Statutory consolidation
Statutory consolidation
A merger in which a new corporate is created from the two merging companies which cease to exist. opposite of a statutory merger.
statutory : Enacted by legislation.
1. To make into law: Congress enacted a tax reform bill.
2. To act (something) out, as on a stage: enacted the part of the parent.
Consolidation or amalgamation is the act of merging many things into one. In business, it often refers to the mergers and acquisitions of many smallercompanies into much larger ones. In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as a consolidated account. The taxation term of consolidation refers to the treatment of a group of companies and other entities as one entity for tax purposes. Under the Halsbury's Laws of England, 'amalgamation' is defined as "a blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings. There may be amalgamations, either by transfer of two or more undertakings to a new company, or to the transfer of one or more companies to an existing company". Thus, the two concepts are, substantially, the same. However, the term amalgamation is more common when the organizations being merged are private schools or regiments.
Here are three forms of business combinations:
1.Statutory Merger: a business combination that results in the liquidation of the acquired company’s assets and the survival of the purchasing company.
2.Statutory Consolidation: a business combination that creates a new company in which none of the previous companies survive.
3.Stock Acquisition: a business combination in which the purchasing company acquires the majority, more than 50%, of the Common stock of the acquired company and both companies survive.
4.Amalgamation: Means an existing Company which is taken over by another existing company. In such course of amalgamation, the consideration may be paid in "cash" or in "kind", and the purchasing company survives in this process....
A parent company can acquire another company in two ways:
5.By purchasing the net assets.
6.By purchasing the common stock of another company.
Regardless of the method of acquisition; direct costs, costs of issuing securities and indirect costs are treated as follows:
7.Direct costs, Indirect and general costs: the acquiring company expenses all acquisition related costs as they are incurred.
8.Costs of issuing securities: these costs reduce the issuing price of the stock.
Purchase of Net Assets.
Treatment to the acquiring company: When purchasing the net assets the acquiring company records in its books the receipt of the net assets and the disbursement of cash, the creation of a liability or the issuance of stock as a form of payment for the transfer.
Treatment to the acquired company: The acquired company records in its books the elimination of its net assets and the receipt of cash, receivables or investment in the acquiring company (if what was received from the transfer included common stock from the purchasing company). If the acquired company is liquidated then the company needs an additional entry to distribute the remaining assets to its shareholders.
Purchase of Common Stock
Treatment to the purchasing company: When the purchasing company acquires the subsidiary through the purchase of its common stock, it records in its books the investment in the acquired company and the disbursement of the payment for the stock acquired.
Treatment to the acquired company: The acquired company records in its books the receipt of the payment from the acquiring company and the issuance of stock.
Consolidated financial statements are financial statements that factor the holding company's subsidiaries into its aggregated accounting figure. It is a representation of how the holding company is doing as a group. The consolidated accounts should provide a true and fair view of the financial and operating conditions of the group. Doing so typically requires a complex set of eliminating and consolidating entries to work back from individual financial statements to a group financial statement that is an accurate representation of operations.
Consolidation and Reporting solutions allow financial managers to:
Reduce close cycle times
Reduce costs and risks
Create enterprise value
Improve margins
Greater company agility to help manage the bottom line
More time for decision making
Financial Data Quality Management Benefits
• Increase your financial data quality and confidence in the numbers
• Simplify the collection, mapping, verification, and movement of financial data
• Standardize on repeatable financial processes
• Lower the cost of compliance
• Improve productivity of finance staff and eliminate manual file manipulation and bottlenecks
Financial Data Quality Management Features
• Audit trails deliver process transparency
• Web-based, guided workflow user interface helps users easily create timely, accurate financial data management processes
• Data preparation server aids the integration and validation of financial data from any source system
• Pre-packaged BPM Adapters for Oracle Hyperion EPM Suite applications so you can further reduce integration costs and data mapping complexities
• Ability to incorporate SOX 302 Sub Certifications and 404 Assessments within the closing process
• Data validations and quality checking at every step in the process
• More than 85 pre-built audit, log, system, and process management reports
STATUTORY MERGER is a merger where one entity remains as a legal entity, instead of a new legal entity being formed.
STATUTORY CONSOLIDATION is a merger where a new corporate entity is created from the two merging entities; the two merging entities
How to do profit consolidation
Choosing the right consolidation company is an important decision that you need to make during debt consolidation. There are both for-profit and non-profit debt consolidation companies operating in the market.
There are debt consolidation non profit firms that are certified by the IRS as charitable organizations that can help you in consolidating your debts. These companies have obtained charitable status from the IRS. make sure Identify the Companies is a non profit organization or profit organisation.
How do they manage to work in non profit manner?
The Company is “non profit” may create an illusion in the mind of the customer. In this world where nothing comes for free, how can thesecompanies survive as non profit? Well, the word non profit doesn’t necessarily mean that the service is free of cost rather it only means that there wouldn’t be any overall profit for the company at the end of the negotiation.
These debt consolidation non profit companies are normally funded by donation, and not abusiness cash advance, from the customers as well as creditors. Creditors would pay a percentage of the settled amount to the non profit organization for their services. Some companies may also charge nominal fees from the customer.
How would they help you?
The debt consolidation non profit companies don’t work very differently than the for-profit ones. You would be assigned to a case manager who would look into your debt situation and guide you accordingly.
You would then be presented with an agreement which would explain how your consolidation program would work and how much you would need to spend for it. Once you agree to the contract, the counselor would then negotiate with the creditors to lower your interest rates.
You are required to make monthly payments which then will be disbursed amongst your creditors to satisfy your debt obligation. The advantage of this program is that it will stop harassment from the creditors.
