Entity & Business Acquisitions & Dispositions

In the modern era, business acquisitions and dispositions happen all the time. The former involves one corporation purchasing another, either by buying its shares or its assets. Disposition, alternatively, is the process by which one corporation sells its assets (may include shares and/or equity position) to another.

In most cases, acquisitions and dispositions usually go hand in hand. Of course, after any acquisition, assets will be transferred from one corporation to another. That may include physical assets, property, and equity.

The complex nature of such a transaction requires the legal guidance of an experienced business lawyer. Regardless of how well-laid the plan is, irrevocable harm could be caused by having even with just one or two conditions misconstrued.

Whether it is the method of valuing the assets in question, what to do with the employees of the company being acquired, restructuring the business, or perhaps a lack of synergy between the two corporations; a lawyer can provide guidance in navigating through the issue.

The Legal Aspect of Acquisitions and Dispositions

So what exactly does an attorney do in the business acquisition and disposition process? A lot actually. Your lawyer will be involved from the moment of conception, throughout the completion of the acquisition or disposition. Here are the specific functions:

Preparing companies for the transaction

This involves ensuring that corporate formalities are adhered to in the lead up to the acquisition. The lawyer may have to initiate or terminate third-party relationships, identify areas of risk to mitigate, and deter attempts of a hostile takeover among other things.

Structuring the transaction

In this case, the lawyer may be tasked with the responsibility of developing a viable plan to follow during the business acquisition process. Creating an implementation checklist would happen at this stage.

Drafting legal documents

There is no shortage of paperwork when it comes to a business acquisition or disposition. They include: engagement letters, exclusivity agreements, letters of intent, bills of sale, transaction agreements, escrow agreements, confidentiality agreements, disclosure schedules, covenants, and warranties. It would be the role of the acquisition lawyer to correctly draft and file all these documents, together with press releases (in conjunction with the PR department). 

Ensuring due diligence is followed 

As you might expect, a business acquisition and disposition is a complex process. It needs to be handled within the confines of all relevant laws; otherwise, both corporations may be subject to legal action. It is the responsibility of the attorney to ensure that every step taken is not only in line with the companies’ bylaws, but also conforms to the relevant government laws. They include county, state and federal corporate laws, tax laws, fiduciary duties, and securities exchange standards.

Negotiating

Having an attorney on your side can help a great deal when it comes to negotiations, both with the other company as well as third parties like lenders, suppliers, and employees coming aboard.

Advising a conflict resolution 

The attorney will also advise the directors, shareholders, management teams and employees of the buying and selling companies about their rights and responsibilities.

Managing other attorneys 

Because of the large scope and complex nature of an acquisition and disposition, a business may decide to involve specialist attorneys in the process. For example, it may bring in a tax lawyer, bankruptcy lawyer, intellectual property lawyer, employment lawyer, criminal lawyer, contract lawyer, or any other specialist lawyer deemed necessary. In that case, it would be the role of the in-house attorney to coordinate all the other attorneys and integrate their efforts.

Entity and Business Acquisitions & Dispositions at Versant Law

At Versant Law, our lawyers are highly skilled in representing companies that are selling or purchasing assets for corporations of all sizes and sophistication.

Our attorneys offer viable solutions to any issues that may arise regarding business structure, securities, taxation, financing, and implementation. Contact us today to learn more about our entity acquisition and disposition services. We may be able to help regardless of where you are in the process.