A corporate transaction is the exchange of a good, service, entity or financial instrument between corporations for another good, service, entity, financial instrument, or, most commonly, money.
Examples of a corporate transaction are:
- Merger/acquisition of two corporations
An acquisition is strictly a corporate action in which a corporation buys the majority (if not all) of another company's stocks in order to have control of the firm. A merger is the mutual agreement between two firms to join assets and incorporate under one entity.
- Sale/purchase of assets
The sale or purchase of assets for the use of the company in profit-seeking activity. This could be the sale or purchase of land, equipment or a building.
- Investing activities
When a firm chooses to invest its assets (usually money) in business activities that will assist with the firm's long-term profitability.
These transactions can be either simple, complex or ongoing. Simple transactions are a one-time occurrence, where the purchaser exchanges money for a good or service. Complex transactions are usually purchased with credit, which involves third parties, as well as requires subsequent transactions. Ongoing transactions are done more than once, if not frequently, with another party. They are typically between a supplier and a vendor, where goods are delivered regularly in order to maintain the business activities of the vendor.© BrainMass Inc. brainmass.com May 28, 2020, 2:32 pm ad1c9bdddf