Role of corporate merger and acquisition lawyer – Guest Post

The modern system of the judiciary has made it very easy for the subjects of any country to have access to justice. With anything going wrong, you get to knock on the door of the judiciary and fight for your rights. It is for this reason that a constitution is designed to help governments serve their subjects, and help the common masses know their rights living in a country. There are laws literally about everything. From the violations of traffic rules to the corruption in huge corporates; no single person is above law, not even the king – Magna Carta.

Not everyone can know about the details entailed in the legislation. It is for this reason that we have experts of law in all fields, who know the minor details of regulations concerning the relevant department. For instance, we have lawyers experts in Corporate Law Mergers and Acquisitions. There are traffic lawyers who are experts in traffic rules. A litigator will file a case or defend one in court on your behalf.

Let us see what role does a corporate M&A lawyer plays during the corporate transaction, but before that let us understand what really an M&A transaction is.

Mergers and Acquisitions (M&A)

These terminologies are used in the corporate world. When one company is combined with another, it is said to have merged with the latter one. The assets, clients, human resources, everything will now belong to both. In other words, the two of them will become one company.

Acquisition, as the name indicates, is a process in which one company is bought by another. After the transaction, the former one (with all its assets) will belong to the latter. The sold company might not lose its identity and continue to work under the same name, but with different owners. For example, just recently Facebook bought Whatsapp. The app continues to work with its original name because the buyer wanted so.

Following are some of the reasons why corporates opt for M&A transactions:

• They want to make a sale because they don’t see a future, or just because the work is exhausting. The buyer, on the other hand, might think the other way, and see potential in the business.
• Companies merge to grow and expand.
• They merge to cut down on their expenses and increase their income.
• Buying an already established business is easier to work on, than having to compete with one by starting a new business.
• In both types of transactions, both parties aim at making a profit from the deal.

Role of a lawyer

The process isn’t as easy as it sounds. Deals and transactions are bound to be done legally, or else both parties can land in hot waters. Moreover, Corporate Law Mergers and Acquisitions require a large number of legal formalities and documentation that can only be comprehended and handled by a corporate lawyer. Lawyers on both sides of a contract will aim to bring the best for their respective clients. Following are the responsibilities of a lawyer:

i) Supervise deals and contracts

A business lawyer is an expert on finances and helps clients to close profit-making deals. He tells his clients about the risks involved in a deal, and pens down terms (according to the laws) prior to the deal closing. This helps in making things end in the favor of the client. For instance, documenting the condition if things wrong with the company are hidden, then the selling party will be held responsible, and will be punished in the way decided in the agreement.

In case of disputes, parties can seek help from Business Litigation Law Firms to resolve their issues.

ii) Negotiate transaction terms

Corporate lawyers are mostly in-house lawyers representing the interests of a company on various platforms. During an M&A agreement, lawyers of both entities negotiate the terms and conditions of the process. Both aim at agreeing on a note favorable to the parties involved.

An M&A transaction is a deal that brings benefits to both sides. Whether mergers or acquisitions both aim at bringing maximum profit to the participants, strategies designed to favor all involved. It is a mutualistic relationship between two companies, mutually benefitting from the deal. And, it has to stay like that. So, to prevent scammers and unfortunate fraudulence, Corporate Law Mergers and Acquisitions are a set of rules formulated to keep things going smoothly.

iii) Due diligence

Selling a company implies providing all the basic details – from the details of clients of the company to the revenue generated in the past few years, from a graphical representation of the profits and loss to the details of tax the selling company has paid. So basically, due diligence is the appraisal of the company being bought, to see if it is actually worth buying. The buyer might bounce back from the idea of purchasing due to some problems with the company. But this is their right. Therefore, lawyers recommend their clients be straightforward about the problems with their company. These legal representatives will give the seller a helping hand by renegotiating the terms, and maybe the price.

Lawyers of the buyers do due diligence, i.e. ask for files, whereas the one on the seller’s side will supervise the arrangement of files.

iv) Documentation

Corporate lawyers will do all the paperwork entailed in the M&A process. Transferring the business to another party or merging two businesses requires a set of complex legal formalities that can be only done by a qualified attorney.

Lawyers should be adept enough to be able to bring innovative solutions to any problem entailed in the deal. A corporate lawyer will not litigate any case, therefore one has to refer to a Business Litigation Law Firm to take help in filing a case against an offender.

v) Check if agreements are law-compliant

They supervise all the steps involved in the M&A agreement and see if everything is according to the laws of the country/state. Therefore, these lawyers don’t litigate – take the case to the court- rather assist companies to manage their matters under the legislations and local business codes, to prevent any complexities in the future.