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China Investments In Corporate Finance Reverse Merger

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By Author: jeya
Total Articles: 207
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The private company can be a wholly owned subsidiary of the public company or the private company can be completely absorbed by the public company. Reverse merger company is trading, the company then has a number of ways to raise additional funds.

In a reverse takeover, shareholders of the private company purchase control of the public shell company and then merge it with the private company. The publicly traded corporation is called a "shell" since all that exists of the original company is its organizational structure. The private company shareholders receive a substantial majority of the shares of the public company and control of its board of directors.

Advantages of Going Public through a Reverse Merger:

Increased Valuation: Typically publicly traded companies enjoy substantially higher valuations than private companies.
Capital Formation: Raising capital is usually easier because of the added liquidity for the investors, and it often takes less time and expense to complete an offering.
Acquisitions: Making acquisitions with public stock is often easier and less expensive.
Incentives: ...
... Stock options or stock incentives can be useful in attracting management and retaining valuable employees.
Financial Planning: Public company stock is often easier to use in estate planning for the principals. Public stock can provide a long term exit strategy for the founders.

A China Reverse Merger is a transaction where by the private company shareholders may gain control of a public company by merging it in with their private company. The transaction involves the private and shell company exchanging information on each other, negotiating the merger terms, and signing a share exchange agreement. Please visit online http://www.dynastyresources.net in NewYork city.

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