What is a going private transaction?

A going private transaction is a type of corporate law transaction that is used when a publicly traded company (one whose stock is listed on a stock exchange) chooses to become a privately held company. The company’s stock is bought or redeemed from the stockholders. This move is typically seen as a way to protect the company’s assets from onerous stockholder litigation. In Nebraska, the majority of the rules governing going private transactions are set forth in the Nebraska Business Corporation Act (NBCA). The NBCA provides that a company cannot merge with a wholly owned subsidiary, acquire shares of its own stock or enter into a transaction to eliminate public trading in its securities without complying with the provisions of the Act. When a company goes private in Nebraska, the offer to buy is made to all shareholders of the corporation at the same price. The company must also provide employees an opportunity to purchase shares of common stock. The shareholders should also be informed of the details of the transaction, including the legal and financial terms of the agreement, more than twenty days before the shareholders are able to accept the offer. Additionally, the NBCA states that the company must appoint a special committee to evaluate the fairness of the transaction in terms of benefits and disadvantages of the proposal to the company’s shareholders. This committee is composed of independent directors of the company, and is responsible for ensuring the fairness of the transaction to the shareholders. In summary, a going private transaction is a type of corporate law transaction in which a publicly traded company becomes a privately held company. In Nebraska, the regulations governing this transaction are set forth in the Nebraska Business Corporation Act. The company must make an offer to buy all of its shares, inform the shareholders of the details of the transaction, and appoint a special committee to evaluate the terms of the transaction.

Related FAQs

What is the purpose of corporate insurance?
What is a private placement?
What is the role of corporate governance?
What is the difference between a corporation and a LLC?
What is the process for corporate insolvency?
What is the role of corporate executives?
What is the corporate disclosure rules and regulations?
What are the corporate governance requirements?
What is the process for issuing corporate warrants?
What is the best way to finance a corporation?

What is a going private transaction?

Related FAQs

Related Blog Posts