Ideally, a company will grow to the point that it outsells and overshadows competitors in the marketplace. However, with other companies striving for the same goal, it may be necessary to join together for a shared purpose.
The most common means to do this is to enter into a merger or perform an acquisition. A Virginia mergers and acquisitions lawyer could help companies considering these changes to their corporate structure. At Sparks Law, our experienced attorneys are here to evaluate the need for a change, work to negotiate favorable terms, and take the necessary legal steps to effectuate a merger or acquisition.
A merger or acquisition allows two or more separate business entities to become a single company. These acts are often the product of months or years of negotiation. Additionally, they must meet the legal criteria set down in Commonwealth law.
The formation of a corporation involves many steps. These include submitting an application with the Secretary of State, formulating articles of incorporation, and issuing stock. A merger or an acquisition essentially forms a new corporation. As a result, any application for these legal steps requires the new leadership of the proposed entity to submit new paperwork to the Commonwealth.
According to the Code of Virginia § 13.1-716, as applied to mergers, these legal steps can include:
Under the law, an acquisition must follow the same procedures as a merger. To this end, the terms of the agreement will buy out the sold company’s shares and leave the leadership out of a new corporate structure. A local mergers and acquisitions attorney could provide more information about the legal requirements for changes in corporate structures that involve combining with or buying out another company.
Performing the legal steps involved in merging or acquiring companies is a requirement under the law. All mergers and acquisitions must follow this process to the letter.
By contrast, the exact terms that determine the rights of all parties after the process are open for negotiation. Parties attempting to acquire another company may negotiate on price, whether the leadership of the old company can play a role in new operations, and the transfer of intellectual property. Similarly, mergers must answer questions concerning the transfer of stock, which physical locations will remain operational, and a new board of directors.
Another way in which a Virginia mergers and acquisitions lawyer may be able to help is in representing a company’s interests during these negotiations. The outcome of these negotiations will form a legally binding contract, and the parties are bound to the terms for the foreseeable future. Approaching them with confidence and a clear plan will serve to protect a company’s future interests.
Persistent growth is key to turning regular profits in the business world. In some situations, this may allow for the acquisition of a rival or another company with valuable intellectual property. In other cases, it may be advisable to join with another corporation to carve out a segment of the marketplace.
If this decision sounds right for your company, a Virginia mergers and acquisitions lawyer may be able to help. At Sparks Law, our attorneys could work to explain the legal process behind these changes and take the lead in negotiating favorable terms. We could then submit the necessary paperwork to the Commonwealth that makes the change official. Reach out today to discover more about growing your company through a merger or an acquisition.