Virtual General Counsel LLC
Virtual General Counsel LLC

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Services Throughout Denver And The Surrounding Areas

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Negotiating a small business merger

| Nov 5, 2018 | Mergers & Acquisitions |

There are many business dealings that take place every day in Denver and throughout Colorado. One of the most complex transactions a business can undertake is a merger and acquisition. A merger takes place when two or more businesses combine, creating a single entity. Mergers allow both parties to benefit financially from their respective strengths and resources. There are numerous issues that will need to be negotiated to make the merger successful.

The companies merging will need to determine what legal structure the new entity will take. Will it be a corporation? A limited liability company? Or something else? The parties to the merger will also need to decide on how to combine management, executives and their respective boards of directors. Sometimes, to avoid redundancies, some workers may need to be let go.

The companies will also need to decide how to combine their respective stock options. This is important, as generally one of the merging business’s stock is of a greater value than the other’s is. Also, the newly-formed entity will need a name. Sometimes, the new entity will take the name of one of the merging partners, or it may combine the names of the merging partners. Also, it is possible for the entity to take on an entirely new name altogether.

These are only a few of the many issues that will need to be resolved when two companies merge. Mergers are complex legal transactions. Many businesses negotiating a merger benefit from getting the right information about legal options that will allow the business to make decisions that are in its best interests.