1. Which Approvals and Consents Could Block Your Acquisition?
Buyer-side review separates corporate authorization, contractual consent, and regulatory permission. Each may require different documents and action before closing.
Match Corporate Authority to the Transaction
Check ownership and governing records. In a stock purchase, the target generally retains its liabilities. An asset purchase allows specified assumptions and exclusions, but successor liability and statutory obligations may still apply.
For corporations governed by New York Business Corporation Law, §909 requires board and shareholder authorization for qualifying sales of all or substantially all assets outside the ordinary course. Formation law matters despite New York operations.
Check Contracts and Permits Separately
Asset transfers may trigger assignment restrictions. Stock purchases may trigger change-of-control provisions. Review the wording, exceptions, notices, and consent procedures.
A commercial lease review identifies landlord approval requirements. Separately, check whether permits require transfer approval, a new license, or an ownership-change notice. A purchase agreement cannot grant regulatory permission.
2. How Should Unresolved Findings Change the Purchase Agreement?
Unresolved findings should produce specific contractual responses. Legal review connects supporting records to required action, closing conditions, pricing, or loss allocation.
Separate Disclosure from a Promise to Fix
Representations state contractual facts, and disclosure schedules identify exceptions. Pre-closing covenants require specified conduct. Disclosure alone does not necessarily create a duty to fix a problem.
| Finding | Possible Negotiated Response | Evidence to Request |
|---|---|---|
| Required customer consent is missing | Consent as a closing condition | Executed consent covering the transaction |
| Secured debt remains outstanding | Payoff and release arrangements | Current payoff letter and release documents |
| A known tax exposure remains unresolved | Specific indemnity and agreed escrow | Tax records and documented escrow terms |
Assign deadlines and responsibility. Address how updated disclosures affect the buyer’s rights.
Distinguish Price Adjustments from Indemnification
A working-capital adjustment changes price under an agreed formula. Indemnification addresses covered losses under negotiated terms. Define cash, debt, working capital, accounting methods, objection deadlines, and dispute procedures without counting the same item twice.
Contract drafting and review also addresses claim notices, survival periods, caps, baskets, and escrow release. An indemnity has limited value without available funds. It cannot obtain a permit or bind a creditor.
3. What Must Be Completed before Funds Are Released?
Tie payment to required documents and conditions. Signing alone does not establish readiness to close.
Coordinate Payoffs, Releases, and Transfer Documents
Compare debt schedules with lien searches. Confirm payoff amounts, expiration dates, recipients, and security-interest release procedures. A payoff letter differs from a completed lien release.
For mergers governed by BCL §904, coordinate the Department of State filing and required follow-up county filings. Ordinary asset and stock purchases use different transfer documents.
Address Bulk Sales and Federal Review
For a qualifying bulk sale, the buyer must file Form AU-196.10 with the New York State Department of Taxation and Finance at least 10 days before payment or possession of business assets, whichever occurs first. Retain delivery proof. A stock purchase without a transfer of the target’s assets is not itself a bulk sale.
Review the department’s release or claim notice before paying the seller. A claim notice can require escrow handling, and a bulk-sale release does not necessarily remove existing tax liens on acquired assets.
Federal HSR review is separate. Transactions meeting applicable reporting requirements cannot close until the statutory waiting period expires or is terminated. Filing obligations depend on current thresholds, transaction facts, and exemptions.
4. Practical Pitfalls When Closing Issues Remain Open
Review conditions and waivers before payment. Deadline pressure can obscure the consequences of accepting unresolved risks.
Verify Final Documents
Draft consents, unsigned releases, and expired approvals do not establish completion. Confirm scope and signatures, then retain final documents and agreed exceptions.
Review Waivers and Earlier Commitments
Waiving a contractual condition may change the buyer’s ability to refuse closing or pursue a later claim. Examine the agreement before assuming those rights survive. A private waiver cannot remove a mandatory legal requirement.
Review binding LOI terms for confidentiality, exclusivity, and expense obligations that may continue if the acquisition stalls.
5. Frequently Asked Questions
Define fees and the client’s identity when arranging the engagement.
What Drives M&A Legal Fees?
Fees depend on structure, records, financing, regulation, and negotiations. Request a phased estimate covering assumptions, specialists, expenses, and budget revisions.
Who Is the Client When an Acquisition Entity Is Formed?
Identify whether the client is the acquisition entity, its parent, or another participant. Company representation does not automatically include investors or executives. Clarify the scope before requesting personal advice.
6. Request a Review of Your Proposed Acquisition
Bring the purchase agreement, ownership records, material contracts, debt schedule, and proposed closing date. Request a buyer-side review of outstanding approvals, contractual responses to unresolved findings, and documents needed before payment.
10 Nov, 2026
