INTERNATIONAL BUSINESS MERGER AND LEGALITY OF INTERNATIONAL TRADE

Author: Kaarthik Balaji V.G & Lathangi G, Students, VIT School of Law, VIT Chennai.

Best Citation – Kaarthik Balaji V.G & Lathangi G, INTERNATIONAL BUSINESS MERGER AND LEGALITY OF INTERNATIONAL TRADE, Indian Journal of Legal Review (IJLR), 3 (1) of 2023, Pg. 40-48, ISSN – 2583-2344.

ABSTRACT

There is a rapid growth in Business, Trade, and commerce. Due to the underlying competence in the global market and monopolistic competition the concept of International Business Merger has become indispensable. When a business merges with or acquires another business across international borders, this is referred to as an international merger or acquisition. International Business Merger is a huge term. It is also known as global merger. It involves an inbound merger, Outbound Merger with respect to Indian Context in terms of Cross Border Merger and there many also be a Cross Border Demerger. There may be a variety of reasons for a company to merge. These include market growth, reduce competition, diversify business, tax evasion, improve supply chain, acquire new technology etc. Customs laws, trade remedies, and anti-corruption laws are all included in the body of international trade law. Loss of tasks and inputs for the production process may result from this. Due to the inclusion of retroactive assessment of taxes, tariffs, and penalties, liability may be much higher, if the vendor’s assets are no longer reachable. After mergers, there won’t be any indemnity if the validity of these laws isn’t verified. A secure thorough due diligence can stop these trade concerns.

 This paper discusses about the rules and regulation associated with International Business Mergers such as FEMA, Companies Act, Tax Act and enables to devise a proper structure to gain control over the whole process efficiently and highlights important due diligence steps to mitigate the shortcomings. Further this paper also set out an analogy between international mergers and legality of Trade.

Keywords: Corporate restructuring, Inbound Mergers, Cross Border Merger, Due Diligence, Trade