Mergers and Acquisitions is a major feature of the current business landscape. It allows businesses to grow, shrink, change and improve, but it is vital that the stringent regulations involved are followed and expert advice is sought.
Whether it is a share acquisition, asset purchase, management buy-out, or management buy-in, Carter Bond’s team of solicitors are experts in the field and can guide you through the process, highlighting each potential pitfall. We have represented clients across a number of sectors and at every stage of the transaction, from initial advice on exploring the structure, right through to post-completion formalities.
What We Do
- Work with you at every step of the transaction – initial advice, heads of terms, confidentiality agreements, due diligence, negotiating contract terms, completion and post-completion formalities.
- Tax implications often dictate your deal structure when buying or selling a company. We will work closely with you, your accountants and any other financial advisors to ensure the correct structure of the transaction.
- Identify potential liabilities and issues within the business and help you to mitigate your loss.
- Advise you on your obligations and responsibilities on TUPE and employment law.
FAQ - Commercial Law
What are heads of terms?
Heads of Terms or Letter of Intent essentially set out the main terms of a corporate deal. The Heads of Terms will include for example, sale price, what assets are included, who the seller and the purchaser are and any other key terms. They may be drawn up by the selling agent, or one of the parties’ solicitors. Heads of Terms are commonly agreed and signed by both parties. It is strongly advised to seek legal advice before signing.
What is a disclosure letter?
The Disclosure Letter is a key document in any company sale or purchase. It is the seller’s opportunity to make ‘disclosures’ against the warranties which the buyer will require the seller to give. If a seller makes inadequate disclosures, it may face breach of warranty claims, which could allow the buyer to recoup some or even all of the purchase price.
The Disclosure Letter usually takes the form of a letter from the seller to the buyer. It is prepared by the seller’s solicitors. It is usually divided into two parts: general disclosures and specific disclosures and will have attached to it copies of the documents being disclosed to the buyer (the disclosure bundle).
General disclosures cover certain matters that appear in public records and/or of which the buyer ought to be aware on the basis of pre-contract enquiries or searches actually made, or which a buyer would normally make. The general disclosures are often the subject of substantial negotiation between the buyer and the seller’s solicitors.
Specific disclosures are the seller’s opportunity to specifically disclose actual matters which, if not disclosed, would constitute a breach of warranty. The specific disclosures are made by reference to the warranties themselves. For example, if there is a warranty within the sale agreement that the target company is not a party to any litigation, the seller would need to disclose full details of any current litigation affecting the company. Also, certain warranties may require specific information to be listed in the Disclosure Letter or included in the disclosure bundle (such as material contracts, pension schemes, etc).
What are warranties and indemnities?
Warranties are contractual statements, usually contained in an agreement, as to the condition of the target company or business. They are usually contained in a separate schedule to the agreement.
Indemnities are promises by the seller to make good any potential losses that may be incurred by the buyer in certain circumstances.
What is the difference between an asset and share acquisition?
If shares in a company are purchased, all its assets, liabilities and obligations are acquired (even those that the buyer does not know about). If assets are purchased, only the assets (and liabilities) which the buyer agrees to obtain and which are identified are acquired.
The other key commercial difference between the two transactions is in the nature of what the buyer acquires: on a share purchase it acquires a company owning a business and running it as a going concern (subject to any change of control provisions). In contrast, an asset purchase will not automatically transfer contracts (other than employment contracts in a relevant transfer) or existing trading arrangements to the buyer.
What is a joint venture?
A joint venture is a commercial arrangement between two or more participants who agree to co-operate to achieve a particular objective. Joint ventures cover a wide range of collaborative business arrangements which involve differing degrees of integration and which may be for a fixed or indefinite duration.
Why enter into a joint venture?
There are many reasons why a business may seek a joint venture partner. It may wish to expand, develop new products or markets or grow returns from existing ones. It may be looking to tap into a partner’s greater or more specialised expertise or resources or to share the costs and risks associated with developing new markets or technologies.
What is an EMI scheme?
Enterprise Management Incentives (EMIs) are employee share options under which companies can grant rights to their employees to acquire its shares on a highly tax efficient basis for both the employer and participating employees.
EMI can form a tax efficient part of a company’s succession planning (bringing selected key employees through to have a stake in the business) or be used as a pure incentive arrangement.
There are certain requirements which must be met by both the company and the employee in order for options to qualify as EMI options such as the employee working at least 25 hours a week. Carter Bond Solicitors are happy to advise you further on the requirements.
Let us take it from here
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020 3475 6751