Merging with another small business can be a great option when it benefits both parties and your values and specialist areas align.
However, it is also important to consider your reasons for merging with another business and do your research accordingly.
You should have in-depth conversations with the other business and make sure you are both in agreement with the merger and wish to go forward with it.
Reasons for wanting to merge could be:
- To grow and develop your business
- Eliminating a competitor
- Accessing different systems
- Gaining new skills within both business’
The business you want to merge with could have systems or a specialist area that you could benefit from.
Many legal issues can come up while in the process of a merger so it is important to do your research and follow the recommended steps to ensure that it runs smoothly.
Due diligence
Due diligence is the process of verifying and investigating a business that you are in the process of acquiring or merging with.
Due diligence is a vital part of a merger as you need to verify any facts and financial information you have been given during talks with the other business and you can use this process to check any legal cases that the business has been involved in.
This process should take place before you confirm the merger as it will be able to reassure you that the business is legally sound and the information you have been given is accurate.
Completing the deal
Ensure that you are both in agreement on the terms of the deal before you move forward with it.
It is important that you have both conducted due diligence and had all the information confirmed before you complete the deal.
Make sure you contact a legal advisor to get more advice and information on the legal considerations of a merger.
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