Corporate counseling denotes the advice provided by the Merchant Banking to the corporate unit to ensure better corporate performance in terms of image building among investors, steady growth through good working and appreciation in market value of its equity shares. The scope of corporate counseling, capital restructuring and, portfolio management and the full range of financial engineering includes venture capital, public issue management, and loan syndication, working capital, fixed deposit, lease financing, acceptance credit, etc. However counseling is limited to only opinions and suggestions and any detailed analysis would form part of a specific service.
The scope of corporate counseling is restricted to the explanations of concepts, procedures and laws to be observed by the client company. Requirement of any action to be taken or compliance of statutory formalities to be made for implementation of those suggestions would mean the demand for a specific type of service other than corporate counseling being offered by the merchant bankers. An academic analysis of corporate counseling present a different picture than that transpires from the literature of the merchant bankers. Firstly corporate counseling is the beginning of the merchant banking service which every clients whether new or existing has got to avail a different matter whether a merchant bank charges its client separately for rendering the corporate counseling service or includes the element of fee in the other heads of services but from the angle of priority. Corporate counseling is first in line of the services which a merchant banker offers and than other services.
Secondly the scope of the corporate counseling is very vast. Its coverage ranges from the managerial economies, investments and financial management to Corporate Laws and the related legal aspects of the organizational goals, locations factors, organizational size and operational scale, choice of product and market survey, forecasting of product, cost reduction and cost analysis, allocation of resources, investment decisions, capital management and expenditure control, pricing methods and marketing strategy, etc. As financial and investment experts, a merchant banker has to guide the corporate clients in areas covering financial reporting, project measurements, working capital management, financial requirements and the sources of finance, evaluating financial alternatives, rate of returns and cost of capital besides basic corporate changes of financial rearrangement, Reorganization, mergers and acquisitions, etc. are the areas to be covered.
Corporate laws should basically cover the legal aspects including the various legal formalities involved in areas of corporate finance being raised from the financial institutions, banks and the general pubic in the form of loan, new issues of equity or debentures respectively