Mergers and acquisitions can accelerate growth, enable owner exits, or realign market position, but they also bring legal, tax, and operational risks. Legal counsel helps manage those risks through tailored agreements, due diligence, and compliance work so parties capture intended value while limiting exposure to contingent liabilities and future disputes.
Comprehensive counsel identifies and addresses exposures through tailored representations and warranties, indemnification structures, and escrow arrangements. Proactive review of contracts, employment matters, and regulatory filings reduces the chance of undisclosed liabilities affecting value after closing, protecting buyers and giving sellers clarity about remaining obligations.
Clients rely on Hatcher Legal for thoughtful transaction planning, careful contract drafting, and thorough due diligence. We focus on aligning commercial objectives with legal protections so parties negotiate from a position of clarity and close transactions that reflect what was promised while addressing foreseeable contingencies and regulatory requirements.
After closing, we help implement integration plans, address employee and customer transitions, and calculate post-closing adjustments or earnouts. If disputes emerge, we pursue negotiated resolutions or litigation steps when necessary, always aiming to preserve transaction value and enforce contractual protections for our clients.
An asset purchase transfers selected assets and specified liabilities to the buyer, allowing the buyer to avoid many historical liabilities; this often requires individual consents for certain contracts and can have distinct tax consequences for seller and buyer. A stock purchase transfers ownership of the selling entity, passing assets and liabilities as-is to the buyer. The choice between structures depends on tax results, consent requirements, and risk allocation preferences negotiated by the parties.
Transaction timelines vary widely with complexity, regulatory requirements, and financing. Simple deals with few contracts can close in a matter of weeks, while transactions involving extensive due diligence, financing, or regulatory review may take several months or longer. Early planning, prompt document production, and coordinated advisor communications help shorten timelines. Identifying potential hurdles up front and establishing clear milestones improves certainty about realistic closing dates.
Common costs include attorney fees for due diligence and drafting, accounting fees for financial review and tax analysis, and fees for transfer or filing requirements. Buyers may also incur financing costs and escrow or brokerage fees depending on the transaction structure. Sellers should budget for closing-related expenses and potential tax obligations. Clear communication about expected fees and a written engagement scope helps manage transaction costs and avoid surprises during negotiation.
Due diligence typically examines financial statements, tax returns, material contracts, employment matters, litigation history, intellectual property, and regulatory compliance. This process identifies liabilities, uncovers material issues, and verifies representations that support valuation and contract terms. The depth of due diligence depends on size and risk profile of the target. Working with experienced advisors ensures important areas are prioritized and findings are translated into appropriate contractual protections.
Representations and warranties are contractual statements about the seller’s business, assets, liabilities, and compliance used to allocate risk. If a representation proves false, buyers may seek remedies through indemnities, escrow claims, or negotiated adjustments. The scope, duration, and caps on these protections are negotiated based on due diligence findings, materiality of issues, and the parties’ bargaining positions. Clear disclosure schedules also narrow indemnity exposure for disclosed matters.
Some transactions require regulatory approvals or notifications, especially in regulated industries or larger deals that implicate competition laws. Local permits, professional licenses, or government consents for contract assignments may also be necessary depending on the contracts and assets involved. Identifying regulatory touchpoints early allows parties to plan timing and prepare required filings. Legal counsel coordinates with regulators, prepares submissions, and advises on conditions that may be imposed as part of approvals.
Allocating risk through representations, indemnities, escrows, and seller holdbacks limits exposure to unknown liabilities. Buyers can negotiate caps, baskets, survival periods, and specific indemnities for known sensitive matters identified in due diligence. Insurance solutions such as representations and warranties insurance may also be available for certain transactions to provide additional recourse. Structuring protections depends on deal value, identified risks, and negotiation leverage.
Tax considerations influence whether a transaction is structured as an asset or equity sale, the allocation of purchase price among assets, and post-closing tax liabilities. Proper tax planning can reduce overall tax burdens for buyers and sellers and affect net proceeds from a sale. Engaging tax advisors early helps evaluate implications and determine optimal structures. Legal counsel coordinates with accountants to implement allocation methods and contractual provisions that reflect the agreed tax treatment.
Small businesses can be attractive acquisition targets when they offer complementary capabilities, customer relationships, or unique products. Proper preparation, clean financials, and well-documented contracts increase buyer confidence and facilitate valuation discussions. Positioning the business by addressing legal and operational risks, preparing clear organizational records, and demonstrating stable cash flow improves the likelihood of a successful sale and often leads to better commercial terms.
Owners should organize financial statements, update key contracts, address outstanding compliance or employment issues, and prepare a clear summary of business operations and growth prospects. Early conversations with legal and tax advisors help identify issues that could affect deal value or timing. Creating a realistic timeline, understanding valuation expectations, and preparing management to participate in due diligence will help the process move efficiently and present the business in the best possible light for prospective buyers.
