Your business has grown to the point that it is beginning to generate a lot of interest in the business community. There is even another business owner who is has approached you about merging the two operations and capturing a larger market share. On the surface, it sounds like a straightforward project, but there are a lot of details to settle. Here are five of the reasons why you want a lawyer to present your interests during a business merger.
Is the Merger Possible?
Your lawyer can determine if attempting such a union would be in violation of any current laws or governmental regulations that apply to your industry. If there are no such violations, the discussion can continue. When attempting to merger would create significant legal issues, backing away is a smart move.
Researching the Other Party
Your lawyer has the resources to conduct a thorough background check on the other party. The goal is to ensure that the prospective partner provides accurate and complete information. This will go a long way toward helping you avoid getting involved in an unfortunate situation.
Negotiating Terms
What will you gain from the merger? Along with the financial benefits, you may want to ensure that key employees in your organization will not be terminated for at last a year after the merger takes place.
Will you become a stockholder and retain a significant interest in the operation? Perhaps you will function as the new CEO or serve as a member of the Board of Directors. These and other details need to be worked out now rather than later.
A Binding Payment Schedule
It is not enough to decide that you will receive so much in cash and so much in stocks issued by the newly merged entity. There must also be a concrete schedule for receiving those payments. You lawyer can help you understand the benefits of scheduling those payments so they have the most favorable impact on the tax debt you will owe.
Drafting and Filing Paperwork
A lawyer at a firm like Carter West will know what is needed to document the terms agreed upon by both parties. If the companies are based in different states, the lawyer will also take steps to ensure the right documents are filed with each jurisdiction. Since there is a specific order that must be followed with the filings, your lawyer will work closely with the legal counsel for the other party to ensure everything is manage in a logical sequence.
If merging your business with another seems like a good idea, get legal counsel first. From helping you make a wise decision to ensuring the legal requirements are met, having a lawyer by your side is the only way to go.
