Chicago Area Merger and Acquisition Attorneys
Lawyers Assisting With Due Diligence and Other Legal Issues During Business Mergers in Illinois
It is common for one business to acquire another or for two businesses to merge and form a new company. However, in these types of business transactions, it is crucial to follow the proper procedures. Failing to do so can lead to confusion among management and employees, struggles with the day-to-day operation of the new business, or financial issues that could ultimately lead to business failure. By working with a business law attorney from the beginning of a merger or acquisition, owners, partners, and shareholders can ensure that the transaction will be completed properly and that the new business will be ready for ongoing success.
At The Gierach Law Firm, LLC, we help businesses of all sizes and types address legal issues and create winning strategies. With more than 30 years of experience, Denice Gierach and the team of attorneys at The Gierach Law Firm, LLC can help your business understand what will need to be addressed when completing a merger or acquisition. We will work with you to craft a plan that will ensure that you can operate your business smoothly and successfully in the years to come.
Issues to Address During a Merger or Acquisition
Mergers involve the combination of two or more companies into one single company, while acquisitions will see one company purchasing the stock or assets of another business. While there are some mergers in which the owners of each company will share an equal stake in the new company, the owner, partners, or shareholders of one company will usually be the majority shareholders of the new company following a merger.
Determining how to combine the structure, personnel, and operations of multiple companies into a single organization can often be a complicated process. To ensure that all parts of the new business will work together properly and that the company can operate profitably, the following issues will need to be considered during a merger or acquisition:
- Due diligence – A proper review must be performed of each company’s finances, records, assets, debts, and any other relevant information. By gathering this information, identifying any risks or liabilities, and understanding the issues that may affect the transaction or the continued operation of the company, stakeholders can not only ensure that no unexpected surprises will arise during a merger or acquisition, but they can also plan a successful business strategy for the new company.
- Business structure and corporate governance – A merger or acquisition may require the restructuring of both businesses and the formation of a new business entity. In addition to completing the requirements for restructuring a company, new rules, policies, or procedures may need to be put in place to address the roles and responsibilities of the company’s board, owners, shareholders, and/or officers.
- Contract review and renegotiation – All existing contracts for the companies involved in a merger or acquisition should be thoroughly reviewed to determine how they will apply to the new company and address the parties’ rights and obligations. If necessary, contracts may need to be renegotiated to ensure they provide the new company with the proper protections and benefits.
- Employees – A company’s owners or partners will need to determine whether they will retain existing employees, create new roles, or make adjustments to the company’s organization structure following a merger or acquisition. Employment contracts or policies regarding independent contractors may need to be updated, and the new company may need to make changes to company handbooks or create new policies and procedures for employees.
- Tax planning – The timing of a business transaction can affect how taxes will apply to the sale, and structuring the new company properly can ensure that tax burdens are minimized. By working with an attorney and accountant, a company’s partners or shareholders can be sure they fully understand how taxes will apply to a merger or acquisition, and they can plan the most beneficial tax strategy.
Contact Our DuPage County Business Merger Lawyers
As an attorney, business, owner, and Certified Public Accountant, Denice Gierach understands the legal and financial issues involved in a merger or acquisition. The team of business law attorneys at The Gierach Law Firm, LLC can make sure you understand your rights and obligations during these types of transactions, and we will help you identify any concerns and work with you to build a strategy that will make sure your new business will remain profitable. To set up a consultation, contact us in Naperville at 630-756-1160 or call our Hoffman Estates office at 847-519-0505.