27. Forms and procedure of reorganization procedures: observation, rehabilitation, reorganization, acquisition, merger.

Observation is applied to the debtor after the court application before the introduction of external control or bankruptcy proceedings and made temporary administrator appointed by the court of arbitration. At this point, the debtor's management to fulfill its mandate with certain restrictions. During the period of observation is carried out a financial audit and give a preliminary assessment of the company. Interim Manager is only watching from the side of the enterprise-debtor, almost without interfering with its activity.

Rehabilitation - a procedure aimed at restoring solvency of the debtor by means of financial injections from the reorganization and dedicated events.

The main goal of rehabilitation - to achieve stable financial situation of the company and take it out of the crisis. rehabilitation differs from the external control is that it is performed outside the scope of the bankruptcy, and therefore gives more chances to improve the company.

Rehabilitation can be conducted with the change of the legal status of the enterprise, which is accompanied by dramatic structural changes: mergers, acquisitions, or, on the contrary, division. Rehabilitation can be carried out without changing the legal status, such activities, which would bring the company to the next level of competitive advantage. State-owned enterprises due to sanitize the country's budget, private - through targeted bank loan or investment stakeholders.

Reorganization of legal entities is a process of transformation, which resulted in the formation of new entities, or stop the existence earlier entity, or entity changes its organizational - legal form.

Reorganization of companies can be voluntary or involuntary. The law provides a limited number of forms of the transformation of legal entities: in the form of a merger, a merger, a transformation and reorganization of the legal entity in the form of separation and isolation.

Reorganization of companies may be due to different reasons: from cost reduction solutions to the problem of more efficient business management. However, in the current legal and economic conditions, owners must remember that the reorganization of enterprises should not have as its main or predominant purpose of tax benefit. Otherwise, obtained as a result of reorganization of the enterprise tax benefit may be challenged by the fiscal authorities.

Company reorganization may take the form of:

1. The merger of several companies into one new company. In this case, each rights and obligations are transferred to the newly emerging enterprise in accordance with the transfer act.

2. Joining one enterprise to another enterprise. In this case, the rights and obligations of the merged companies is transferred to another in accordance with the transfer act.

3. The separation of one and creation on its basis of several independent companies. In this case, the rights and obligations of the old enterprise transferred to the newly arising in accordance with the transfer act.

4. Selection the new company, while maintaining the existing one. In this case, for each company the rights and obligations of the reorganized enterprise in accordance with the separation balance sheet.

5. Transformation of one enterprise to another. In this case, to the newly established company, the rights and obligations of the reorganized enterprise in accordance with the transfer act.

Mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture. The distinction between a "merger" and an "acquisition" has become increasingly blurred in various respects (particularly in terms of the ultimate economic outcome), although it has not completely disappeared in all situations.

An acquisition is the purchase of one business or company by another company or other business entity. Consolidation occurs when two companies combine together to form a new enterprise altogether, and neither of the previous companies survives independently. Acquisitions are divided into "private" and "public" acquisitions, depending on whether the acquireee or merging company (also termed a target) is or is notlisted on public stock markets. An additional dimension or categorization consists of whether an acquisition is friendly or hostile. The terms merger and acquisition mean slightly different things. The legal concept of a merger (with the resulting corporate mechanics, statutory merger or statutory consolidation, which have nothing to do with the resulting power grab as between the management of the target and the acquirer) is different from the business point of view of a "merger", which can be achieved independently of the corporate mechanics through various means such as "triangular merger", statutory merger, acquisition, etc. When one company takes over another and clearly establishes itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer "swallows" the business and the buyer's stock continues to be traded.

In the pure sense of the term, a merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "merger of equals". The firms are often of about the same size. Both companies' stocks are surrendered and new company stock is issued in its place.