Mergers and acquisitions (M&A) are complex and strategic transactions that can significantly transform the business landscape, creating new opportunities for growth and expansion. However, to successfully execute these operations, it is crucial to understand the legal considerations that must be taken into account, especially in a highly regulated market like the United States.
Is your business ready to take the leap?
Merging or acquiring a company implies a series of previous provisions that must inevitably be complied with. These involve a change in assets, stocks or loans that cause substantial changes in personal assets.
It is absolutely essential to hire a suitable person who has experience with the subject, such as a business lawyer who is sufficiently prepared to deal with contracts, and who is competent in all matters related to acquisitions and mergers.
There are many guidelines to deal with that require time and experience on the subject. We may not be fully prepared and we will ignore many procedures if we do not have the assistance of an attorney.
First of all, we must consider this issues:
- Capital: the assets of the company to be acquired, which is not only made up of the interests or shares to be purchased, but also of possessions, such as real estate, land, and others.
- Merger: the union of two or more organizations which can create an increase in profits for both.
Documentation
In order to carry out these steps satisfactorily, we must review the documentation provided and be able to evaluate the results that may possibly be obtained in economic / financial development, customer relations, and intellectual property, which surely can change once the merger is consolidated.
These changes must be gradual and by mutual agreement between both owners of the companies. In order to make all the steps to follow clear, contracts must be drafted and signed, and all legal terms must be laid down to ensure that the business is completely clear and legal, and that the tax, legal, human, and goods and services aspects are considered for all who are involved in this operation.
The task is not easy. It is arduous, and for this you need a business lawyer who is present and helps in these processes bilaterally. The drafting of all of these agreements requires the presence, in some instances, of owners and shareholders. The notification to employees will be essential.
There is even the possibility of having to register or change intellectual property.
The Role of the Business Lawyer
This operation is more complex than common buying and selling, since it is not a simple change. Instead, it involves a process where the common agreement between the parties must prevail. This is a task that is not easy and it is long acting from the right person for said operation, who must act as advisor and mediator.
The coincidence and the trust that this advisor must achieve is not an easy task when trying to unify two different types of business forms that the parties possess.
Among the decisions to be made in a merger we can consider:
- The name and location of the merged company.
- Managing an organization chart.
- Form a new management.
- Managing style.
- Nominating business areas.
- Work equipment and its modifications.
- Deciding the active markets, form work teams, and the resulting products.
- Planning of the new society, among others.
The regular process in an M&A
The typical process in an M&A transaction is a series of interconnected steps that guide the companies involved from the initial negotiation phase to the final integration. These transactions go far beyond the purchase or merger of assets: they also involve a deep analysis of financial, legal, and operational implications.
Now let’s briefly look at the most important moments of this shift in your business.
Approach between the parties
This process sometimes has the incorporation of two or more companies, which do not always merge easily. There are multiple factors that affect the appointment of professionals to carry it out, since they can have an endless number of reasons such as cultural, historical, and rivalries which hinder this work.
Obligations between client and advisor
Each of the parties presents an advisor. This person has a legal relationship with his client, agreeing the following points:
- Services to provide.
- Obligations of both parties.
- Form and work team.
- Tentative calendar.
- Present solutions in case of conflicts.
The parties
The parties will sign a Confidentiality Letter, committing that all information must be used for the business merger.
Advisors, lawyers, external managers, and representatives of different areas will contribute in a way that allows us to observe the strengths and weaknesses of both companies.
The advisor, with his professionalism, will mediate, avoiding annoying tensions among some of the parties to continue in the process.
First agreements
Different agreements will be adopted, exchanging shares of the merged companies for those of the new merged company. In all of this management, the advisor must bring the initial negotiation to a successful conclusion.
MOU (Memorandum of understanding)
You should keep in mind:
The object of the transaction and its price.
Commitments, conditions, and deadlines to consider.
With the signing of said letter, this stage ends, giving rise to the following ones, which will be the method of the closing of the operation.
Business Lawyers
At Markowicz International Law we have a team of business lawyers in Miami specially trained in mergers and acquisitions. If you are considering carrying out a merger or acquisition operation, we can advise and accompany you in each of the steps.
Miami has established itself as one of the most strategic location, as a gateway between Latin America, the Caribbean, and the United States, has fostered the growth of its economy and attracted a wide range of global companies seeking to expand their operations in the Americas.
In this context, the city has become an important hub for multinational companies, startups, and professional services firms, especially those operating in sectors such as banking, real estate, e-commerce, tourism, financial technology (fintech), and energy. This business diversity, along with a relatively favorable tax environment compared to other U.S. states, has made Miami an attractive destination for entrepreneurs and investors worldwide.
Are you going to miss your opportunity? Don’t stop now! Hire a reliable business lawyer today.