Procedural aspects of reverse merger

Procedural aspects of reverse merger

Reverse merger is a process in which a public company (shell) is acquired by a private company. This is done with the view of avoiding the complex and lengthy process of going public that is generally faced by private companies.

In a reverse merger, the shareholders of the private company acquire control in the public company and then merge it with the private firm. The public company is known as the shell, because after the merging all that remains of the public company is its organizational structure. The shareholders of the private company receive a substantial majority of shares of the public company and the control of it Board of Directors. These kinds of transactions can be carried put within a matter of weeks.

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