Merging your business with another or acquiring another can be a long and complicated process. Unforeseen complications can arise and lead to further problems. It is also important when finalizing these deals that all sides are treated fairly and equitably.
Having an attorney on your side to represent you will guarantee that when you are negotiating a deal, your interests are fully represented and defended. They will make sure that the contracts are all there to ensure that there is nothing the can hold up or destroy a deal altogether.
Merger and Acquisition Deals
The two terms tend to be bandied together as one but they both mean different things. In a merger, two separate companies join to create one larger company. In most instances, the two companies have equal say in the merging of the two and the leadership board of the new company is established jointly by the leadership of the two former companies.
In an acquisition, one company takes over another. The acquirer is the purchasing company, while the target is the purchased company. Acquisitions can occur in one of two ways: an acquiring company can either purchase the controlling stock from the target company’s shareholders, or the acquiring company can purchase the target company’s assets, such as facilities, supplies, and equipment.
Not all merger and acquisition (M&A) deals go through without a problem, which is why having a lawyer is a smart business and legal decision. You should always have a lawyer representing you, but you especially should bring one on when you start to see these signs:
- To legalize the deal, you will need to draft and file the proper paperwork. Attempting to do so without the proper legal background could lead to complications in your deal or potentially find one that is unfair to you and your company.
- Not all deals are smooth as specific terms need to be negotiated, including the control of the company, payment, and the allocation of assets. These can be the very details that could abruptly end a deal.
- Stockholders in a company that is involved in an M&A deal can further complicate matters. They want it to move forward without allowing their role to jeopardize it. A lawyer help ensure that you remain within compliance of the law.
- Working with a lawyer from the outset of any deal you wish to participate in will help make minimize any problems that you might encounter. It will also help minimize any disagreements between the two sides.
What Happens When Complications Arise in a Deal?
Not every deal is going to go smoothly particularly when you are dealing with large companies. Opinions could change on either side leading to an already-negotiated point being put into dispute again. The main points that generally arise have to do with the overall compensation that will be exchanged and how the new company will be controlled.
It is the attorney’s job to attempt to sort these complications out before they rise to a level where they could jeopardize a deal. It is also their job to foresee areas where complications could arise and address them with their client.
Annapolis Business Attorneys at Oliveri & Larsen Will Help You With a Business Merge
If you are preparing for a major merge and you do not know how to move forward, one of our Annapolis business attorneys at Oliveri & Larsen can help. Call us at 410-295-3000 or contact us online to schedule an initial consultation. Located in Annapolis, Maryland, we serve clients in Ocean City, Anne Arundel County, Baltimore County, Baltimore City, Calvert County, Harford County, Howard County, Queen Anne’s County, St. Mary’s County, Worcester County, Kent County, and the upper and lower Eastern Shores of Maryland.