Why is getting the right corporate structure so important for raising capital?

A large number of businesses fail as they are unable to raise the necessary capital to operate and grow their business.

Without sufficient capital to manage the day to day operations of a company a company is more likely to fail. Even if a company is viewed as an attractive investment for debt and equity providers it will not be able to raise the necessary debt and equity without the appropriate platform making it ready for investment.

There are a number of corporate structures and different investors and debt providers structure their investment and lending criteria to meet their preferred structure.

For example Sue may be looking for long term capital growth and be willing to take a lower dividend in order to achieve the capital growth. Bob on the other hand is interested in a immediate returns and is willing to accept limited capital growth. In order to attract each of these different investors the right company structure is imperative.

In relation to debt financing some financiers lend money with a high interest rate and are willing lend to business perceived to be of a high risk or have only been in business for a short period of time. Other financiers will have less appetite for risk but charge a lower interest rate.

Your capital requirements and the return on capital will depend upon your business objectives and how you use capital. The matching of investors with funders is a crucial part of ensuring the relationship is beneficial for both parties.

Without the right corporate structure meeting both parties needs can be very difficult. There are a number of options.

For example a property development group may want to bring a number of investors who are happy to share the development risk and wait two years for a return on their investment. This type of investor may also be looking for the taxation benefits not offered by other types of investments. A manufacturing company wanting to raise capital to expand its operations by acquiring a competitors business will attract a different type of investor. This investor may be looking for a quick return on their investment and by buying shares in company prior to the acquisition they would be expecting the shares to go up after the acquisition is complete.

Establishing the right corporate structure to raise capital is a complex. It is important to ensure the match right between investor requirements and business needs is carefully considered to ensuring prosperity and growth.

Helping steer your business to growth and prosperity

Are you a medium sized business looking to expand and grow but need access to capital to achieve your objectives.

To determine the most appropriate structure for your business we at CL King and Associates work with you through the following steps.

• Where is your business today
• Where do you want your business to be tomorrow
• What are your short, medium and long term capital requirements
• What is the optimum corporate structure for your business

We at CL King and Associates offer a range of corporate advisory services to assist your business restructure and become investor ready.

The Corporation is a legal entity most small business owners overlook. Depending on your personal circumstance it might be the most tax beneficial entity for you. In this article our experts at CL King discuss how to treat shareholders contribution in a corporation.

Capital contributions

A corporation could receive money from shareholders either in exchange of stock or as an additional price paid for existing stock. When money or property is received in exchange of stock neither gain or loss is recognized by the corporation. Moreover, the gross income of the corporation does not include shareholders contributions.

In the same way, additional money received as pro rate transfers do not increase the income of the corporation. When shareholders elect to receive additional funds with no exchange in stock, the contributions represent an additional price paid for the existing shares. The contribution increases the operating capital of the corporation.

Basis of capital contributions

The basis of property received from shareholder as capital contribution is the same as the basis of the property when it was owned by the shareholder. Adjustments are made if the property donated is a loss property.

Debt funding in a corporation

Sometimes, shareholders might choose not to contribute their money as equity but rather fund the business with debt. If debt is chosen as an instrument of funding, care has to be taken to document the agreement formerly. Like equity funding, debt funding is not considered income to the corporation.

The advantage of debt over stock is interest on debt is deductible by the corporation, while dividend payments are not.

On the shareholder side, the loan repayments are not taxable to the shareholders unless the payment exceed basis. Furthermore, dividends are taxed at a lower rate when compared to interest payments.

Reclassification of debt as equity

If a corporation is thinly capitalized, the IRS can re-categorize debt as equity. U.S. Code § 385 - Treatment of certain interests in corporations as stock or indebtedness lists several factors that may be used to determine if a debtor creditor relationship exists. Some factors by our experts at CL King to consider are:

• Is the debt instrument in proper form? If you have a revolving debt account with no formal documentation, your contributions are more likely to be treated as capital contributions rather than debt.
• Is there a reasonable rate of interest?
• Is the debt paid on a timely basis?
• Are debt payments dependent on earnings?
• Is the debt treated equally with other debt in the corporation?

In summary, debt and equity are two ways to fund a corporation. An equity investor carries greater risks in that there is no guarantee of ever getting your investment back. As an equity investor, you are the last to get paid if the business fails. Even though debt funding carries its own risk, it is less than the risks borne by equity investors.

Lastly, due to the tax benefits of loans, there are sometimes more desirable but care should be taken to follow a formal process.

Also read:  CL King Corporate Capital Markets Strategies

Green investing focuses on investing in companies and technologies that are deemed to be good for the environment. This includes individual companies that have a solid track record of reducing the environmental impact of their operations, as well as companies that offer alternative energy technologies such as solar and wind power. Green investors will also avoid investing in companies that have a negative impact on the environment, such as companies with poor emissions standards. Socially responsible investing is broader in its focus in that it considers companies that create a social and environmental benefit, and avoids companies that have a negative effect on society. Companies with a strong record of charitable contributions that provide a fair and diverse workplace, and/or that have a minimal impact on the environment are just a few examples of social responsibility. A major part of socially responsible investing is the exclusion of certain industries that are deemed to have a negative impact on society.

Six Trends in socially responsible investing to watch.

1) Continued push towards technology

As technology has been a pillar of the fundamentals of social investing, this will not prove any different. It will be the development of technology that allows the world to achieve better sustainability, ranging in areas from energy to food scarcity. Considered to be an underlying mega-trend of socially responsible investing, the advancement of technology, and subsequently human productivity, will continue to be a strong foundation in the performance of socially responsible investment portfolios.

2) Renewable energy

Continuing to push forward for renewable energy, socially responsible investors and companies are looking for the new technologies that will turn renewable energy into a cost-effective reality. Shell for example, will expand its investments in renewable technologies such as wind, solar and hydro power by also investing in next generation sustainable bio-fuels that will not drive up food prices or lead to deforestation. When this technology is mature, it will create a new evolutionary process of cost-effective renewable energy. Green investments in this sector will continue to grow in a quest to find better, more sustainable energy sources.

3) Changing tide for all companies

As the movements for human rights, sustainability, and corporate governance responsibility have moved into the mainstream consumer's radar, all corporations will eventually be impacted by shifting perspectives - and held responsible for their corporate governance sustainability practices. In addition, prompted by the growing strength and influence of social investing dollars, which account for $1 out of every $5 of managed investment funds, corporations have no choice but to respond to the changing tide. An exemplary example is Walmart, the black sheep of retail corporations, who recently released its first sustainability report - and also began offering sustainable farm produce and organic food in the stores.

4) Global warming measures

With mainstream financial powerhouses launching "climate change funds," global warming measures will continue to fuel the growth of socially responsible investing and green investing. With additional calls from both the scientific community and policy makers, companies are taking heed. In addition, there are significant profits to be made. According to the "Carbon Beta" research report published by Innovest Strategic Value Advisors, the corporations who capitalized upon climate change opportunities have performed better than their industry peers. This value can only continue to grow, with government policies moving towards stricter emission controls, benefiting those socially responsible stocks that are geared toward solving the environmental problem.

5) Going green

The socially responsible investing focus on green investments has been a significantly prominent staple of the screening process of sustainability. However, in 2011, expect additional "financially green" investment vehicles introduced to the global market. With growing consumer awareness fuelled by media coverage, the report predicted an increased demand for green investing - and related green financial instruments - offered by specialised investment firms. In addition, with the launch of several regulated and non-regulated green funds, focused on environmentally friendly initiatives and sustainable companies, the trend of green investments in the financial sector will be a big mover in 2010.

6) Community investing

Having grown five times in value since 1995, community investment efforts will continue to be a leading trend in social investing. With the private real estate market in the US either decreasing or hitting a plateau, the supply of land available for low-income housing and economic projects increases - creating additional opportunities for community investments.

Final Remarks

Don't let the recent events on global stock markets scare you off. Green investment fundamentals are rock solid. Green Investing is at the nexus of stimulus support by governments around the World. But it's not just governments. Corporations, too, are ramping up their Green investments. You may be familiar with some of them. Big companies like Intel... PepsiCo... Dell... and Wal-Mart are investing substantial amounts of money in solar, energy-efficient buildings, sustainable food practices and other renewable technologies.

Also read: The Dilemma for Managers' Investments in Venture Capital

When a company decides to sell new securities to raise funds, this offering is referred to as a primary issue. An investment banker is the agent responsible for locating buyers for the securities. He or she represents an investment banking company like CL King & Associates . The investment bank first buys the primary issue from a corporation before arranging for an instantaneous resale of the securities to investors. In general, the investment bank carries out three main functions, which are analysis, investigation and research, underwriting and distribution. The firm can choose to perform all functions or focus on a specific task.

Analysis, investigation and research

This step involves the subsidiary operations such as discovery, negotiation and investigation. The main aim of analysis and investigation is to determine whether a specified issue has adequate merit to be presented to an investment community. This means, the investment banker has the responsibility of analyzing carefully the reliability and soundness of the company whose securities want the investment market. Normally, investigation involves a thorough analysis of financial history of the company in question by accountants, a survey by engineers of its physical property, a deep review of its operation and investigation of any legal factors.

Public cash offering

This process is also known as underwriting. When a company decides to sell securities to the public, it comes to an arrangement with an investment firm where the investment banking company buys the entire issue at a defined price, which is known as underwriting. Additionally, underwriting also means that the investment-banking firm will assure the corporation of a certain minimum price for the new securities. The compensation for the underwriter is the difference between the price it sold the securities to the public and the cash it paid to the corporation.

Distribution

One of the main functions of an investment-banking firm like CL King  is to market equity or the security issues. In this role, the firm acts as a distribution agent distributing securities for the corporation effectively. If an organization tries to sell an issue on its own, it is usually ineffective and very costly. An investment banker on the other hand has an already established sales and marketing network for distributing securities. The advantage of security bankers is that they offer security to both the company issuing the securities and the investors who buy these securities. The corporation also does not spend resources it does not have nor does it run the risks of the market uncertainties.

Top global banks and financial institutions are adopting new technologies to streamline their internal operations and align their resources to offer customers the best & innovative banking services. In order to provide customized and revolutionized banking solutions to the global businesses, banks first need to refine their work processes and take the crude out of it. This will help them to indulge in the big quotients like mergers and acquisitions, private placements, and bankruptcy and restructuring deals and providing sophisticated business banking to the clients. Modern banking and financial institutions rely on the top-end technology products in order to rapidly share information with deal partners to make sure successful operations in a more secure way.

Technology adoption simply drives efficiencies when it comes to data management, handling and accessing. With the help of latest banking software solutions banks can easily manage, evaluate and share information related to complex banking and financial instruments while maintaining complete security and control. They are also working on the better security measures for better financial transactions.

New banking applications and software solutions offers immense capabilities to the banking management that certainly help accelerate all operations. With the help of software applications banks can control the deal processes and handle critical information with due diligence. These software solutions also support sourcing of newly emerging opportunities so that banks can provide more invaluable banking solutions to the customers with lesser risk of frauds. They are also adopting secure web-based and mobile access solutions for the customers through these high-end technological solutions only.

Banks like CL King are also accelerating their operation efforts through various means like:

• Speed up internal (banking and finance related) reforms
• Access innumerable set of information to extract quality information
• Find information easily, effectively and shorten waiting period of customers

Banks and financial institutions like CL King & Associates are also busy in collecting data for business insights and transforming it into activity for further banking transactions which will result in risk mitigation and better ROI. In this way they can respond more effectively to the customers' queries. It also ensures transparency and consolidating of information on a single platform only. It enables tracking and reporting of banking information in a secure and sensitive manner.

All these measures help banks to adopt fast changing banking technology and provide the best banking solutions to the private organizations. It is also helping them to connect with their customers in a more personal way. In fact, banks have empowered themselves to effortlessly offer business loans, corporate banking services, insurance, investments, mobile banking, internet banking savings and checking accounts as well as financial advice to the businesses through the adoption of newly emerging technologies.

Investment banking firms such as CL King & Associates provide business all the capital they need, and they also have advisory services for different types of investors. On the other hand, investment banks should take care of investing in company assets and searching for investors that will make the business go further. However, choosing an investment bank can take some time, and you should know what are the right questions to ask, if you are trying the best bank for you.

Finding a proper investment bank

It may seem insignificant, but the size of investment banking firms is very important. The smaller banks will offer you more one-on-one sessions, and they can give you all attention you need. The reputation is also very important, and you should find out if the bank has proven its success, and how it worked with other clients so far. On the other hand, even if you are a beginner in the investment area, it is crucial to know if there is a strategy that the bank has for the future, and wants the kind of goals it wants to achieve in the future. In the end, the atmosphere can tell you a lot about a particular bank. It includes all the people involved in your project, how much they are willing to help you, and what kind of ambitions they have when investing.

General or specialist investment banks?

When it comes to investment banks such as CL King , there are two major types, and they both offer different advantages for your business. General investment banks usually focus on providing clients with all necessary advices, but they still handle monetary transactions. Those types usually take care of raising the equity capital, rising the debt capital, launching new products and they can be also engaged in proprietary trading. On the other hand, specialist investment banks are "specialized" for particular sectors, and they mostly want to help small business with a particular niche. Their major benefit is the ability to help a company develop in a specific way, depending on its niche, which is very important nowadays. However, before you decide on any of those two types, you should understand your own niche, products and future goals.

There are also buy side and sell side services, where the first one works with pension funds, mutual funds and hedge funds, but the second one is focused on placing new bond issues, and helping clients facilitate transactions.

No matter what type of company you have, the investment banking will help you acquire the funds, and all you have to do is find the one that will get your business to the higher level.

Also read:  Investing Secrets of the Big Investment Banks

If every story comes with a moral, the story of how we have invested our funds over the past 10 years has this one lesson to teach us: that you can't just put all your money in stocks alone. This wasn't the way things always worked. The general understanding not long ago was that if you bought stocks and held onto them for long enough, over the long run, they would actually perform far better than bonds ever did. And they did that with no more than the same amount of risk that bands came with. Financial advisers told their clients to only choose investment bonds if they needed somewhere safe to park their funds for a short period of time. Over the long run, the always felt that stocks won out.

As we all know though, stocks have managed to do particularly poorly over the last two years the of the last decade. It was so bad, the 2000's compare with one or two of the worst investment decades since the great depression. In a time when the US economy is somewhat troubled, putting all your money in stocks is easily too risky a gamble to take. Anyone who invests for a reasonable period of time needs to consider buying fixed income securities as the kind of stabilizer for their portfolio.

Of course, when chosen as an investment, bonds call for some kind of scaling back of any ambition. Still, it doesn't have to be as bad as it appears. Studies that compare portfolios devoted to treasury bonds to portfolios that are divided equally between investment bonds and shares find that the one with the bonds only earn about 2% less a year. This isn't that much of a hit to take for all the security they bring you.

There's just one problem in all this, of course; investment bonds may be a safe is a place to park your money. But when there is little risk involved in an investment, the interest paid is usually quite paltry. Add to that the fact that there are millions of investors around the country who are anxious to place their money in sound debt, and you begin to see why the government has no interest in raising the rates of return on investment bonds. If you're wondering what sound debt is, consider what bonds really are - they are loans you make to the government in return for an IOU. You are selling debt to the government; since the US government is the most reliable borrower on earth, with vast funds to back any IOU up with, any debt made out to the US government is considered really sound. And that is so even if the US has borrowed staggering sums of recent. U.S. Treasury bonds pay 0.2% on bonds that you are allowed to cash in six months. Those are pretty low rates.

Investors do have a problem with how paltry their returns are with government investment bonds. But they are willing to take that if the alternative they have is in regular stocks that can tank like they did three years ago. If you wish to experiment with other kinds of investment bonds, make sure that you don't choose anything to do with mortgages - like Freddie Mac and Fannie Mae. The housing crisis is still about and dealing in corporations that are affected can't be a smart investment move.

To learn more, consult with the experts at CL King and Associates . We co-manage bond offerings, IPOs, follow-ons, secondaries, convertibles, and preferred. CL King has acted as Co-Dealer Manager on Verizon’s $1.9 billion cash tender offers for 8 series of debt securities of Verizon and many such big companies.

Or visit here: http://www.clking.com/

Banking offshore is more secured than onshore as it offers more advantage than domestic banks to business men. The only different is it is situated outside the residence country or domicile of account holder and onshore is located in home country where you live. Offshore banking is a type of shell for investor who is depositing money in other countries.

Past days it is only considered for criminals and smugglers but the fact is different because there is no advertisement for these types of accounts and exploring the benefits in any media. Offshore banking has strict privacy for funds and data of account holders which is unlike with onshore bank account. These banks do not reveal the information to third party, and anybody can't able to know your amount and saving history. Include day to day checking with short and long term saving accounts. Commonly it is used to store the cash that most people use offshore bank for. A required bank service for wealthy people who live in unstable political and economy countries where fear to lose their money if any problem persists. So the save money from being lose offshore bank account for online transaction is suitable options.

Stuffs that differentiate Offshore from Onshore

• Assets Protection - Posses great security to assets protection Asset confiscation has taken place in Cyprus, Ireland, Hungary, and Poland just recently.
• Diversify Risk - Banking diversify whole risk of being lose money as add protection to your money Money kept offshore is harder to have frozen or seized. In many cases, offshore banking also allows greater privacy and secrecy... all of it legal.
• Interest Rate is higher - Provide high interest rate on your saving, offer interest up to 10 times more than your domestic bank account. If you're used to relying on interest income, this can be a game changer for you.

Can you individual open offshore bank account

Yes, many international banks offer banking offshore with numerous services unlike of your domestic bank account. All you need a notarized copy identity proof signatory passport and a copy of residence identity and corporate documentation. An initial deposit is needed to activate the bank account in around 100$. There are some banks which provide services on net and don't need to visit personal with bank, but before going for online services determine which bank you are working with.

If you are looking for financial services to help you manage your wealth, assets, make investments for you, or manage your business banking, then contact CL King & Associates financial services provider

The firm provides investment banking, equity research, sales and trading, and investor services to corporations and institutions.

To learn more, please visit here: http://www.clking.com/

Have you been "eyeing" a fancy new car, or how about a brand new house? Have you come to the conclusion that it is time to get it? Well, if you have, reach into your bank account grab a few thousand dollars and put a down payment on that house or car. You don't have enough money for a down payment? Relax, most people don't have thousands of dollars they can just pluck out of the air and use to buy a new car or house. If you haven't figured it out yet, here's a hint, you need a loan. It would be great if acquiring a loan was as simple as saying it, but that is not the case. In order to be approved for a loan, your credit score will be reviewed and if you haven't kept up with your bills and payments, you might be in some trouble.

Not jail time trouble, but financial trouble, and that loan you needed just might be out of reach because of your credit score. So, what is a credit score? A credit score is a number based on your credit report and everything in it. All of your larger financial transactions will be kept in this file, which is known as a credit report. Bills you have promptly paid on time and bills you have paid late will all be included in the file, such as credit card payments, car payments, mortgage/rent payments, etc. All this information will be calculated by a statistical model and, therefore, your credit score is born.

Your credit score will affect many of your financial decisions, as well as your available financial options. A person with an average or above average, credit rating will not have too much trouble when applying for a loan. However, someone with a very lower credit score will usually have a great deal of trouble finding a bank to get a loan from. Usually, those with low credit scores need to have someone to co-sign on the loan, and that person will need to have a much better credit rating than you. The interest rates you receive on the loan or your mortgage may also be manipulated by your credit score. Basically, the better the credit score, the lower the interest, or vice versa.

Many do not know this, but there is more than one type of credit score. The largest and most well known of these credit score companies and providers of free credit reports, in the United States at least, is FICO which stands for Fair Isaac Corporation a provider of the FICO score who are the ones responsible for coming up with the mathematical formula used to calculate a person’s individual credit score. Unfortunately, this whole credit score business costs money, and in order to find out what your score is, on a regular basis anyways, you’re going to have to put up some cash. Luckily, there are many different sites that offer many different prices.

If you want to learn more consult with the experts at CL King and Associates .

CL King provides investment banking, equity research, sales and trading, and investor services to corporations and institutions. The firm also co-manages bond offerings, IPOs, follow-ons, secondaries, convertibles, and preferred.

If you want to learn more, please visit here: http://www.clking.com/