Business owners have a few options when it comes to exiting or expanding, and many find themselves buying another enterprise or selling to another party at some point. The process of a merger or acquisition in Colorado can raise any number of legal issues. According to members of the Forbes Business Development Council, the most important things to consider include asking the tough questions, knowing the deal breakers, gathering information and checking the culture fit.
It’s important for business owners and entrepreneurs to be willing to ask the tough questions early on in the merger or acquisition process. The parties should know why this other company wants to buy or sell and what the intentions are for after the deal. Plans for retaining or releasing current staff should be explicitly discussed.
During due diligence, or even before, each of the parties should set forth their deal breakers. It is costly and frustrating to go further in the process only to find out that the deal will not go through. The parties involved should endeavor to learn everything they can about the companies. A close understanding of the merger’s ultimate value makes it much more likely to succeed in the future.
The culture of one business might be wildly different than that of another. Management and ownership should make sure there is a good culture fit between the businesses before finalizing an acquisition or merger. If the two companies are too different in attitude or philosophy, management and staff can have a hard time adjusting after the merger.
In a case where one business is buying another, a lawyer might be able to help by conducting due diligence or creating documents to affect a sale and dissolution. An attorney with experience in business law might be able to negotiate the terms of the sale or purchase, or he or she might establish a business entity under which the resulting company can operate.