Stock purchase, asset purchase, or merger
In a stock or equity purchase, the buyer acquires the company as a whole, including its history and liabilities, and contracts often stay in place unless they contain change-of-control clauses. In an asset purchase, the buyer picks the assets and liabilities it takes on, but contracts, licenses, and permits may each need to be transferred or consented to. A statutory merger combines entities under state corporate law and can be useful when there are many owners, though it usually requires board and owner approvals and in some cases gives dissenting holders appraisal rights. Tax consequences differ sharply between these structures, and buyers and sellers often prefer different ones for that reason. The structure is a negotiated point, not a formality.
From letter of intent to closing
Most deals move from a letter of intent through diligence, negotiation of the definitive agreement, signing, and closing, sometimes with a gap between signing and closing for approvals. Larger deals may require a federal premerger notification, and deals in regulated industries or involving foreign buyers can need additional government review. Sellers should prepare corporate records, material contracts, financial statements, employee information, and intellectual property documentation before buyers ask, since gaps found in diligence often lead to price cuts or special indemnities. Buyers should know what financing they need and on what timetable. Confidentiality agreements should be in place before sensitive information changes hands.
Planning your side of the deal
In a first consultation we learn what the business is, who owns it, what the other side has proposed, and what matters to you beyond price, such as employees, your future role, or the timing of payment. We then discuss which structure fits those goals, which consents and approvals are likely, and which terms usually carry the most risk, such as indemnification, escrows, and earnouts. Involving your accountant early helps model the after-tax result of each structure. A mergers and acquisitions transaction is easier to steer when these questions are settled before the letter of intent is signed, since many key points are harder to reopen afterward.
