Mergers and Acquisitions: Legal Considerations for Businesses
May 12, 2025
In the ever-evolving field of commerce, mergers and acquisitions (M&A) represent powerful tools for growth, diversification, and competitive advantage.
Serving Philadelphia, Pennsylvania, and the surrounding areas, we at Richard L. Vanderslice, P.C. work with businesses across various industries to help them prepare for and complete successful mergers and acquisitions. As we guide our clients through each phase, we help identify risks, protect interests, and drive transactions forward with confidence.
Below, we explore key legal considerations that businesses must take into account during any M&A process and how a business litigation attorney from our firm can help you through this process with ease and efficiency.
Structuring the Transaction
One of the first decisions in any M&A process is how the deal will be structured. The legal and tax implications of the structure can significantly affect the transaction’s success. This is why it’s vital to assess each option based on the specific needs and goals of the businesses involved.
Common transaction structures include:
Asset purchase: Buying specific assets and liabilities of a business
Stock purchase: Acquiring ownership through shares of the company
Merger: Combining two entities into a single legal entity
Joint venture: Establishing a new entity co-owned by both parties
Each of these approaches has distinct legal consequences. With help from a business litigation attorney, we assess the best structure to meet strategic and financial goals.
Conducting Due Diligence
Due diligence is the investigative process that precedes a merger or acquisition. This critical phase allows a buyer or partner to review key legal, financial, and operational information about the other party. It also helps us identify any red flags or potential liabilities that could impact the transaction.
Key areas to evaluate during due diligence:
Corporate documents: Charters, bylaws, and shareholder agreements
Financials: Tax returns, audited statements, and outstanding debts
Contracts: Leases, vendor agreements, and customer obligations
Employment matters: Staff contracts, benefits, and potential claims
Intellectual property: Patents, trademarks, and copyright rights
A business litigation attorney helps facilitate a smooth due diligence process and interprets any issues that could affect the deal.
Drafting and Reviewing Agreements
Legal documentation is the backbone of every M&A transaction. These agreements not only memorialize the terms of the deal but also serve to protect each party from unnecessary risk.
Essential documents include:
Letter of intent (LOI): A preliminary outline of the deal's structure and key terms
Purchase agreement: Detailed terms regarding price, assets, liabilities, and closing obligations
Disclosure schedules: Lists of exceptions or known issues related to the seller's representations
Non-compete agreements: Clauses to prevent former owners or executives from competing
Escrow agreements: Holdbacks to manage post-closing adjustments or indemnification claims
Our role as legal counsel is to review these documents closely, revise them as needed, and clarify any vague or unfavorable language. This process is critical to protecting our clients' interests.
Regulatory and Compliance Matters
Regulatory issues can pose significant roadblocks during mergers and acquisitions. Depending on the industry, location, and scale of the transaction, several approvals or filings may be required before the deal can close.
Common legal considerations include:
Antitrust laws: Federal and state competition regulations
Securities filings: If publicly traded stock is involved
Industry-specific licenses: Healthcare, transportation, financial services, and more
Environmental reviews: Particularly for businesses with physical facilities or hazardous materials
Data privacy laws: Compliance with state, federal, and international data protection regulations
Our business litigation attorney works closely with regulatory agencies to handle filings, respond to inquiries, and keep the transaction moving.
Addressing Employment and Labor Concerns
When two companies combine, questions naturally arise about what will happen to employees. It’s essential to review employment agreements, benefit plans, and labour union contracts early in the process to avoid disruption and potential legal claims.
Labour-related areas to review:
Severance obligations: What happens if staff are let go?
Benefit integration: Merging retirement, health, and paid leave programs
Key employee retention: Offering incentives or contracts to retain top talent
Union agreements: Reviewing collective bargaining contracts and obligations
Workforce communication: Planning internal announcements and messaging
A business litigation attorney helps address these concerns with a forward-thinking strategy that supports both morale and compliance.
Protecting Intellectual Property
For many companies, intellectual property (IP) is one of their most valuable assets. Whether it's proprietary software, branding, or trade secrets, IP must be properly identified and protected during any merger or acquisition.
We review and protect:
Ownership rights: Making sure the seller actually owns what they're selling
Transfer procedures: Assigning IP rights to the buyer
Licensing agreements: Identifying third-party rights or restrictions
Non-disclosure agreements (NDAs): Guarding sensitive information during talks
Trademark and domain transfers: Managing brand-related transitions
We also conduct IP audits to spot issues that might otherwise go unnoticed. A business litigation attorney helps safeguard these assets from potential disputes.
Managing Post-Closing Obligations
The work doesn’t end when the deal is signed. Post-closing matters require attention to confirm that everything agreed upon is carried out smoothly and according to the law.
Common post-closing responsibilities include:
Working capital adjustments: Finalising post-closing financial changes
Earn-outs: Monitoring performance benchmarks for additional compensation
Contract novations: Transferring third-party agreements to the buyer
Ongoing disclosures: Notifying stakeholders or regulators of changes
Dispute resolution: Addressing any conflicts that arise post-closing
Our continued involvement helps avoid disputes and supports a successful transition for all involved.
Shifting From Deal Closure to Daily Business Integration
After closing, the legal focus shifts toward integration. Business owners must turn their attention to unifying operations, combining systems, and delivering on the synergies that inspired the deal in the first place.
We assist with:
Governance updates: Modifying boards, officers, and internal protocols
Contract management: Tracking timelines, renewals, and compliance obligations
Brand strategy: Coordinating marketing and public-facing transitions
Technology integration: Aligning systems, platforms, and data management
Legal clean-up: Retiring old entities, closing accounts, or terminating unused contracts
Having a business litigation attorney on hand post-closing helps identify risks early and provides guidance when adjustments are needed.
Planning for Disputes and Litigation
Even with the most careful planning, disputes can still arise. Whether it’s a disagreement over financial statements, breach of representations, or post-closing obligations, businesses must be prepared to defend their interests.
Our litigation support covers:
Breach of contract claims: Addressing violations of the purchase agreement
Indemnification disputes: Handling claims made under post-closing provisions
Shareholder disputes: Resolving issues with minority or dissenting shareholders
Fraud or misrepresentation: Litigating claims of deceptive practices
Injunctive relief: Pursuing immediate remedies when needed
Having a business litigation attorney from the start reduces the chances of ending up in court—and gives our clients a better position if they do. We help negotiate contracts, resolve disputes, and protect long-term interests.
Contact Us Today
Whether you're buying, selling, or merging, legal guidance is key to protecting your investment and making strategic decisions with confidence. We provide the trusted insight and experience businesses need to approach mergers and acquisitions the right way. We proudly serve clients throughout Philadelphia County, Montgomery County, and Delaware County. At Richard L. Vanderslice, P.C., let us talk about your goals and how we can support your next move forward.