Terms Used When Restructuring a Business

Corporate and company law requires intimate knowledge of legal terms. The following article provides a brief overview of important business terms used by Coachella Valley corporate attorneys. These business terms are often used when two business organizations combine in a mutual interest. 

Mergers

Merger is a term used when two companies join using their assets to create an efficient market. Generally, merger is a strategic business partnership used to increased market share. Mergers can take place in the same industry or different industries.

Acquisitions

Unlike a merger, an acquisition is the takeover of one company by another company. Usually, the acquirer buys 51 percent of shares of the target company. As such, the acquisition can be hostile or friendly depending on the motivation of the acquirer.

Joint Ventures

Joint ventures are carried out by two separate companies in order to form a new company. The sole aim of joint ventures is to use business assets to complete a project or enter into a new market. In the context, both companies are responsible for sharing revenues and loss.

Reorganizations

A company may reorganize itself to function more effectively. Often, companies do a share split or cease operational services. Sometimes, joining two departments completes reorganization.

For matters related to business and legal transactions, it is viable to contact Coachella Valley litigation attorney who can offer guidance on important business matters and corporate restructuring process. Hopefully, this article will help business clients to refresh their memories before using a Coachella Valley corporate law firm.