Background
ABC is a profit making entity have 800,000 USD as net worth and 1 million USD as healthy loan portfolio.
The new ltd Co name is being formed -XYZ with 100% ownership by ABC .
The Certified Valuer has indicated that conservative value of the net assets ( 800,000 $) of ABC is more than 2 times of net assets as it has profit making portfolio. The opinion is acceptable by both entity as
· board of both Co. Is same as on date and
· opinion has followed the market trend .
Questions are –
1. How XYZ , new company will take care of the premium payable to ABC which is certainly not through financial transaction
2. What will be paid up capital of XYZ after acquiring the net assets –
Option A . 1,600,000 USD or
Option B. 800,000 USD
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