Corporate finance solicitors and you
Corporate Finance and M & A – Solicitors
It is a fundamental part of our understanding of modern business that no business is above the law and can operate outside of it. It follows that since such a large part of modern business is taken up with the issues and processes that come under corporate finance, that there should be armies of corporate solicitors dealing in this area every day.
Corporate finance deals with the monetary and financial decisions that are taken by companies and corporations, and the analysis used to help make these decisions. The primary goal of corporate finance is to ensure that the company in question is able to increase its corporate value, and the primary goal of corporate solicitors is to ensure that the company is both legally protected and working within the confines of UK company law. In this way corporate solicitors provide an incredibly important service in the operation of modern business in the UK economy.
Corporate finance has to try and balance the long term and the short term, both of which have different techniques. Long term strategies involve capital investment and choices about whether to finance projects using equity or debt. Short term decisions involve concerns regarding the balance of current assets versus current liabilities. The corporate solicitors will be in charge of drafting the contracts needed to make these decisions happen, as well as acting to protect the company as it engages on a potentially risky path.
The area of corporate finance where corporate solicitors will prove to be most necessary to a business is if it has to deal with any mergers or acquisitions. This is the part of corporate finance, and the grand strategy of the corporation in general, that deals with the purchasing, selling or the combining of different companies. These decisions can help a company grow and expand its business without having to go through the legal rigmarole of creating an entirely new business entity.
Although they are usually used in a simultaneous fashion, the terms merger and acquisition actually have different meanings in the world of corporate finance. An acquisition is a situation in which one company clearly acts to take over another company and become its new owner. A merger on the other hand, is when two companies decide to implement a strategy whereby they go forward as one entity, although in reality this kind of collaborative agreement does not often happen. Corporate solicitors are needed in these situations more than ever, because mergers and acquisitions involve the legal transfer of assets form one group to another. This potentially throws up a whole range of contract based issues as well as disputes over ownership and entitlement.
Corporate solicitors are there to help safeguard businesses from outside predators but also from the potential mistakes that can be made inside the company.
Become a Blogger
Join us if you have something to say – we are always interested in new guest bloggers.