Main Subject - Business

When taking into account all pertinent tax ramifications, there are four basic classifications that must be considered when purchasing or selling a corporate business. These are;

1. Transferring corporate assess in exchange for cash or notes

2 .Acquiring corporate assets by use of stock

3 .Acquiring corpo

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

rate stock utilizing cash or notes

4 .Acquiring the stock of a corporation utilizing the stock of the acquiring corporation. In the 1st type of transaction, corporate assets are sold in return for cash or notes, or a combination of both from the purchaser. After the transaction the corporation is lef

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

t with cash or notes , which it may use for investment purposes. This transaction usually gives rise to a taxable gain or deductible loss to the corporate entity. As an alternative solution , the sale of all the assets may be followed by the complete liquidation of the corporate entity in a tax free transacti

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

on. However there will be a taxable gain or deductible gain to the shareholders involved. Thus this type of transaction gives rise to two events; the sale of assets and the liquidation of the corporation . while the emphasis of this articles on the start-up of a business , the sale of corporate assets and

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

the subsequent liquidation of the selling corporation would allow the purchaser to acquire the entire assets of a successful selling entity while at the same time allowing the selling shareholders at least one tax- free event in the process.

In the event that both the buyer of all the assets of a corporation

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

and the seller agree to the terms of the sale , the purchaser obtains a basis for the assets purchased equal to the purchaser cost. Thus if any assets or inventory are purchased for an amount greater than the seller basis , the buyer would obtain a higher depreciation basis and a higher cost of goods sold.

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

The buyer of all the corporate assets may expedite the transaction and also negotiate a better purchase price for all the assets by making the corporate seller aware of the benefits of a complete liquidation. If a corporation distributes all of its assets in a complete liquidation within twelve months afte

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

r the adoption of a plan of liquidation , no gain or loss will be recognized on the sale of property by the corporation during there twelve month period. As a result , the tax treatment for a corporation selling all of its assets and then liquidating is no different from the case where a corporation liquidat

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

es first , with the shareholders later selling the assets that were distributed to them during the twelve month liquidation period In an assets deal , care should be taken to see that the purchaser is not made liable for any part of the seller contingent or actual debts that the purchaser did not agree to

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

assume. When acquiring only assets , the possibility is minimal that the purchaser will become liable for any contingent liabilities that the acquiring party was unaware of at that time of the transaction. However , such unitende3d liability might arise through noncompliance with the sales Act. The purchas

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

er in this case will have to notify each creditor within a specific time period before he takes possession of the assets or before paying for the assets . if the purchaser fails to comply with this statutory requirement, the law will create a trust consisting of the assets purchased for the benefit of the cr

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

editors of the selling corporation.

If the purchaser pays an adequate price for the assets acquired , the rights of the seller creditors will not be prejudiced. This will probably prevent the seller creditors of the selling corporation from proceeding against the purchaser. If however, the purchase price i

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

s paid directly to the shareholders of the selling corporation, the possibility always exist that the rights of the creditors will have been prejudiced since this method of payment may enable the shareholders to defraud the creditors. Thus , care should be taken to see that the purchase price is paid directly

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

to the selling corporation only.

The second method , how to acquire corporate assets by the use of stock come this way; a purchasing corporation might elect to acquire all the assets of another corporation by utilizing its own shares. In order to make this type of transaction tax free under so called C- typ

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

e reorganization requirements ,the acquiring company must issue voting stock. One troublesome point in this type of transaction is that it would result in the dilution of the voting interests of the shareholders who held stock prior to the date of the acquisition since more shares will now be outstanding.

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

Because this result would be impossible to avoid tax -free stock deals.

The warning her is that there is hidden danger in seeking to purchase all of the selling corporation assets utilizing the purchaser stock. Conclusions in the past have been arrived at that when the purchase uses its own stock to conclude

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

the purchase , this transaction is tantamount to a statutory merger , thereby making the purchaser automatically liable from the debts of the selling corporation. One distinct advantage of this method is that it does not require the use of the purchaser working capital.

The third method, how to acquire corp

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

orate stock utilizing cash or notes goes this way; should a stockholder of the selling corporation elect to sell his stock in the corporation to be acquired, the result will be a taxable transaction unless the proceeds of the salary equal to the adjusted basis of the seller stock. Example in 2006 X sells h

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

is stock in Z corporation , which represents a controlling interest in the corporation for 400.000FCFA , X had acquired the stock in 2004 for 100.000FCFA , X will have a long term capital gain of 300.000FCFA.

The fourth method, how to acquire the stock of a corporation utilizing the stock of the acquiring c

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

orporation can be done this way; a corporation might use its own stock in acquiring the stock of another corporation. If done pursuant to the requirements of a B- type reorganization it will be completely tax free. This method has the advantage of avoiding the use of the acquiring corporation working capital

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Barcodes for inventory purposes are used to identify and list inventories in businesses dealing with a large number of goods. Barcodes are efficient tools for maintaining large inventory records; they save time and manpower because the procedure is systemized and standardized. Above all, barcodes are very specific to the product.

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