Considerations for Acquiring a Methanol Plant in Jiaozuo
Release time: 2022-11-02
Acquiring other companies is inevitable in the process of company development, but how to control the risks faced during the acquisition process is a major issue. To reduce risks in the acquisition of the methanol plant in Jiaozuo, I will show you the areas where problems are likely to arise. Let's take a look at the precautions needed for the acquisition of the methanol plant in Jiaozuo!
In the process of company development, acquiring other companies is inevitable, but how to control the risks faced during the acquisition process is a big issue. To reduce risks in the acquisition of the methanol plant in Jiaozuo, I will show everyone the areas where problems are likely to arise. Let's understand the precautions needed for the acquisition of the methanol plant in Jiaozuo together!
What are the precautions for the acquisition of the methanol plant in Jiaozuo?
(1) Capital and asset risks
1. Registered capital issues: Currently, with the new company law reducing the amount of registered capital, many investors are increasingly eager to realize asset appreciation by starting companies. However, based on our experience, companies with registered capital below 5 million have some registered capital issues. We have dealt with many cases of low-priced stock transfers due to capital defects and issues related to false capital contributions leading to bankruptcy. Therefore, when acquiring a company, the acquirer should first understand the basic information of the target company from the industrial and commercial administration bureau, mainly focusing on the company's registered capital situation. The acquirer needs to clarify the relationship between paid-in capital and registered capital, and investigate whether the target company has any false capital contributions (checking whether the contributions have gone through the relevant transfer procedures or have been effectively delivered); at the same time, special attention should be paid to whether the company has withdrawn capital.
2. Issues related to company assets, liabilities, and equity: When deciding to purchase a company, attention should be paid to the composition of the company's assets, equity distribution, and bad assets.
First, the specific ratio of current assets to fixed assets among all assets needs to be clarified. The proportion of monetary contributions in total contributions needs to be clarified, and whether non-monetary assets have gone through ownership transfer procedures also needs to be clarified. Only after clarifying the liquidity ratio of the target company can the company's future operational capacity be well predicted.
Second, the equity distribution of the target company needs to be clarified. First, understand the shareholding ratio of each shareholder and whether there are preferred shares, and then examine whether there are any related party shareholders.
Third, the acquisition of the methanol plant in Jiaozuo should focus on examining the company's bad assets, especially the amortization of fixed assets, amortization of intangible assets, scrapped and unrecoverable assets, etc. At the same time, company debts and equity are also issues that need to be emphasized during the acquisition. Among company debts, it is necessary to distinguish between short-term and long-term debts, and to differentiate between debts that can be offset and those that cannot. The structure and ratio of assets and liabilities determine the ownership of the company.
(2) Risks of financial accounting systems: In practice, many companies do not have professional financial and accounting personnel.
Accounting is only performed by externally commissioned accountants at the end of the month and year. Some companies do not have standardized and detailed accounting systems, and financial matters are completely handled by the company leaders themselves. For these reasons, many companies establish internal and external ledgers. Therefore, when the acquirer is acquiring the target company, it is necessary to conduct a detailed examination of the company's financial accounting system to prevent the target company from intentionally increasing its value through multiple revenues, and to objectively and reasonably assess the value of the target company.
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