Businesses can take smart steps before mergers and acquisitions

Sometimes, it is in the best interest of two companies to join together and become one business entity. If one of the companies happens to be larger, this is usually called an acquisition. However, any transaction aimed at combining separate companies is technically considered a merger. Here is a look at what mergers and acquisitions involve, as well as how to go about them in Massachusetts.

Business owners who are interested in participating in mergers would be wise to request information about the business operations and finances of the companies with which they are interested in merging. They can then review this information prior to joining together with the other companies. There are three critical things to look for when combing through the other company’s information.

The first important thing to look for is whether the other company is in decent standing — something that can be confirmed with status reports from the past three years. Second, it is generally a smart idea to find out where the company has authorization to do business. It may also be beneficial to review the business’ minute book, incorporation articles and bylaws. Finally, a business owner may want to see if the other company has copyrights, patents and/or trademarks, and if any claims have been filed against the other business’ intellectual property.

Mergers and acquisitions are major transactions that can be both complex and tedious. Fortunately, an attorney can help a business owner through this process. An attorney can help the business owner to evaluate the risks that come with such a business transaction and take the necessary steps to make the most of it in Massachusetts.