After the acquisition of the Target Company to acquire companies , usually re-adjust all kinds of resources or property between companies in order to achieve optimal allocation of assets to realize value. In the asset transfer process , is more prone to related transactions . Mentioned related transactions generally will think it contains derogatory and not supported by law . However, in the reorganization of assets , because the company and its related parties know each other , in order to improve efficiency and reduce costs , mostly related transactions or adopted .

It simply refers to the related party transactions , transactions between the company and its stakeholders in . Stakeholders can be both legal and can also be a natural person , including the company's subsidiaries, shareholders, directors , supervisors and senior executives , their families and so on. Transactions involving related party transactions , including but not limited to the purchase or sales, agents, provide guarantees or funds to provide or receive services and so on.

Given the related transaction is not the same normal market fair trade, in practice, at least to measure the following three questions:

1. Price of related party transactions should be fair and reasonable.

As the parties to the transaction related transactions in unequal status, and some companies is the use of related transactions to achieve a reasonable tax avoidance purposes, these are contrary to the objective of equality and equity, the transaction price should be fair and reasonable, in order to avoid corrupt practices review by the administrative department of supervision.

2. Related party transactions should be timely and full disclosure of information.

Information disclosure policy related transaction is the transaction amount, disclosures and documents to be submitted are clear requirements . With the sound system, the related transactions false , corrupt behavior will be substantially reduced.

3. Related transactions should comply with the statutory approval process.

Companies invest in other enterprises or provide security for others , by the board of directors or the shareholders' General Assembly resolutions . Company to provide security to a shareholder or actual controller must resolution by shareholders or shareholders' meeting. Related party transactions must be made by the company adopted by the authority having jurisdiction thereof.

The above legal issues, mergers and acquisitions from the beginning of the legal due diligence information disclosure to the ongoing and related transactions are interconnected with each other. The successful completion of due diligence , the need to rely on information disclosure and review of related party transactions identified ; while information disclosure system is to protect the legitimate fair related transactions . Whether companies choose how to complete the merger and reorganization, will involve three basic questions .