The notion of "corporate finance" has by now become a widely-used generic term for possible solutions and questions concerning financing of a company.

The basic question of own funds versus external funds cannot usually be answered with a simple black-and-white solution. Hybrid financing instruments can show ways out of imminent conflicts induced by supervisory law (Law on the Supervision of Insurance Companies, German Banking Law etc.) or tax law (e.g. § 8 a KStG - Corporation Income Tax Law). Credit agreement design and security agreements from the soft comfort letter to the hard guaranty on first request open up operational scopes which can prove helpful with regard to the demands upon the equity capital policy of business corporations. Profound knowledge of substitute equity law pertaining to the limited and incorporated companies as well as the assessment of liability risks arising from financing processes in particular companies and within the group belong to the requisite know-how for the management and consultants.

New legal regulations (e.g. KonTraG - Law on the Supervision and Transparency in Business Sector) lay yet higher demands upon a constant controlling of finance conduct, opening at the same time new possibilities for the integration of risk capital and other capital operations (own shares).


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