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Mergers & Acquisitions Questions & Answers

Q: My father wants to take over a printing business and wants me to put the business in my name. He has an investor friend

1 Answer | Asked in Business Formation, Business Law, Family Law and Mergers & Acquisitions on
Answered on May 23, 2017

First as the owner you will be responsible for all debts and operations of the business. So to start, the business should be put in a corporation or LLC. You can be the sole manager and thus have control of the business and the investor and your father can own percentages of the business as well. I think you need to speak to an attorney and make sure you are protected so that this business does not put you in bankruptcy if something goes wrong. If the business leases property, you may need...
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Q: I'd like to buy a business in my town - should I buy it as a corporation?

3 Answers | Asked in Mergers & Acquisitions for Pennsylvania on
Answered on May 16, 2017

You should buy only the assets of the business, not the stock or membership interest of the entity that currently owns the business. Most like you should form your own entity - either a corporation or limited liability company to own the business. You should consult with an attorney to advise you. Depending on the type of business, it is likely you will want to own the business as a corporation or LLC.
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Q: I would like to buy a small business in my town - should I form a corporation to do that?

2 Answers | Asked in Mergers & Acquisitions for California on
Answered on May 12, 2017

I generally advise people who operate businesses to form a LLC or Corporation to limit any personal liability related to operating the business. It is not always necessary, but generally a good idea.
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Q: Equity Escrow works in M&A

1 Answer | Asked in Mergers & Acquisitions for Illinois on
Answered on May 11, 2017

First, hire a local experienced business attorney to assist you. This is a complex transaction and the terms of the deal need to be detailed closely.

If you are selling shares held by you or the companies treasury shares, then you need an independent escrow of the shares. If the company is a LLC or Sub-S corporation then there is an issue of the distribution of income or if a C-Corp the use of dividends as well. I would provide that a percentage of the distributions in cash to the...
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Q: If I bought a company last year and found out recently that the prior owner had left behind environmental contamination,

1 Answer | Asked in Mergers & Acquisitions for Michigan on
Answered on May 5, 2017

Did the owner disclose the existence of the contamination issue? Was he aware of it? If you own the property you are responsible, but can seek reimbursement from the prior owner especially if he caused or was aware of the contamination. I would contact an attorney in your area who is familiar with environmental law and has a corporate partner if possible to review your agreements and to determine the extent to which you can seek indemnity from the prior owner.
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Q: If you acquire a company are you required to honor all of the current owner's existing vendor contracts?

2 Answers | Asked in Mergers & Acquisitions for New Mexico on
Answered on May 5, 2017

If you buy the stock of the company, the vendor contracts will continue to be contracts of the company you purchased and will be in force according to their terms. If you buy the assets of the company, the vendor contracts will remain with the seller and you would be free to deal with vendors as you please. Of course, there are many other considerations to take into account when deciding whether to purchase stock or assets.
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Q: If you acquire a company do you have any obligation to retain their independent contractors?

1 Answer | Asked in Mergers & Acquisitions for Hawaii on
Answered on Apr 28, 2017

If you purchase the stock of a company you are obligated to honor existing contracts. If you buy the assets of the company you can purchase the assets and limit the obligations and contracts you accept in the purchase. If the independent contractors have contracts, you have to honor those contracts. If they have termination provisions, then you or the current owner of the company can terminate them. I would have the independent contractors terminated and a release obtained by the Company...
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Q: I signed a covenant not to compete, but I was laid off due to a company buy-back. Is it still enforceable?

2 Answers | Asked in Contracts, Mergers & Acquisitions and Employment Law for New York on
Answered on Apr 27, 2017

Many non-compete clauses are invalidated because they're too broad. Have a lawyer look at it.

See: http://www.aeesq.com/business-law/employment-lawyer/

More details are necessary to provide a professional analysis of your issue. The best first step is an Initial Consultation with an Attorney. You can read more about me, my credentials, awards, honors, testimonials, and media appearances/ publications on my law practice website, www.AEesq.com. I practice law in CA, NY, MA, and DC...
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Q: If companies that are based in different states merge, how do you decide which state's law should apply to the merger?

3 Answers | Asked in Mergers & Acquisitions for New York on
Answered on Apr 21, 2017

The merger agreement dictates which state laws apply. As to that decision it depends if it is a merger of equals or one is entity will remain in control. The decision should be based on what is best for the merged entity.
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Q: When two companies merge, do employees get to keep their existing benefits?

1 Answer | Asked in Mergers & Acquisitions for California on
Answered on Apr 21, 2017

Any contractual obligations of either employer should be upheld, despite any merger.

See: http://www.aeesq.com/business-law/employment-lawyer/

More details are necessary to provide a professional analysis of your issue. The best first step is an Initial Consultation with an Attorney. You can read more about me, my credentials, awards, honors, testimonials, and media appearances/ publications on my law practice website, www.AEesq.com. I practice law in CA, NY, MA, and DC in the...
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Q: What is the best way to handle employee questions before an acquisition?

1 Answer | Asked in Mergers & Acquisitions for New York on
Answered on Mar 31, 2017

There are a variety of ways to handle the information depending upon whether there will be lay-offs or not. If some people are going to lose their jobs, then you need to prepare yourself and them for that event. If no one is being fired or laid-off, then the matter is much easier.

However to give a better response it would be helpful to know how many employees and locations are involved. Before the Merger key employees will need to know such as your CFO and people who will be...
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Q: What sorts of costs are usually associated with buying a company?

1 Answer | Asked in Mergers & Acquisitions for New York on
Answered on Mar 11, 2017

This varies wildly based on the type of company. Your question is too vague. More details are necessary to provide a professional analysis of your issue. The best first step is an Initial Consultation with an Attorney. You can read more about me, my credentials, awards, honors, testimonials, and media appearances/ publications on my law practice website. I practice law in CA, NY, MA, and DC in the following areas of law: Business & Contracts, Criminal Defense, Divorce & Child Custody, and...
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Q: When is the best time to secure an NDA when discussing the possible acquisition of my company by another?

1 Answer | Asked in Mergers & Acquisitions for New York on
Answered on Feb 17, 2017

Usually about the time you are set to begin any serious discussions and/or exchange of information, and definitely prior to conducting due diligence.

The materials provided herein are for informational purposes only and do not constitute advertising, solicitation or legal advice. Consequently, you should not rely upon it as advice about specific legal problems because it does not constitute the rendering of legal advice and does not create any attorney-client relationship. If you need...
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Q: is it illegal for a news company to distribute fake news? Is it illegal for private individuals to distribute fake news?

1 Answer | Asked in Communications Law, Constitutional Law and Mergers & Acquisitions for Michigan on
Answered on Feb 15, 2017

No and no. Individuals may have a right to sue and recover for libel/defamation however if named in and injured reputationally by fake new stories.
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Q: Transferring ownership of single member LLC from father to son in Ohio, what needs to be done for this to happen?

2 Answers | Asked in Business Law, Contracts and Mergers & Acquisitions for Ohio on
Answered on Feb 1, 2017

The IRS assigns EINs to the legal entity, not individual member(s). As a single-member LLC, a sales agreement transferring your LLC shares (membership units) to your son should be sufficient. You should ensure as due diligence that the company's contracts with vendors, customers, etc., are all in the name of the LLC — if not, assign them first. Please note there may be federal income and/or gift tax implications if this transfer is for something other than fair market value and does not pass...
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Q: where can I find form 904- merger the foreign corporation into domestic corporation, new york?

1 Answer | Asked in Mergers & Acquisitions for New York on
Answered on Jan 27, 2017

What you are probably looking for is a Certificate of merger (or consolidation). You should contact a business attorney for assistance.

The materials provided herein are for informational purposes only and do not constitute advertising, solicitation or legal advice. Consequently, you should not rely upon it as advice about specific legal problems because it does not constitute the rendering of legal advice and does not create any attorney-client relationship. If you need legal or other...
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Q: Are there any good reasons to choose a merger over an acquisition if it's my company that may be bought out?

1 Answer | Asked in Mergers & Acquisitions for New York on
Answered on Jan 27, 2017

There are tax considerations involved. These vary depending on the whether the transaction is a merger or acquisition, asset sale or stock sale, and the types of entities involved. You should speak with a qualified M&A attorney and an accountant or tax attorney for tax advice.

The materials provided herein are for informational purposes only and do not constitute advertising, solicitation or legal advice. Consequently, you should not rely upon it as advice about specific legal problems...
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Q: Does Oklahoma support the Enhanced Life Estate Deed? Can a Enhanced Life Estate Deed be completed without a lawyer?

1 Answer | Asked in Estate Planning and Mergers & Acquisitions for Oklahoma on
Answered on Jan 4, 2017

Hi, thanks for your question. In Oklahoma, we call this a Transfer-on-Death Deed. Our statutes specifically authorize it. I cannot speak for other attorneys. However, I typically do estate planning matters on a flat fee - which varies depending on the nature and complexity of the documents I am preparing. This could range anywhere from a couple hundred dollars to $2000 or more. Obviously, my fee would be minimal for a Transfer-on-Death Deed. That said, I recommend consulting with knowledgeable...
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Q: I am moving my s corporation to NY from NJ. Should I do it through Merger and then dissolve NJ Company?

1 Answer | Asked in Business Formation, Contracts and Mergers & Acquisitions for New York on
Answered on Dec 30, 2016

Unless you have some undisclosed reason for doing it, there is no reason to do this. Just register the company as a foreign corporation in NY. It is a few hundred dollars.
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Q: Could I be sued for a board game I created that doesn't have a choking hazard warning if I sold the business?

1 Answer | Asked in Business Formation, Business Law, Gaming and Mergers & Acquisitions for Utah on
Answered on Oct 18, 2016

It's hard to answer your question completely without more information. That being said, if the game is no longer yours to license, and you are merely selling the game wholesale to another seller, then I would suggest an indemnity clause in the purchase contract requiring the seller to assume that liability and to cover any legal fees you may incur in defending against suit in the future. There may be other steps required as well depending on the specifics of your situation.
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