A Quick Insight On An Attorney's role in M & A Transactions

by Amy Jones Amy Jones is a professional legal expert working w

Merger and acquisition activities have grown dramatically in recent years with numerous companies announcing to under Mergers and acquisition transactions almost on a daily basis. In fact, Mergers and acquisitions have become a vivid reality in today’s highly competitive global business environment. Most of the companies agree to M & A transactions to cut their operational cost, enlarge their sizes, and increase profit margins. 

As sophisticated entrepreneurs have higher exceptions from M & A transactions, so one-third of such deals fail in the first 5 years and approx 80% of them don't live up to their full expectations. When an M & A transaction is made, a lot of people are affected, which creates several problems for the newly made organization. If you hire M&A Law Firms, they can help you strike a good M & A and deal with the relates issues without any problem. Have a look at how a lawyer can help you in M & A transactions:

1. Preparation Of Agreements (M&A)

To complete an M & A transaction, different rules and regulations are applied. Most of the companies prepare illegal contracts consciously or unconsciously and fall in legal troubles later one. They pay a heavy price once they get trapped in the legal scanner. But, they can obtain consultancy services from expert lawyers and reach a right business agreement easily and quickly. 

2. Determination of Partnership Shares and Rights

When two companies combine to become a new company, the role of Mergers and Acquisition Lawyers become important as they have to determine the exact partnership shares and rights of the involved companies. Generally, When the rate of change of the partnership shares is calculated, it should not be exceeding 1/10 of the real value of the partnership shares allocated to the partners of the transferred company. The Acquiring company is bound to give the equal rights to the owner of redeemed shares of the transferred company or acquire dividend shares at the actual value of the date on which the merger agreement was made, as stated by the law. 

3. Tax Structuring

After M & A transaction, the tax liability of a newly made company changed up to a great extent. As cutting the cost of the company remains the main motive of M & A transactions, most of the companies hire tax lawyers to determine their actual tax liability without falling in the legal scanner.