If you are considering a merger or acquisition of another company, you may be wondering whether you need to hire a corporate lawyer. It is a good idea to at least consult with a corporate lawyer to ensure that the transaction is structured properly and that all of the necessary documents are in place. Here are five specific reasons why you should hire a corporate lawyer when merging two business operations:
1. To Ensure the Transaction Is Structured Properly
One of the most important aspects of any merger or acquisition is the structure of the deal. There are many different ways to structure a deal, and the right structure depends on the specific circumstances of the transaction. For example, if one company is acquiring another company, the deal can be structured as an asset purchase, a stock purchase, or a merger. Each of these structures has different tax implications and can result in different levels of risk for the parties involved. A corporate lawyer can help you determine the best structure for your particular transaction and negotiate the terms of the deal with the other party.
2. To Draft and Review the Necessary Documents
Once the deal is structured, there are a number of important documents that need to be drafted in order to consummate the transaction. These documents include the purchase agreement, shareholders' agreement, employment agreements, and non-competition agreements. A corporate lawyer will draft these documents and ensure that they protect your interests and limit your liability.
3. To Conduct Due Diligence
Due diligence is the process of investigating a company before entering into a transaction. This investigation usually includes a review of the company's financial statements, legal documents, and business contracts. A corporate lawyer will be familiar with what due diligence should entail and can help you ensure that you are getting what you expect from the deal.
4. To Handle Regulatory Approval
Depending on the type of business you are in, there may be regulatory approvals required in order to consummate the transaction. For example, if you are acquiring a bank, you will need to obtain approval from the Federal Reserve Board. A corporate lawyer can help you navigate the regulatory approval process and ensure that all of the necessary approvals are obtained.
5. To Manage Post-Transaction Integration
Once the transaction is complete, there is still work to be done in order to integrate the two companies. This work includes drafting new employment agreements, transferring assets, and consolidating financial statements. A corporate lawyer can help you manage the post-transaction integration process and ensure that it proceeds smoothly.
Hiring a corporate lawyer when merging two business operations is a smart move. A corporate lawyer can ensure that the transaction is structured properly, prepare and review all of the necessary documents, negotiate with the other side, manage the due diligence process, and handle any post-transaction issues that may arise.