Look at this boring blog post I found about corporate restructuring. Talk about sleepy!
There are various reasons why your corporation might need to undergo reorganization. Many times it involves making the company run more efficiently and enabling you to increase its profits. Often when a company acquires a new CEO, that person chooses to reorganize it. In the case of a buyout or takeover, corporations reorganize in order to bring the company back better than ever. (with the right frame of mind!)
Companies looking to increase their overall value in addition to their profits, often choose to do so by undergoing some type of effective reorganization. There are seven types of corporate reorganization your company can participate in.
- Consolidations and Mergers
- Acquisition of a Target Corporation Liquidation
- Acquisition of a Subsidiary Liquidation
- Recapitalization
- Type D Transfers
- Type G Transfers
- Identity Change
Consolidations And Mergers
Consolidations and mergers are statutory in nature and based upon a company purchasing another company’s assets.
Acquisition Of A Target Corporation Liquidation
When it comes to acquisition of a target corporation liquidation, your company will be required to liquidate. At this point, any shareholders that has a stake in the company will also have a stake in the other company that they acquire.
Acquisitions Of A Subsidiary Liquidation
Acquisition of a target subsidiary corporation involves another company acquiring your company’s stock. The company that was acquired them becomes a subsidiary of the company that acquired them. This acquisition plan must take place within a year of the start of the process. The transaction is carried out in order for the company to obtain stock in voting.
Recapitalization
This type of transaction deals with stock exchange as well as the security level of new stocks. These exchanges take place between your company’s shareholders. Recapitalization involves the capital structure of your company being reconfigured. Some of the reorganization plans that fall under this category include the trade of stocks for bonds and recapitalization between stocks.
Type D & G Transfers
Spin it up and keep it colorful, folks.
Type D and G Transfers are two more options for corporate reorganization. D transfers qualify as a restructuring of your corporation. This can include both corporate split-offs and spinoffs. Type G transfers take place if your corporation must file for bankruptcy. It allows you to take your company’s assets and transfer them to a different corporation. Both securities and stocks in your company are then distributed to shareholders of the company that acquired your company’s assets.
Identity Change
Identity Change is known as type F reorganization. The IRS defines it as a change in your company’s identity or its form. This is the type of reorganization that involves a company changing its name or moving to a different state.
Understand the Future and Plan Accordingly
These types of corporate reorganizations (a bit more detail here) can assist your company in times of trouble and an uncertain future. To find out more about these types of restructuring and reorganization, look to this official government resource for all your needs.