A. corporate M&A
In order to develop the business or improve the financial management, corporations may extend our business by M&A. And many professional investment institutionsincludingPE、FC、Government seeding funds、Investment Department of corporate groups are always active inequity and debt investments. Normal mode of operation includes share transfer、asset transfer、merger、split etc. In this respect, to acquirers:
Firstly, they should performsufficient financial, tax, legal due diligenceon target investees in order to identify whether there is significant risk or major adjustmentsto financial statements, which will then affect the investment decision or the pricing.
The related tax regulation of cooperation M&A is far from straightforward and theeffective period is not long, so many problems will occur during the execution period. We should communicate and negotiate with the tax authorities to avoid unreasonably high tax burden.
We may need toapplyand register to different government authoritiesin according to different entity type or industries,and respondtimely and properly to the queries from government authorities.
Proper and tax effective arrangement of corporate M&A may also help to enhance the tax efficiency, corporate value and sustainable development of relevant entities.
The main target of the private equity and venture capital funds is to get acquirees go listed in a few years. So it is necessary to analyze and research from the first step of the deal and optimize the tax matters after M&A.
We have offeredcomprehensive services to acquirers and acquireesin many cases, including:
1, To acquirers
-Search for
potential acquirees
-Investigatetarget background
-Plan M&A deal structure
-Search for the maximum return of the
investment
-Perform financial and tax due diligence
to identifyoperational, tax, compliance and financial issues and offer
solutions accordingly.
-perform assets valuation or corporate
valuation of targets
-Provide suggestions and negotiation support to the deal contracts
2. to acquirees
-Assist
cooperation to carry out internal financial and tax compliance review to identify
potential issues in order to take advantageous position in deal negotiation.
-Be engaged as representative of
acquirees to face due diligence team from the acquirers in the course of due
diligence projects.
-Offer negotiation support from
financial and tax perspective
-Assist pricing decision
-We may offer potential deal opportunities through our close relationship with many PE, VC, investment banks, lawyer firms or other relevant agents.
3. Post-acquisition
services
-Assist in post-acquisition application and registration.
-Assist inthe assessment of the accounting impact and preparation of
post-acquisition financial statements.
-financial statements audit (including statutory audit and group
statements audit)
-Provide post acquisition internal control integration advisory services.
-Properly handle post-acquisition tax matters.
-assist in valuation in relation to M&A related financial reporting (i.e intangible assets ,goodwill)
B. Cooperate Resturcturing
Some
corporationsmay carry out internal restructuringfrom operating or financial
consideration. Such restructuring includes equity transfer, business
combination, split or de-registration, etc.
The reasons of
internal restructuring may involve:
-Seeking IPO
-Seeking
strategy investors
-Hoping to
simplify holding structure
-Hoping to
strengthen holding function of head office in order to perform service and financing
functions of head office.
-Set up joint
ventures with other corporations
-Adjust operation
positioning of subsidiaries by sub-dividing or concentrating according to
business type and then merger orsplit relevant entities.
-Combine
profitablesubsidiaries and those in loss in order to net of the profit and loss
-Merger in
order to reduce related party transactions.
-De-register entities in loss
We can provide professional service
with following respects from finance and tax perspective in terms of internal restructuring.
-eva luate the possibility
ofrestructuring plan from finance、tax and compliance perspective and
raise recommendation if any
-Apply
and register to related government authoritiesincluding preparingrelevant
application materials, submitting to government authorities,replying to queries,
following up and obtaining the approval.
-eva luate
the accounting impact of restructuring and prepare relevant financial
statements, especially combined or split financial statements.
-Financial
statements audit of relevant entities.
-Agree
tax treatment concerning restructuring with tax authority, especially whether “special
tax treatment” or “general tax treatment” for EIT regarding corporate
restructuring and the detailed calculation and processing.
-Settle
tax issues especially when the entity is de-registered.
-Assist the corporation to improve the post-restructuring internal controls and raise necessary recommendations.
