Warehousing

Warehousing is a term related to inventory. This can be defined as a procedure where a company slowly and gradually builds up its holding of shares in some other company that the former wants to takeover in near future. In terms of inventory warehousing can be defined as a process of storing goods in a physical storage that is called a warehouse. In terms of acquiring a company the company that wants to acquire the other company warehouses small lots of the shares of the other company under the name of a nominee. The companies that use warehousing technique of acquiring shares of the other company wish to remain concealed and anonymous and don’t let the other company know that they are acquiring their shares. These anonymous companies are unable to make public tender offer.

Warehousing can be termed as the illegal trading of the shares those results in acquisition of a company by any other anonymous company. This means that the acquiring company is purchasing more stocks of the other company than permitted by the stock exchange in a legal way. As a number of nominee names are used by the acquiring company so this practice is considered to be illegal by the stock exchange.

Generally the term warehousing is allocated to the inventory processes that involve the performance of the physical and administrative methods within the inventory. This involves all the processes associated with the storage of the goods. This may involve reception, inspection and investigation of the goods.

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