small or large, and the trend is still in.

Whether you are in the land where dreams come true – Mumbai, the silicon valley - Bangalore, the country’s capital - Delhi, God’s own country – Kerala or any other state, if you have an idea, that’s all that you need.

Now all hopes and eyes are resting on our very popular Prime Minister Mr. Narendra Modi who is on his way to Silicon Valley. It is expected that this visit of his will be the most beneficial to the start ups. A list of issues and solutions with regards to start ups would be the agenda of the visit as Silicon Valley is among the top backers of Indian Start ups.

Indian government has always been encouraging more and more start ups in the country. So now it is up to each one of us to take up the initiative to start our own venture, however little it may be initially but we at Global Mergers are there to help you succeed.

www.globalmergers.com

080-40993525

INVESTMENT

Changing trends in investment sector.....

Evolution is the universal truth that cannot be defined. Everything that happens tends to form a pattern take the scenario of the financial sector for that matters; The cycle, ups and downs, crisis, new regulations, process, preference and much more.

It’s depends all on us as individuals &institutes as to how we interpret it to make decisions &respond accordingly.

It is also evident that there is interdependence of all sectors. Media and Communications sector also plays a vital role as it has a direct influence on the way people think and react to various changes in their external environments.

The government and other important players always aim at regulating and keeping in check the fluctuations in the financial sector to avoid any unfavourable situation like the crisis that happened six years ago.

globalmergers@gmail.com

080-40993525

DEBT/COLLATERAL FUNDING AND EQUITY FUNDING - Bangalore

We at Global Mergers, assist our clients in debt/collateral funding and equity funding. We have close association with several PEs, VCs, AIs, and HNIs for equity funding, and we also have good relationship with Banks and Financial Institutions for debt/collateral funding. We syndicate deals across a variety of banking Products including Project and Working Capital Loans, External Commercial Borrowings, Debt Refinancing, Short and Medium Term Corporate Loans etc. Whatever your financial needs are, we can help you.
Please Contact : - Jayesh. Mo. : - 7259767985. E-Mail : - jayesh@globalmergers.in

Accounting for Amalgmations

Procedure for accounting for amalgamations:

An Amalgamation can be in the nature of  either uniting of interest which is refereed to as 'Amalgamation in the nature of merger' or 'Acquisition'.The conditions to be fulfilled for an Amalgamation to be treated as an 'Amalgamation in the nature of merger' are as follows:

• All assets & liabilities of the transferor company before amalgamation should become the assets & liabilities of the transferee company.
• The consideration payable to the shareholders should be discharged by the transferee company by issue of equity shares. Cash can be paid in respect of fractional shares.
• The business of the transferor company is intended to be carried on by the transferee company.
• The transferee company intends to incorporate into its balance sheet the book value of  assets & liabilities of the transferor company without any adjustment except to the extent needed to ensure uniformity of accounting policies. An Amalgamation which is not in the nature of merger is treated as an 'Acquisition'.

The Accounting treatment of an amalgamation in the books of the transferee company is dependent on the nature of amalgamation as stated above. For a Merger, the 'Pooling of Interest' method is to be used and for an acquisition the 'purchase' method is used.

Under the 'Pooling of Interest' method, the assets and liabilities of the merging companies are aggregated. Likewise, the reserves appearing in the balance sheet of the transferor company are carried forward into the balance sheet of the transferee company. The difference in capital on account of the exchange ratio is adjusted  in the reserves.

Under the 'Purchase' method the assets and outside liabilities of the transferor company are carried forward into the books of the transferee company at their fair market value.The difference between the purchase consideration and the net book value of assets over liabilities is treated as 'goodwill' that has to be amortized over a period not exceeding five years. If the purchase consideration is less than net book value of assets over liabilities, the difference is shown as 'capital reserve'.

                                                 Cash v/s stock compensation:

Whether to pay for an acquisition in cash or in stock is an important decision. The choice depends on three factors:

• Overvaluation : If the acquiring firms stock is overvalued relative to the acquired company;s stock, paying in stock can be less costly than paying in cash.
• Taxes: From the point of view of shareholders of the acquired firms, cash compensation is a taxable transaction whereas stock compensation is not.
• Sharing of risk and rewards: If cash compensation is paid, shareholders of the acquired company neither bear the risk nor enjoy the rewards of the merger.Whereas if stock compensation is paid, shareholders of the acquired company partake in the risks as well as rewards of the merger

Tax benefits through M & A

Tax Aspects of  M & A:

An amalgamation involves the merger of one or more companies into an existing companies or to merger of two or more companies into a new company formed for the purpose.The merging companies are called amalgamating companies and the merger companies are called the amalgamated company. The companies are entitled to various Tax benefits, if the following conditions are fulfilled:

(a.)All the properties and liabilities of the amalgamating company immediately before amalgamation become the property and liabilities of the amalgamated company by virtue of amalgamation.
(b.)Shareholders holding not less than 90 percent in value of the shares in amalgamating company become shareholders of the amalgamated company by virtue of amalgamation.

Tax concessions are granted to the amalgamated companies only if the amalgamating company is an Indian company.Following deductions to the extent available to the amalgamating company and remaining absorbed or unfulfilled will be available to the amalgamated company.

• Capital expenditure on scientific research
• Expenditure on acquisition of patent right or copy right, know how 
• Expenditure for obtaining license to operate telecommunications services
• Amortization of preliminary expenses
• Carry forward of losses and unabsorbed  depreciation

Of the above benefits,the most important is the one relating to carry forward of the losses and unabsorbed depreciation of the amalgamating company.Generally accumulated depreciation and unabsorbed depreciation cannot be carried forward and set off by another asses see. However as an exception, Carry forward and set off is available in case of amalgamation, Subject to the following conditions.

• The amalgamated companies continues to hold at least three fourth of the book value of the fixed assets of the amalgamating company for the period of five years from the effective date of amalgamation.
• The amalgamated company carries on the business of amalgamating company for a period of five years.
• The amalgamated company achieves a level of production of atleast 50 percent of the installed capacity of the said undertaking before the end of four years from the date of amalgamation and continues to maintain the said minimum level of production till the end of five years from the date of amalgamation.

Why go through M & A

There are many good reasons for growing your business through an acquisition or merger. These include:

1.)Obtaining quality staff or additional skills, knowledge of your industry or sector and other business intelligence.
 For instance, a business with good management and process systems will be useful to a buyer who wants to improve their own.

2.)Your business under performing. For example, if you are struggling with regional or national growth it may well be less expensive to buy an existing business than to expand internally.

3.)Macroeconomic instability and high volatility in financial markets are typical examples of factors diluting the expectations of investors and causing them to halt merger decisions

4.)Organic growth, i e .Businesses in the same sector or location can combine resources to reduce costs, eliminate duplicated facilities or departments and increase revenue.

5.)The merged company can make use of the very best minds from both companies and make up for shortfalls in the individual companies' skill-sets.

6.)Many companies finds the best way to get ahead is to expand ownership boundaries through mergers and acquisitions.

   M&A comes in all shapes and sizes, and investors needs to focus on best benefits involved in M&A.