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How you structure your merger or acquisition matters

On Behalf of | Dec 14, 2020 | Uncategorized

Businesses are always looking for ways to reduce costs and expand their client base. This isn’t an easy endeavor, of course, especially given the fact that competition is often fierce. Yet, there are almost always options available to businesses, it’s just a matter of identifying which options are the most viable and the most likely to succeed. For some, that means engaging in targeted marketing while streamlining their operations, but for others a merger or acquisition might be the best path forward.

Know how to structure your deal

On its face, a merger or acquisition might seem pretty straightforward. In reality, though, these business transactions are extremely detailed and quite complicated. One of these areas is the structure of the deal itself. For example, do you plan to acquire another business by purchasing its stock? Or do you merely want to buy its assets?

The difference between the two can be quite stark. For example, if you decide to acquire through stock purchase, then you might find yourself stuck with the liabilities of the acquired business, which could be quite significant. An asset purchase, on the other hand, may allow you to more easily negotiate a way around liability transfer.

There can be tax consequences that stem from the way that you structure your merger or acquisition. For example, a stock or asset purchase is probably going to be taxable, which could be quite costly to you and your business. Some kinds of mergers, though, might end up being tax-free.

There’s legal help for all of your merger and acquisition problems

To successfully engage in one of these business dealings, you really need to know the law and how to develop a legal strategy that furthers your business interests. These are highly specialized areas, though, even for those who are already well versed in the business world. That’s why qualified legal professionals with extensive experience in these matters stand ready to assist you in reaching your goals.