College Station Business Attorney Explains Business Mergers in Texas
As your business grows, you may begin to considering joining forces with your competition or a key supplier in a merger. In this article, we will discuss some of the factors involved in a business merger. Read on to learn more, then contact us so we can help you decide if a merger is right for you.
There are no buyers or sellers in mergers. Rather, there will be a surviving business and a disappearing business.
Depending on the types of business entities involved, you may need to file articles of merger or consolidation, which require disclosure of the name of the surviving business, the name of the disappearing business, and the effective date of the merger, along with other pertinent information.
According to the Texas Business Organizations Code (BOC), a merger filing instrument must include either (1) the plan of merger or (2) the statements set out in section 10.151(b)(1) of the BOC. The secretary of state merger forms include an option for providing the alternative statements.
Whether you file the merger plan or opt to file the statements under option (2) above, you should have a professionally prepared merger plan to govern the details needed for effecting the merger. A comprehensive merger plan will include plans for issuing new stock to shareholders of the disappearing business, if the business is a corporation, in exchange for their stock in the disappearing corporation. The surviving company will take title to all of the disappearing business's assets and liabilities, and the disappearing corporation will cease to exist.
Mergers can result in significant tax consequences, which should be considered at the outset of forming a merger plan. Proper structuring and implementation of a merger plan can help neutralize or defer potential tax consequences.
If you are considering a merger or acquisition, an experienced Bryan-College Station, Texas business law attorney can provide assistance and answer your questions. Call the Peterson Law Group to make an appointment at 979-703-7014 or fill out our online contact form.