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What Role Does a Lawyer Play in Mergers & Acquisitions?

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Mergers and acquisitions (M&A) occur when two or more companies combine their businesses and assets. M&A encompasses a range of different business transactions, including consolidations and purchase of assets. Often, businesses will combine when they have complementary strengths and weaknesses. The idea is to improve synergy and increase market performance.

All that sounds like a great deal of legal drama. This is true. These transactions require a lot of paperwork and understanding of business law. For this reason, lawyers play a critical role in M&A transactions.

Why Do Businesses Merge?  

Mergers and acquisitions play an important role in economic growth and development. Sometimes businesses will acquire seemingly unrelated businesses in an attempt to reduce an impact on profitability. This is referred to as diversification.

Mergers can help businesses grow in their particular market. For example, a soda company may buy a smaller soda company. This allows the smaller company to produce and sell more of its product to consumers. It also allows the larger company to grow its share of the market without doing any work for itself. Instead, the company buys the smaller company at a price.

M&As can also be useful in eliminating competition within a particular market. The acquiring company buys a smaller company before it can become large enough to become a threat within the market. These acquisitions usually come at a large price.

Role of a Lawyer  

Business lawyers are skilled in business law and business litigation. Anytime you are dealing with complex business situations, you should seek the help of a lawyer. Attorneys can help advise both the buyer and seller on important legal issues, which is why each party should have a lawyer of their own. Each lawyer should have a deep understanding of nuances in the law that might pertain to the transaction.

Attorneys and their clients will work together to work out the details of the agreement and to mitigate losses. M&A agreements often carry with them the potential to pose a serious risk to both businesses. Businesses can mitigate these risks by allowing their lawyers to work on the agreement without getting in the way.

Other issues may arise during the course of the transaction. You might run into problems such as environmental concerns, securities, banking, taxes, and more. The lawyers should be equipped to help both parties navigate these areas and make the transaction smoother. They can also help the companies figure out the tax implications of an M&A and create new tax plans.

Seek the Help of a Fort Lauderdale Business Litigation Attorney  

If your business is in the process of a merger, you may not be equipped to handle all of the complex legal work. That is where a Fort Lauderdale business litigation lawyer comes in. You need to make sure everything goes as smoothly as possible and that your deal remains in compliance with the law. The lawyers at the office of Edward J. Jennings, P.A. know how to help your business succeed. We are here to provide the support and knowledge you need to complete your merger. Contact us today to schedule an appointment and find out more about how we can help.

Resource:

investopedia.com/ask/answers/why-do-companies-merge-or-acquire-other-companies/

https://www.ejj-law.com/should-you-incorporate-your-florida-business/

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