{"id":4453,"date":"2016-04-04T10:47:30","date_gmt":"2016-04-04T15:47:30","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/business-finances\/mergers.html"},"modified":"2024-08-19T13:15:01","modified_gmt":"2024-08-19T18:15:01","slug":"mergers","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/business-finances\/mergers.html","title":{"rendered":"Business Mergers Law"},"content":{"rendered":"\n
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Business Mergers Law<\/h1>\n
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Created by FindLaw’s team<\/a> of legal writers and editors<\/i><\/p>\n\n | Last updated\n

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The process of two or more companies joining together to form a single business entity is referred to as a merger. While the term "acquisition" is often used when a much larger company buys a smaller one, any transaction that combines separate businesses is technically a merger. FindLaw’s section on Mergers includes sample questions to ask the intermediary handling your business merger, forms and contracts used for business mergers, real-life examples of asset purchase agreements and stock purchase agreements and more related information.<\/p>\r\n

Purchasing a Business<\/h2>\r\n

There are a few different ways that an existing business can be purchased. Your deal to purchase a business can be set up as a stock transaction, asset transaction, or a merger. Regardless of the type of business purchase that it is, there is certain information \u2013 mainly about the finances and business operations \u2013 that you should request and review before purchasing a business.<\/p>\r\n

Before purchasing a business, it’s important to confirm that the business is in good standing. This information can be obtained by receiving copies of active status reports in the state the business is incorporated in, preferably for the last three years. It’s also a good idea to get a list of all the locations where the company is authorized to do business. You should also review the company’s articles of incorporation, bylaws, and minute book.<\/p>\r\n

Probably the most important documents and information you will need to review are the financial documents of a business. This includes several items, including balance sheets, tax returns, and schedules of accounts receivable, payable, and inventory. The financial information of a company also includes any real estate owned by the business as well as physical assets.<\/p>\r\n

There are other documents and information that are relevant if you will be purchasing an existing business. You should find out if the company has any intellectual property, such as patents, trademarks, or copyrights. You should also find out if there are any claims against the company’s intellectual property, such as a patent infringement lawsuit. You should also get a list of employees and employee benefits as well as a list of existing and potential customers.<\/p>\r\n

Questions for Intermediaries<\/h2>\r\n

Hiring an intermediary to facilitate a merger can be a very helpful asset. If you decide to hire an intermediary, it’s important to confirm that he or she is qualified to assist you. There are various pieces of information that you can acquire from an intermediary before choosing one. It’s important to find out the education and experience that the intermediary has had in the past. You can ask questions about past mergers the intermediary has taken part in as well as for some references of companies they have worked with previously.<\/p>\r\n

Hiring a Business and Commercial Attorney<\/h2>\r\n

Before you decide to be involved in a merger, it’s important to review all pertinent information, which can be a long and tedious process. If you would like assistance with a business merger or have questions about asset or stock purchase agreements, it’s in your best interest to contact a business and commercial attorney near you.<\/p>\r\n<\/div>\r\n

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