Choosing the right business structure is a critical step in setting up a successful startup. The structure you select affects how your company operates, its appeal to investors, tax obligations, and how it handles liability in case of legal issues. While it is possible to change your business structure later, doing so can bring unexpected challenges and consequences.

Mergers and acquisitions (“M&A”) are often an essential strategy for companies looking to grow, adapt, or secure a competitive advantage. Gaining a basic understanding of M&A deals can help business leaders navigate these opportunities, allowing for informed decisions on expansion or sale while managing associated risks.

Limiting liability in contracts is a widely accepted strategy to manage potential risks and protect against lawsuits or claims. By including a limitation of liability clause, companies can often transfer certain risks to the other party, making it a popular option for mitigating legal exposure.

While insurance may cover certain claims, not all risks are insurable, which makes a limitation of liability clause even more essential. These clauses are standard in many agreements, including service and asset purchase contracts.

When buying any business, the best advice is to work with experienced professionals, including an experienced business lawyer, a certified public accountant (CPA) and a valuation expert. We can do #1 and we have contacts for #2 and #3. Buyers often make certain mistakes during the purchasing process that can lead to significant challenges later on, such as partnership or shareholder disputes, unexpected liabilities, non-compete violations and conflicts over payment terms. Here’s a guide to ensure your new investment is well-protected.

Officers, directors, managers, controlling shareholders and other key individuals in corporations and business entities often have obligations toward minority owners as outlined in the organization’s foundational documents (e.g., bylaws, operating agreements). For example, control persons may be required to provide minority investors access to the company’s books and records. Additionally, state laws impose specific duties, such as holding annual shareholder meetings, for the benefit of minority owners.

Acquisitions can be unpredictable—you never know exactly what you’ll get once you open that box of chocolates! Even in an asset purchase (rather than a merger or stock sale), hidden liabilities or unforeseen issues may arise. For instance, the seller could be insolvent, exposing the transaction to claims from creditors under bulk sales or fraudulent conveyance laws.

Similarly, you might not acquire all the assets you expected, whether through poor structuring or overlooked shared resources in a merger or stock purchase.

However, you can mitigate these risks through careful planning and the right tools. Below is an overview of key mechanisms that experienced M&A attorneys use to protect buyers.

Mergers and acquisitions (“M&A”) offer exciting growth opportunities but also introduce the potential for disputes at nearly every stage of the process. From initial negotiations to years after a deal closes, both buyers and sellers must navigate complex issues to minimize legal risks. Here are five common sources of disputes in M&A transactions and strategies to mitigate them.

Mergers and acquisitions (“M&A”) often involve sensitive discussions, where public disclosure can disrupt operations, erode employee morale or affect market confidence. For publicly traded companies, these discussions may qualify as material nonpublic information subject to regulations such as Regulation FD, insider trading rules and Exchange Act Rule 10b-5. Additionally, untimely disclosure could impact stock value or invite competing bids. For private companies risks include employees jumping ship, competitors moving in to recruit key talent or impact customer relations.

Imagine you’ve signed a meticulously prepared contract after extensive due diligence and negotiations. Yet, shortly after, you find that the other party’s actions—while not explicitly breaching the contract—are obstructing your ability to benefit from the agreement. What can you do?

This is where the implied duty of good faith and fair dealing comes into play. This duty, recognized in most jurisdictions (albeit with varying scope), requires parties to act reasonably and fairly in performing and enforcing contractual obligations.