News & Insights

When buying or selling a business, one of the most important decisions is how the transaction will be structured. In most mergers and acquisitions (M&A), a deal is structured as either an asset purchase or an equity purchase (referred to as a stock purchase for Corporations or membership interest purchase for LLCs).

Although both approaches ultimately transfer control of a business, the legal, tax, and liability implications can be dramatically different. The choice between these two structures affects issues such as: (i) liability exposure (ii) tax consequences; (iii) transfer of contracts and licenses; (iv) regulatory approvals (if any); and (v) negotiation dynamics between buyer and seller

Understanding the pros and cons of each structure is critical for entrepreneurs, investors, and business owners considering a transaction. This blog gives a practical overview of asset purchases vs. equity purchases and how each structure works.

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Search Google for the best legal entity for your new startup, and you will get different opinions. Startup advisors and CPAs will probably recommend a limited liability company (LLC). That’s because an LLC isn’t subject to double taxation and is easier to set up.

On the other hand, many startup lawyers will recommend the C-Corporation structure (typically a Delaware C-Corp) because corporate law is typically more “stable,” equity (stock) ownership is passive, and the entity is more structured.

How you choose to incorporate your startup business will have massive implications down the road. This blog from our business lawyers explores the basic advantages and disadvantages of each option.

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Anyone starting a new business is faced with a lot of decisions. Arguably the most important is choosing the business entity type and tax status. Business lawyers and CPAs will present entrepreneurs with several options to choose from depending on the legal entity, including “S” election. 

Each type of legal entity has its benefits and limitations. Technically, there’s no legal entity called an “S-Corp.” A company that makes an “S” election for tax purposes is typically referred to as an S-Corp. However, various types of legal entities including LLCs and Corporations can elect S-Corp status. This blog from our business lawyers will discuss the benefits of “S” election.

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For entrepreneurs and business owners, choosing the right business structure is a pivotal decision. Among the options, Limited Liability Companies (LLCs) stand out for their flexibility, especially regarding tax status. This flexibility allows LLC owners to align their business structure with their financial and operational goals. This blog post from our business lawyers discusses the different tax statuses that an LLC may elect.

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Buying or selling a business is rarely a single-step transaction. It moves through stages, and one of the earliest formal milestones is the letter of intent. Understanding what this document does before you sign it can shape how smoothly the rest of the deal proceeds.

Once a buyer and seller agree on the basic outline of a deal, the next step is usually a letter of intent, sometimes called a term sheet. For many first time buyers and sellers, the LOI is the first real legal document in the process, and it is easy to misunderstand what it actually locks in. Getting guidance from an experienced business attorney before you sign one can save both sides from confusion, and sometimes from a costly mistake, later in the deal.

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Acquiring a business is very different from starting one, and having an experienced business and corporate attorney involved from the outset can help you avoid costly surprises. When you buy an existing company, you are also buying its history, meaning its past contracts, its past compliance decisions, and in some cases its past problems. Thorough due diligence is what separates a buyer who understands exactly what they are acquiring from one who finds out the hard way after closing.

Every acquisition carries some risk that the business is not exactly what it appears to be on paper, and that risk falls squarely on the buyer once the deal closes. A seller who is eager to move forward will not always volunteer every issue that could affect your decision, not necessarily out of bad faith, but because they may not view certain items as material the way an outside buyer would. That gap in perspective is exactly what a disciplined diligence process, guided by an experienced business or corporate attorney, is designed to close.

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