Other Parties Involved

Question 1

Sellers/ Buyers ( buyers are also typically known as borrowers)

Answer 1

For instance, private individuals ( including directors) , investors (including shareholders), corporations and public bodies.

Question 2

Lenders

Answer 2

• Typically banks, private investors, private equity firms or institutional investors seeking a return on their capital. These will base a decision to lend on the potential level of return and the borrower’s credit rating, reputation and performance.

Question 3

Private Equity Firms / Venture Capital Firms

Answer 3

these aggregate funds from institutional investors and private individuals. They aim to buy businesses at low prices ( typically because the businesses are underperforming or undervalued), cut costs, improve efficiency and then subsequently sell at a profit.

Question 4

Institutional Investors

Answer 4

Institutions with specialist knowledge that trade securities ( such as shares) in large quantities, usually on behalf of others. Examples, include pension funds, insurance companies, investment banks and hedge funds.

Question 5

Investment Banks

Answer 5

Financial advisors that typically advise and assist corporations and public bodies looking to raise money. This includes linking clients to potential investors; facilitating the issue of shares or bonds, for instance through helping to price the issue; and analysing the financial state of companies for the purpose of valuation and risk analysis. Investment banks also trade securities such as bonds, shares and derivatives on behalf of clients.

Question 6

Accountants/Auditors

Answer 6

Help prepare or verify financial statements and analyse the financial state of companies for the purpose of valuation and risk analysis.

Question 7

Consultants

Answer 7

Advise on existing strategies, firm performance and potential future strategies.

Question 8

Public relations

Answer 8

Can be enlisted to promote the fact that the parties are acting appropriately, thus minimising negative public attention.

Question 9

Regulatory Bodies

Answer 9

Set and enforce various legal requirements with which parties must comply when executing transactions. Notable examples include the Financial Conduct Authority (FCA) and the competition department of the European Commission.

Question 10

Environmental / Social Impact Experts

Answer 10

Assess the environmental or social implications of transactions to help determine whether legal implications could arise.

Question 11

Companies House

Answer 11

Incorporated companies must be registered with companies house and must ( under the companies act 2006) file information including annual accounts and returns. Companies House must also be notified if certain changes are made to companies.