Moving Of Funds Within Group Companies Is An Art More Than Science, And Need Tact With Common Sense
You have surplus funds in a company within the group, and another company within the group is in need of the funds. What should you do?
There are plenty of “legit” means of moving funds around within a group company. Dividends up streaming to Holding Company and deployed as Inter-Company loans downstream, Management Fees, Royalty, Transfer Pricing via APA or Advance Pricing Agreement, Project Management fees, etc.
Which of the above “tools” is / are to be activated, is an Art on the advice of a seasoned CFO, like myself.
However, should a company be strike-off soon, as this company needs to “zerorize” its assets and liabilities as a pre-requisite for Striking-off, Do Not transfer funds out of this company without a “legit” reason for clearances would be needed from the the relevant government authorities as requirement prior to Strike-Off.
The CFO of O-Bike should have taken due care prior to moving this $10m out of the company prior to a strike-off is to take place.
Now it will probably spend more to “repair” the damage it has done on it’s PR front to regain trust and confidence else where in the globe.
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