Legal Process and its Requirement

Acquiring another company is a difficult process with many laws for regulation.A
company would buy another business for various reasons. These reasons include access
to new technology and access to new markets. Buying a company can mean being able
to make new products and having access to new resources or fresh management talent.
However, if you handle an acquisition poorly, your business could take on the mistakes
of a broken organization and heavy losses.

Steps for an acquisition:

1. Consider the required resources.Find out why the business is worth buying.
Develop an acquisition plan that gets the most out of the enterprise while spending
the least. Focus on the aspect of the company that is most valuable to you and
shape your offer around that benefit.

2. Build a team that fills the roles of a executive manager,acquisition

lawyer,investment banker,human resources expert,IT specialist mergers,IT
specialist merger,public relations officer.

3. The next step is research and due diligence,in this step the public information
about the company is checked.Job listings, Web pages, blog entries, conference
proceedings, news stories, SEC filings and any other data are used when drafting
the contract.Summary of business owner requirements,Three-five years of
financial data (P&L and balance sheet),Annual review of owner's
benefits,Summary of top customers are some more additional documents thats are
verified.

4. The legally prepared documents for this process are as following

 Non-Disclosure Agreement-This document makes sure all information considered

confidential will be treated carefully and not shared. It also means the information
has to be returned upon request.

 Letter of Intent - This document states that you intend on buying the company after
signing the NDA and after considering the business is worth.
 Confidential information memorandum - This document provides the prospective
buyer with information for the initial offer. It will typically include: a summary of
business operations, summary of industry and market opportunties, financial
information, and summary of auction process.

 Indication of Interest - With this you express an interest in making a deal in vague
but formal written offer.

 Purchase Agreement - You and the seller formalize the agreement in a binding
legal contract.

5. Make a good first impression with clear positive negotiations by offering a fair
price. Because you are attempting to buy this company, you need to make the first
offer. Remember that the acquisition working is your responsibility.

6. Be firm but don't undermine your success by being too harsh. Try not to overpay
and work toward an agreement that benefits both parties.

7. Write up and sign a contract.Contracts are not easy and one should sign up contract
lawyers for the smooth functioning and understanding between the two companies.