Reconstructions and takeovers of companies

Abstract

Change is a law of life in business associations as in other living organisms. The circumstances which have overtaken world famous companies - like the Compagnie Universell du Canal de Suez - have their parallels in less conspicuous catastrophies which befell countless independent retail stores, cotton. textile mills and Hotel caterings establishments etc. In addition to companies like these - victims of radical changes in their environments - there were even more numerous victims of their own misperceptions of existing ,conditions - overestimated demand for products underestimated costs, and miscalculated processes. All of these· circumstances called for change in activities, policies, financing or structures of the companies involved. In general, company.laws of the ninteenth century made inadequate provfsions for change .:.. either for enormous success requiring a great expansion of capital and scope or operations, or for failures requiring radical departures from original plans. The 19th Century prevalent concession was limitation of life of a company'for a fixed period of ' 20 or 30 years - But dissolution at the appointed time might be tragedy for the Investors, worker and consumers. 1 There was need not only for change but also continuity. Many factors could be salvaged in the combination (of money facilities, management and manpower) if the enterprise were allowed to change its purpose, its capitalization, or its facilities, I without abandoning all the rest. There is a need for change without dissolving the whole aggregation of rights and duties known as the corporate entity, or the juridical person.