Due to the globalization of markets, intensification of competition in the business world, the beginning of mass privatization, intensive development of private and mixed forms of companies, Mergers and acquisitions have become quite common. These days, companies agree to Mergers and acquisitions to make changes in their business operations, both quantitatively and qualitatively within a short period of time. But, the bitter truth is that most of the M & A transaction fail to get the predictable success and all those companies that go under transaction suffer a great loss in the long run.
If you handle a company or a business organization and mulling to strike an M & A transaction, it will be advantageous for you to seek the legal consultation from mergers and acquisition lawyers. They can help you in many ways. Some key points are detailed here below. Just wade through it carefully. You will be able to know how helpful they are in M & A transactions:
1. To Prepare Grounds For Mergers And Acquisitions
In simple words, Merger is a process in which the assets and operations of the two different companies are joined and controlled by the management of a new company which comprises shareholders, employees, investors, CEOs, Managers, etc, of the original companies. On the other hand, an acquisition is a process in which one company obtains control over another by acquiring a controlling stake with the right to vote.
Mergers and acquisitions of companies or business firms are regulated by different laws. Most of the companies are unfamiliar with the rapidly changing laws in this regard and they end of making mistakes unknowingly which may invite problems from the law enforcement agencies and the government in the long run.
Therefore, they must hire law firms (such as Ahlawat & Associates) to conduct Mergers and acquisitions as per the existing law and avoid legal problems easily and quickly. Law firms have expert lawyers that can help you to prepare the terms and conditions for M & A transactions keeping its legal provisions in mind.
2. Company Valuation For Mergers And Acquisitions
As companies go under M & A transactions for development, improving competitiveness, increasing profitability, it is very important for them to evaluate the revenues and profits of the targeted companies, their production capacities, existing property rights to real estate objects, trademarks, intellectual property, licenses, client base, etc. It helps them to adequately determine the actual value of the company and suggest a legitimate price for M & A transactions. Financial and legal consultants, auditors, and independent appraisers can help you a lot in this regard and determine the actual worth of it by evaluating its sales, income tax returns, the value of properties, etc.
3. Protection From Legal Action Taken By Employees
Whenever Mergers and acquisitions take place, a newly created company fires several employees from the job to cut the operational cost, save the resources and use them for the advancement of the company. Always keep in mind that unlawful termination of employees can trigger several litigations against your company and dilute the future business opportunities up to a great extent. It will be good for you to find legal assistance from Mergers and Acquisition Lawyers and treat the incoming and outgoing employees as per the law. This will help you find the best talent for your company and discard the inferior ones without facing any legal trouble.
4. Mediation With Rival Parties
When companies go for Mergers and acquisitions, the business interests of various parties are affected, such as shareholders, investors, partners, CEOs, etc. It will be very difficult for a company to get involved in legal battles against all these parties and register victory without the appropriate preparation of cases. That is why, lawyers generally arrange the face-to-face meeting of these rival parties, discuss the point of discords and try to reach out a respectable solution through dialogue, mediation, and consultation. It is beneficial for all parties as they are able to solve their business disputes without getting involved in prolonged legal battles and wasting their resources.
5. Determination Of Tax Liabilities
When the size and business of your company grow after signing an M & A transaction, tax liabilities are also increased. But, every businessman wants to pay the minimum tax so that he can make progress in the business and expand it fuhrer. A lawyer can help you to easily determine your actual tax liabilities as per the law and save some of your resources.
Final Words:
Mergers and acquisitions are frequently taking place in today's highly competitive business world wherein all companies tend to reduce their operational cost, increase their business volume and capture the bigger share in the market. A lawyer can help to complete an M & A transaction successfully and make your long awaited business dreams come true by providing the right legal consultation.
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