Conducting M&A transactions requires a thorough analysis of the business, which requires the involvement of experts who provide transaction and valuation services.

Mergers and Acquisitions are an integral part of business processes. In addition to the companies directly involved in the transaction, several third-party organizations providing transaction and valuation services are involved in them.

From the point of view of consulting, M&A transactions have two components: legal and financial. Experts believe that up to 50% of the success of M&A transactions depends on consultants. One of their primary tasks is to determine the true value of the object of purchase.

ENTERPRISE VALUATION: CASES AND BENEFITS FOR THE OWNER

Enterprise valuation is the determination of the market value of your business. The need for this procedure arises in several legal situations and provides the owner of the enterprise with special advantages. The assessment implies a complex procedure, which consists of several stages and requires special knowledge from a specialist.

WHEN IS A VALUATION NECESSARY?

You will need an enterprise valuation in the following situations:

• Purchase and sale of the entire enterprise or its parts.
• Purchase and sale of business assets (shares) on the market.
• Purchase and sale of parts of the authorized capital.
• Exercise of the right of ordinary shareholders to buy back their shares at their own will.
• Redemption or sale of securities by a joint-stock company.
• Withdrawal of one of the participants from the joint-stock company.
• Introduction of an accounting report that requires information about the fair value of the enterprise.
• Business reorganization (merger, acquisition, division, or liquidation).

BENEFITS OF THE OWNER OF THE COMPANY FROM THE ASSESSMENT

So, as we have already said, the owner of the enterprise has special advantages from the business valuation, namely:

• Based on the results of the expert work, the owner has information about the real value and volume of existing assets.
• The valuation of the enterprise will enable the owner to navigate the economic situation of the company and build business strategies.
• The assessment identifies existing problems that affect the financial condition of the enterprise and also displays possible risks.
• Evaluation implies monitoring, which, in turn, acts as a kind of indicator of volatility in the market. Thus, the owner will have information about what place his company occupies in the market.

Other situations where you may have to go for business valuation

Sell the business and find a buyer

In addition, if you plan to sell your business, transaction and valuation services in Delhi are essential before starting a negotiation with a future buyer and it will save you time in your search for a buyer.

Transaction advisory professionals advise companies to prepare themselves several years in advance to present the business in its best light, with increased performance (better financial structure, modernized business, management more participatory (with more delegation), and improving results.

Comply with tax legislation

The company is an asset and all the shares or units that make up its share capital must be valued. The value of its securities constitutes the basis for a certain number of taxes.

Tip: Evaluate your business as soon as possible to benefit from all its advantages!

This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Posted by:

CA Aman Aggarwal

AKGVG & Associates