• The company is “born”: it needs, for example:

1. One or more shareholders (owners)
2. One or more directors
3. A bank account
4. A room from which to operate
5. A book-keeper (perhaps)
6. A couple of keen but often non-paid helpers

• The company starts growing: it needs, for example:

1. Bigger premises
2. Staff (paid)
3. Contracts with suppliers/customers/agents/distributors
4. It systems
5. Brand protection

• The company grows bigger – it needs finance

1. From banks [debt]
2. From other investors [debt and/or equity]

• The company acquires

1. Other companies (share acquisitions)
2. Other businesses (business acquisitions); and
3. Enters into joint venture agreements with international businesses
4. A creative team

• The company enlarges it management and brings in heavyweight directors

• The company sets up subsidiaries and / or branches in several non-uk jurisdictions

• The company goes public and lists its shares on the london stock exchange

• The company merges with a similar business in the far east

• The enlarged group over-expands – neither its banks nor its shareholdres are prepared to make more funds available.  The successful businesses are sold, the overseas subsidiaries are closed down.   The company is still short of capital

• The group goes into insolvent liquidation

• Small parts of the group are bought by ex-employees and the cycle starts again……………………….

Nick gould

Collyer bristow llp

November 2011