When deciding on the next way to grow your business, you may consider combining your business operations with another entity to increase market share or gain valuable assets. Two ways to do this is through mergers and acquisitions.
- Merger: When two companies combine into one. There are different types of mergers, most of which combine companies or assets in similar industries.
- Acquisition: When a company claims ownership of another company by purchasing at least 50 percent of its assets. This is done through purchases of stock or other types of property.
Both options can be beneficial or disastrous, depending on the decision made. Many times, companies may not be as compatible with each other as they initially thought, resulting in huge losses for both companies. Deciding on which company to merge or acquire with and what new entity to form is very important.
Different Kinds of Business Entities
- Corporation: A company or group of people recognized as a single entity by law.
- S-Corporation: This type of corporation can place certain deductions and losses onto their shareholders for tax purposes. No more than 100 shareholders are allowed when forming.
- Limited Liability Companies: This is a corporate structure where the members of the company are not held liable for company debts or liabilities.
- Partnerships: A single business where two or more people share ownership. There are multiple types of partnerships.
- Joint ventures: A type of partnership where owners of a business divide duties equally, but only for a certain period.
Deciding what the right next move is for your business is a complicated issue. There are many types of business transactions to choose from, each affecting the financial future of your business. New Jersey merger and acquisition attorneys at Garland & Mason, LLC have the resources to help you decide on the right transactions and get you through legal processes.