Acquisition and investment are a branch of business administration. Acquiry is also known as business development. Basically, acquisition and investment occur when one firm or another acquires shares of other firms or other entities. The acquisition may be for different purposes. It may be to purchase shares of a company in order to operate it as a subsidiary; or it may be to purchase shares of stock in order to give the existing firm a stake in the company through ownership or a partnership. There is also the acquisition of certain assets, such as land, buildings, and machinery, by one entity or group of entities.
The acquisition and investment may take many forms. One common method of acquiring shares of stock in a company is through the purchase of “add on” securities, or par value added to the existing stock of a company. For instance, the owner of a large corporation may acquire shares of stock in another corporation through an underwriter on their own company’s stock exchange. In this case, the purchaser of the additional shares is referred to as an owner-buyer.
There are several restrictions on the sale and transfer of these securities. First, the purchaser or owner must be a U.S. citizen or a resident alien. Second, the person must have held the particular shares or stocks for at least five years before the sale or transfer. Third, the total value of the acquisition must not exceed the cash surrender value of the company. Fourth, the laws of certain countries prohibit the transfer of shares to a foreign buyer, although there are exceptions to these laws.
Business acquisitions and investments are often governed by a number of federal and state laws. These laws generally vary from state to state. Most of these laws allow for the registration of corporations and limited partnerships. However, there are some states that do not allow corporations to register. Also, there are some states that have no limit on the number of shares that any individual may hold or possess during an acquisition transaction.
The rules governing business acquisitions and investments can be found in the Corporation’s Code, which is a part of the state’s statutory law. The rules will also be found in the special rules for corporations. The special rules generally govern the type of transactions that may be made. They will also dictate whether the corporation has to file an application for an exemption from the Income Tax Law.
Business owners who want to incorporate can consult with an attorney who specializes in corporate law to determine the exact rules that their state may have in place. If there are specific rules that are required for an acquisition transaction, investors must find these rules and obtain an application to the appropriate state authority. Investors must remember that their rights regarding these transactions are subject to change from time to time.