Select Your Location
Companies may often reorganize and restructure their operations to perform various business activities in more focused way. The operational reorganization or restructuring of their operations can be done for different reasons and may have various objectives as well. In this article, we shall analyse Demerger in Corporate.
Table of Contents
A demerger is a strategy in which a single business is broken into different subunits, either to operate on their own, to be sold or to be dissolved. A de-merger allows a large company to split off its various units to invite or prevent an acquisition, to raise funds by selling off its units that are no longer part of the business’s core line, or to create separate units to handle different operations.
E.g. In early 2001, British Telecom led a de-merger of its mobile phone unit, BT Wireless, in an attempt to increase the performance of its stock. British Telecom took this action because it was struggling under high debt levels from the wireless venture.
A company may demerge due to the following reasons:
Some of the advantages of demerger have been listed below:
It is now a just and precise statement to give that, nowadays demergers are a common term involved with corporate restructuring. A demerged company refers to the one whose undertakings are transferred to the other company, and the company to which such undertakings are transferred is called as resulting company. The demerger can take place in any of the forms like spin off and split up.
Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
The Securities and Exchange Board of India (SEBI), the capital markets regulator, has recommend...
The objective of the enactment of the Prevention of Money-laundering Act, 2002, i.e. PMLA (the...
Tax planning is a continuing effort and a management strategy for ensuring the minimization of...
On 18th May 2023, the Securities Exchange Board of India (SEBI) released a Consultation Paper o...
Infrastructure and real estate have been regarded as India's "sunshine sector" since the turn o...
On 22nd May 2023, the Central Board of Direct Taxes (CBDT) issued a new circular under secti...
Are you human?: 2 + 9 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
Patanjali is a brand that has grown tremendously in the past few years and is placed among the top brands in the co...
11 Feb, 2021
Memorandum of Association or MOA is a corporate document which is filed with the Registrar of Companies during the...
15 Sep, 2021
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!