Legal counsel for mergers and acquisitions reduces transactional uncertainty, allocates liabilities, and preserves value by identifying risks early and negotiating enforceable protections. Proper contract drafting, attention to representations and warranties, and coordinated financing and regulatory filings protect buyers and sellers and support smoother transitions for employees, customers, and stakeholders.
Thorough documentation of representations, warranties, indemnities, and escrow arrangements assigns responsibility for known and unknown liabilities, giving buyers and sellers predictable remedies. That clarity reduces negotiation friction and promotes confidence in the transaction’s enforceability.
Clients work with Hatcher Legal for clear, actionable guidance on deal structure, contract drafting, and risk allocation. We prioritize succinct communication, realistic timelines, and documentation that reflects negotiated outcomes and protects our client’s financial and operational goals.
Post-closing work includes implementing transition services, enforcing restrictive covenants, and resolving any disputes under the purchase agreement. Proactive management of these matters protects transaction value and supports continued business operations.
An asset purchase transfers specified assets and liabilities from the seller to the buyer, allowing buyers to select which liabilities to assume and often reducing exposure to unknown obligations. Sellers may prefer this when retaining certain liabilities or winding down operations, while buyers value the ability to cherry-pick assets and contracts. A stock purchase transfers ownership of the target entity itself, including its liabilities and contracts in place. This structure can simplify transition of licenses and contracts tied to the entity but may carry greater responsibility for pre-closing liabilities, requiring careful indemnity and warranty negotiation to manage risk.
Transaction timing depends on complexity, diligence needs, and regulatory or financing contingencies. Simple transactions may close in a few weeks, while deals with financing, multiple stakeholders, or regulatory approvals commonly take several months. Early planning and timely document production accelerate the process and reduce exposure to reopening terms. Legal coordination of deadlines, clear closing conditions, and proactive resolution of identified issues typically shorten timelines and reduce costs. Engaging counsel early in the process helps set realistic expectations and keeps parties aligned toward an efficient closing date.
Before an initial meeting, gather basic financial statements, tax returns, ownership documents, key contracts, and board or shareholder agreements. Providing this information allows counsel to identify obvious barriers to sale, potential valuation drivers, and parties whose consent may be required for assignment or transfer. Having a concise summary of operations, employee agreements, and any outstanding litigation or regulatory matters is also helpful. This preparation enables more productive discussions about deal structure, potential buyers, and realistic timelines for completing a transaction.
Taxes on a business sale depend on transaction structure, allocation of purchase price, and the seller’s tax profile. Asset sales and stock sales have different tax consequences for both buyers and sellers, affecting after-tax proceeds and sometimes the choice of structure. Working with a tax advisor alongside legal counsel helps structure the transaction to meet financial goals and manage potential tax liabilities. Early tax planning can influence allocation of purchase price, timing of payments, and overall deal design to preserve value for sellers and buyers.
Due diligence typically covers financial records, tax filings, employee and benefits files, customer and supplier contracts, intellectual property, real estate and lease documentation, and litigation history. The scope varies by industry and transaction size but aims to identify material liabilities and areas needing contractual protection. Buyers and their counsel use diligence findings to negotiate representations, warranties, indemnity provisions, and price adjustments. Sellers that prepare documentation and address potential issues in advance often reduce renegotiation and make their business more attractive to buyers.
Retaining employees after a sale is common and often desirable to maintain continuity. Employment agreements, non-compete clauses, and retention incentives are tools used to secure key personnel and facilitate a smooth transition. Legal counsel negotiates terms that protect both the buyer’s interests and employee rights where applicable. When employees are transferred, considerations include benefits continuation, pension or retirement plan transfers, and compliance with state and federal employment laws. Clear communication and documented transition plans reduce turnover risk and preserve client relationships during ownership change.
Representations and warranties are factual statements made by the seller about the business’s condition at closing. They give buyers contractual assurances regarding financial statements, contracts, licenses, and liabilities. Breach remedies are typically defined in the purchase agreement through indemnity provisions and limitations on recovery. Carefully drafted warranties and appropriately scoped disclosures allow sellers to limit post-closing exposure while giving buyers confidence in the transaction. Negotiations commonly focus on materiality thresholds, survival periods, and caps on indemnity claims to balance risk allocation.
Escrows or holdbacks preserve funds after closing to cover potential breaches of representations, unpaid liabilities, or indemnity claims that arise post-closing. The amount, duration, and release conditions are negotiated and documented in the purchase agreement and escrow instructions to ensure fair protection for both parties. Using an escrow reduces the need for immediate litigation to recover disputed amounts and provides a straightforward mechanism for resolving valid claims. Parties should agree on clear claim procedures and thresholds to minimize later disputes over escrow releases.
Regulatory approvals depend on the industry and the nature of the transaction. Certain sectors require notices or consents from state agencies, licensing authorities, or federal regulators. Transactions that raise competition concerns may require review under antitrust laws, while healthcare, finance, and utilities have specific approval processes. Evaluating regulatory risk early helps determine transaction feasibility and timing. Counsel coordinates filings, prepares required materials, and advises on measures to obtain consents, ensuring the transaction proceeds with required approvals in place.
Preparing a business for sale involves organizing financial records, updating contracts, resolving outstanding legal or tax issues, and documenting key customer relationships. Improving operational documentation and addressing maintenance of licenses or permits increases buyer confidence and makes valuation more predictable. Addressing employee retention, clarifying ownership of intellectual property, and presenting a concise growth narrative further enhance marketability. Early legal and accounting review helps identify corrective steps that reduce obstacles and optimize the sale timeline and proceeds.
