Houston, Texas Mergers & Acquisitions Lawyer
The Houston law firm of Robert M. Mendell, Attorney at Law, P.C. has substantial expertise in the areas of business mergers, acquisitions, divestitures, conversions, tax-free reorganizations, and other business combinations, sales, purchases, and divisions.
The Negotiation Stage of the Business Acquisition Involves Both Tax and Non-Tax Considerations
In negotiating the purchase or sale of a business, many non-tax considerations are usually considered and agreed to by the buyer and the seller aside from the obvious amount and payment terms of the purchase price.
Such matters may include, as examples:
- Whether any personal guarantees are to be required of the buyer in the event of seller financing of all or a portion of the purchase price,
- Whether, in the event of seller financing, any assets of the purchased business or other assets of the buyer are to be used as collateral by the seller,
- The contents of warranties and representations and the consequences of any violation of a warranty or representation, including whether a right of offset will be granted,
- Confidentiality provisions,
- The provision or non-provision for a deal-breakup fee,
- Whether legal opinions will be required,
- The establishment of contingencies on deferred payments to the seller, including the parameters of any “earn-out” provision,
- The restrictions on seller’s conduct pending closing,
- The length of the survival period for warranties and representations,
- The specific delineation of employment or consulting agreement terms for any continuing involvement of seller after closing,
- The contents of restrictive covenant provisions such as covenants not to compete and nonsolicitation restrictions, and
- The “basket” and “ceiling” amounts for indemnification for breach of seller’s warranties and representations.
An experienced and knowledgeable mergers and acquisitions attorney can help obtain more favorable terms and conditions for the client in connection with the myriad of business points and issues involved in any substantial business sale or purchase.
The income tax implications of the contemplated business acquisition should be carefully considered. Sellers organized as C corporations often need special structuring of the sale transaction in order to avoid a double tax. Among other techniques that might be considered, allocation of part of the purchase price to personal goodwill of the seller’s owners may solve or lessen a double taxation situation under the right circumstances.
Engagement of an experienced mergers and acquisitions lawyer, with additional expertise in tax law, can be very important when considering the important tax implications involved in any substantial business sale or purchase.
Robert M. Mendell, with over 40 years experience, is an experienced mergers and acquisitions attorney and is an Attorney CPA and a Board Certified Tax Attorney.
Many or most of the key tax and non-tax considerations can be set forth and agreed to in a preliminary document often referred to as a Letter of Intent.
- Business Acquisitions Seminar Handout.
- List of Business Acquisitions Seminars Presented by Robert M. Mendell.
- Article: “Negotiating the Business Acquisition in a Buyer’s Market”
Proper legal representation relating to any substantial business acquisition or sale involves a wide range of legal issues and expertise in multiple legal disciplines, including, for example, business organizations, mergers and acquisitions, tax, real estate, and loan documentation. Robert M. Mendell, an Attorney CPA with over 40 years experience, is Board Certified in Tax Law by the Texas Board of Legal Specialization and has substantial expertise as a mergers and acquisitions attorney. Contact our office by email or by calling 713-888-0700.