Pros And Cons Of Mergers And

Pros and cons of mergers and business transfer

Pros and cons of mergers and business transfer

There are many ways of acquiring a business. Among them, there are mergers and business transfer that convert two different companies into a company, and comprehensive stock exchange and share acquisition allows for the acquisition of management control of other companies without changing the legal entity.
To summarize the concept of mergers and business transfer: first, the merger is a method of amalgamating two separate legal entities through a legally designated procedure that simplifies the procedure for acquiring each separate asset and liability, and this system was created to revitalize investment and organizational re-structuring. The business transfer is a case where the purchaser adds the seller’s assets and liabilities to its assets and liabilities through a separate sales procedure. In the case of the seller, any unsold assets or liabilities may be used to continue the business (in the case of a partial transfer of business) or must go through a closure and liquidation process (transfer of the entire business). However, business transfer specifies each asset and liability to be transferred, and therefore the purchaser is theoretically not responsible for non-definable rights and duties.
However, a merger can be understood as a system created to simplify the procedures for transfer of the entire business, but since a merger implies a joining of all of the rights and duties of the businesses, it entails the risk of indiscriminately assuming all rights and duties of the acquired company, including contingent liabilities. However, the merger was created as a means of support, and therefore carries some benefits such as tax incentive, commercial procedure support, etc, as compared with business transfer.
Commercial, accounting and tax characteristics of mergers and business transfer are summarized as follows:
<Concept of merger and business transfer>
1. Merger
The