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Corporate Counseling – Advisory & Strategy

Introduction

Before raising money, a company might need advice on how to run business or fix problems. This is Corporate Counseling.

1. Areas of Counseling

  1. Project Counseling: Determining if a new project is viable (Feasibility Study).
  2. Capital Structuring: Deciding the mix of Debt vs Equity.
  3. Financial Restructuring: Helping sick units. Determining how to pay off debt.
  4. Tax Planning: Reducing tax liability legally.

2. Importance for Startups/SMEs

  • Large corporates have in-house CFOs.
  • SMEs lack expert financial brains. They hire consultants (Merchant Bankers) for this.

📋 Case Study: Turnaround Strategy for 'AutoParts Ltd'

'AutoParts Ltd' was making losses due to high interest debt. A Corporate Counselor analyzed their books and suggested 'Debt Restructuring' (swapping high-interest loans for low-interest bond issues). This reduced their interest burden by 40% and turned the company profitable within 2 years.

Summary

  • Nature: Diagnostic & Prescriptive.
  • Goal: Improve financial health.
  • Client: Usually SMEs or Sick units.

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 4

1. Corporate Counseling is a:

Fund Based Service
Fee Based (Advisory) Service
Manufacturing process
Charity work
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