All clear? It is of vital importance for the management of a company that the internal financing of a group is not in conflict with any legal provisions. If this is not the case the members of the management risk a personal liability or might even be liable to prosecution. Therefore, particular diligence has to be applied upon setting up a group cash pooling system, especially if it shall include a foreign cash pooling company. A do-it-yourself-approach is highly inadvisable. Instead, you should seek expert legal advice in connection with the preparation, implementation and the handling of such cash pooling system right from the start.
Risk Factor Cash Pooling
Finance
If you want to go ahead liquidity is essential...
The way forward requires some basic parameters. Sufficient liquidity is a fundamental precondition for economic success. The negotiations with banks require certain resources and are frequently time-consuming and expensive.
It goes without saying that the bank will engage only the finest law firms for the preparation of the loan documentation. However, it will charge the respective costs to the customer. If no additional professional legal advice is sought by the customer upon the negotiation of the agreements with the bank, things might get quite unpleasant after signing. This is due to the fact that provisions regarding warranties, special obligations and covenants contained in the initial versions of such agreements are often rather excessive. A number of those provisions can be negotiated. A legal expert can show you which clauses bear excessive risks for the company and which provisions need to be deleted or modified. A managing director who accepts certain obligations in the agreements which the company is unlikely to be able to fulfil afterwards might soon have to respond to certain questions raised by the shareholders or the insolvency administrator...
The financing of your company should be built on a solid basis with bank loans, internal cash management tools and/or by resorting to the capital market:
The way forward requires some basic parameters. Sufficient liquidity is a fundamental precondition for economic success. The negotiations with banks require certain resources and are frequently time-consuming and expensive.
It goes without saying that the bank will engage only the finest law firms for the preparation of the loan documentation. However, it will charge the respective costs to the customer. If no additional professional legal advice is sought by the customer upon the negotiation of the agreements with the bank, things might get quite unpleasant after signing. This is due to the fact that provisions regarding warranties, special obligations and covenants contained in the initial versions of such agreements are often rather excessive. A number of those provisions can be negotiated. A legal expert can show you which clauses bear excessive risks for the company and which provisions need to be deleted or modified. A managing director who accepts certain obligations in the agreements which the company is unlikely to be able to fulfil afterwards might soon have to respond to certain questions raised by the shareholders or the insolvency administrator...
The financing of your company should be built on a solid basis with bank loans, internal cash management tools and/or by resorting to the capital market:
… Group Financing… Bonds … Syndicated Loans … Shareholders' Loans … Cash Pooling … Bank Loans … Collateral Securities … Mezzanine Capital …
Debt to Equity Swaps … Refinancing … Pool Agreements … Financial Lease … Sale-and-Lease-Back … Subordination Agreements … Jouissance Rights …Convertible Bonds … Silent Partnerships …
Capital Increases
Debt to Equity Swaps … Refinancing … Pool Agreements … Financial Lease … Sale-and-Lease-Back … Subordination Agreements … Jouissance Rights …Convertible Bonds … Silent Partnerships …
Capital Increases