Shigo Law Firm, P.A., attorneys are experienced in representing both surviving and non-surviving companies during a merger. We understand the complexities involved such as converting shares and renaming the business, and we know that a merger can be a window to an exciting new opportunity for the business owners involved. That is why we strive to provide you with the best counsel while protecting your rights during any business merger in Gainesville or Ocala, Florida.
Combining Companies in North Central Florida
There are many reasons why a merger might be right for you business. Whatever your reasons, we advise that business owners on both sides of the merger obtain counsel. This will keep you both protected while also making sure that all the details and fine print of the merger are covered. You don’t want to leave yourself open for litigation in the future, and you want to make sure that every situation is accounted for so that you can avoid disputes later. Even if your business is merging with someone whom you trust, like a friend, neighbor or relative, negotiations can get heated quickly. Don’t let someone take advantage of your business through a merger agreement.
During a merger, at least two companies agree to combine their liabilities and assets. There are typically two companies taking place in the merger — one company is considered the “surviving” company while the other is called the “non-surviving” company. The shares of the non-surviving company are converted into the surviving company’s shares, and the shareholders of the former become shareholders of the latter.
A merger generally results in a new company name, with a new structure and direction for the company. That decision is up to the parties involved in the merger agreement. It can be beneficial for two companies to shed their brand image and form a new company, but the owners should agree on the new brand. Sometimes problems can arise in forming the new company, and if that happens, our attorneys can calm the issues and aid in negotiations while protecting your rights in the agreement.
The Complexities of Business Mergers
Hiring a business law attorney can come in handy when you’re faced with the large amount of paperwork and research that is involved in a business merger.
The first step in preparation is to obtain all of the other company’s financial records and to examine the company’s legal status. We refer to this process as due diligence. It is imperative that you vet the other company fully and completely. A hidden lawsuit or previous bankruptcy claims could turn into a devastating situation for your company or the newly formed business.
You should also be aware that some mergers can be considered illegal under the anti-monopoly laws in the United States. The Federal Trade Commission Bureau of Competition and the U.S. Department of Justice regularly monitor mergers in order to halt actions that may violate federal law. A qualified business merger attorney can help you navigate the complexities of anti-monopoly laws and keep you on the good side of the FTC. The FTC also makes sure that consolidations adhere to fair competition and antitrust laws. The Securities and Exchange Commission (SEC) can also get involved if they believe illegal actions are occurring concerning devalued stocks or insider trading.
If you’re considering merging your business in the North Central Florida region, contact our attorneys at Shigo Law Firm, P.A. We’re committed to the workforce of Gainesville and Ocala, and we want to see your new venture grow to help support our economy. But in order to have a successful new business, you need a successful, effective merger.