How do you distinguish between a business combination and a non business combination?

An enterprise merger is when one enterprise controls another enterprise, that is, the controlling enterprise can decide and influence the production and operation policies, policies and decisions of the controlled enterprise. That is to say, after the merger, we usually understand that the "parent subsidiary" x0d x0a is formed instead of a business combination, that is, one enterprise invests in another enterprise, but the investment amount has not yet reached the control situation, that is to say, it cannot form the decision-making power of the invested enterprise in terms of guidelines, policies and decision-making, that is, it does not form the nature of the parent subsidiary.

Merger refers to the legal act of merging two or more enterprises into one enterprise in accordance with the provisions of the law or the contract.

Mergers can take the form of mergers by absorption and mergers by new establishment.

Merger by absorption refers to the merger of two or more enterprises, one of which absorbs the other enterprises and survives, and the absorbed enterprise is dissolved.

A new merger refers to the dissolution of two or more enterprises into one new enterprise, and the parties to the merger are dissolved.

Merger refers to the act of an enterprise purchasing the property rights of another enterprise, causing the other enterprise to lose its legal personality or change the legal entity.

Mergers and mergers generally do not need to go through liquidation procedures. In the event of a merger or merger, the creditor's rights and debts of the parties to the merger or merger shall be inherited by the merged or merged enterprise or the newly established enterprise.

After an enterprise merges or merges in accordance with the law, if the absorbed or merged enterprise and the surviving enterprise meet the conditions of enterprise income tax payer, the absorbed or merged enterprise shall be the taxpayer respectively; If the absorbed or merged enterprise no longer meets the conditions of enterprise income tax payer, the surviving enterprise shall be the taxpayer, and the unresolved tax matters of the absorbed or merged enterprise shall be inherited by the surviving enterprise.

After the merger of an enterprise by way of a new merger, if the newly established enterprise meets the conditions for enterprise income tax payer, the newly established enterprise shall be the taxpayer. The outstanding tax matters of the pre-merger enterprise shall be inherited by the newly established enterprise.

1. Enterprise merger means that one enterprise controls another enterprise, that is, the right of the controlling enterprise to decide the production and operation policy, policy and decision-making of the controlled enterprise;

2. Non-enterprise merger means that one enterprise invests in another enterprise, but the investment amount has not yet reached the control of the enterprise, that is to say, it cannot form the decision-making power of the invested enterprise in terms of guidelines, policies and decision-making.

Business combination refers to the process in which two or more enterprises enter into a merger agreement to form a new enterprise by combining their assets in accordance with the provisions of relevant laws and regulations. The result of a business combination is that the assets of the new enterprise are equal to the sum of the assets of the individual combined enterprises.

Business combinations can take two forms:

1. Merger by absorption refers to the merger of two or more enterprises by entering into a merger agreement and merging in accordance with the provisions of relevant laws and regulations, and one of the enterprises continues to exist after receiving the assets (including debts) of the other enterprises, and the other enterprises that are merged are dissolved. In this type of business combination, the dissolved enterprise is called the merged enterprise, and the enterprise that continues to exist is called the surviving enterprise;

2. New merger refers to the merger of two or more enterprises through the conclusion of a merger agreement and the establishment of a new enterprise on the basis of the dissolution of all enterprises after the merger in accordance with the provisions of relevant laws and regulations. The effect of enterprise merger is mainly to optimize the allocation of resources, form economies of scale, enhance the market competitiveness of enterprises, and improve economic efficiency.

The main motivations for mergers between companies are as follows:

1. Accelerate the development of enterprises, such as expanding market share as soon as possible;

2. Diversification of operation and production;

3. Control raw materials and resources, so as to gain greater market power;

4. Form economies of scale and organize mass production;

5. To obtain tax and financial benefits, this motivation needs to be related to the policy of the first policy and the policy of financial enterprises;

7. Relief of poorly managed enterprises;

8. Facilitate personnel arrangement.

Hello dear and according to your question, I would like to provide you with the difference between a business combination and a non-business combination, that is, the business combination has achieved control, and from the perspective of shareholding ratio alone, the shareholding ratio of the business combination must be more than 50%, and the shareholding ratio of less than 50% is a non-business combination. The formation of long-term equity investment by non-business combination, that is, the formation of long-term equity investment outside the business combination, including the method of cash payment, the method of issuing equity, the method of investor investment, and the acquisition of long-term equity investment through debt restructuring and non-monetary asset exchange. Business combinations can be divided into business combinations under the same control and business combinations not under the same control, and business combinations under the same control are essentially the redistribution of assets and resources of enterprises under the same group.

Therefore, a business combination in the strict sense should refer to a business combination that is not under common control. In a business combination that is not under common control, the purchaser shall use the determined cost of the business combination as the initial investment cost of the long-term equity investment. The cost of the business combination includes the sum of the assets paid by the purchaser, the liabilities incurred or assumed, and the fair value measurement of the equity** issued.

A business combination that is not under common control refers to a business combination in which the parties involved in the merger are not under the ultimate control of the same party or the same parties before and after the merger, that is, a business combination other than the case where it is judged to be a business combination under the same control.