What Can a Mergers and Acquisitions Lawyer Do for You?

Buying or selling a business can be one of the most significant transactions an entrepreneur completes. Although the purchase price naturally receives considerable attention, a successful transaction involves much more than agreeing on a number.

A buyer needs to understand exactly what is being purchased, which liabilities may remain with the seller, which liabilities may be assumed by the buyer, and whether the business owns the assets that make it valuable. A seller needs to understand what is being transferred, what obligations will continue after closing, and how the transaction can be structured to protect the value that has been built.

A mergers and acquisitions lawyer, commonly referred to as an M&A lawyer, can help both buyers and sellers navigate these issues.

An M&A attorney can help structure the transaction, conduct or coordinate legal due diligence, negotiate transaction documents, identify potential liabilities, address intellectual property and contractual issues, and guide the parties through closing. For entrepreneurs and privately held businesses, the goal is not simply to complete the transaction. The goal is to complete the transaction with a clear understanding of what is being transferred, what risks remain, and what each party will be responsible for after closing.

What Is a Merger or Acquisition?

Although the phrase “mergers and acquisitions” is commonly used to describe business combinations, mergers and acquisitions are not necessarily the same type of transaction.

An acquisition generally occurs when one business acquires another business, its ownership interests, or some or all of its assets.

A merger generally involves combining business entities pursuant to applicable state law. Depending on the structure of the transaction, one entity may survive the merger while another entity ceases to exist as a separate legal entity.

For many privately held companies and small-to-midsize businesses, a transaction may instead be structured as an asset purchase or an equity purchase. The structure chosen can significantly affect the legal and financial consequences for both the buyer and the seller.

What Is the Difference Between an Asset Purchase and an Equity Purchase?

In an asset purchase, the buyer purchases specified assets from a business.

Those assets may include inventory, equipment, customer lists, contracts, websites, domain names, trademarks, copyrights, intellectual property, goodwill, and other property used to operate the company. The parties negotiate which assets are included in the transaction and which liabilities, if any, the buyer will assume.

This distinction is important because purchasing a company’s assets does not necessarily mean that the buyer assumes every liability of the seller. The purchase agreement should clearly identify which assets are being acquired and which liabilities are being assumed, subject to applicable law.

An equity purchase works differently. Instead of purchasing individual assets, the buyer acquires an ownership interest in the business itself. For example, the buyer might purchase shares of a corporation or membership interests in a limited liability company.

The underlying business entity generally continues to own its assets and remains subject to its existing obligations. As a result, a buyer considering an equity purchase should carefully investigate the company’s history, contractual obligations, debts, disputes, and potential liabilities.

The choice between an asset purchase and an equity purchase can affect taxes, contracts, licenses, liabilities, intellectual property rights, financing arrangements, and the mechanics of transferring the business. An M&A attorney can work with the parties and their tax and financial professionals to evaluate which structure is appropriate for the proposed transaction.

What Does an M&A Lawyer Actually Do?

An M&A lawyer’s work often begins before the parties sign the final purchase agreement.

An attorney may become involved during the initial negotiations and help prepare or review a letter of intent. The attorney may then coordinate legal due diligence, negotiate the definitive purchase agreement, prepare additional transaction documents, obtain necessary approvals, and organize the closing process.

The exact responsibilities of an M&A attorney depend on the size, structure, and complexity of the transaction.

For a privately held business, an M&A lawyer may help determine whether the transaction should be structured as an asset purchase, equity purchase, merger, or another type of arrangement. The attorney may also prepare and negotiate letters of intent and confidentiality agreements, review corporate records and ownership documents, analyze material commercial agreements, investigate intellectual property ownership, and identify contractual restrictions that could affect the transaction.

An M&A attorney may also negotiate representations, warranties, covenants, indemnification provisions, and closing conditions. The attorney can prepare purchase agreements, assignments, bills of sale, corporate resolutions, and other closing documents. When necessary, the attorney can also coordinate with accountants, tax professionals, lenders, brokers, and other advisors involved in the transaction.

An attorney’s role is therefore not limited to drafting a purchase agreement after the parties have already decided the important terms. Early legal involvement can help the parties understand the consequences of proposed business terms while there is still an opportunity to negotiate them.

Why Is Due Diligence Important When Buying a Business?

Due diligence is one of the most important stages of an acquisition because it allows a buyer to investigate the business before completing the transaction.

A company may appear successful while still carrying legal or contractual issues that could substantially affect its value. A buyer should therefore understand more than the company’s revenue and profitability before deciding whether to complete an acquisition.

For example, imagine that a buyer is considering purchasing an e-commerce brand with significant annual sales. The company’s financial performance may initially make the acquisition attractive. However, legal due diligence could reveal that the company’s primary trademark is personally owned by its founder rather than by the business. A key supplier agreement might also terminate following a change in ownership. The company could have an unresolved intellectual property dispute, or a significant portion of its sales could depend on an agreement that cannot be assigned without another party’s consent.

These issues do not necessarily mean that the transaction cannot proceed. However, they can affect the value of the business, the structure of the transaction, and the protections that the buyer may require before closing.

An M&A attorney can review corporate organization, ownership records, contracts, intellectual property, litigation, employment matters, financing arrangements, leases, and other legal obligations that are relevant to the transaction. The results of that review may affect the purchase price, closing conditions, indemnification provisions, transaction structure, or the buyer’s decision to proceed with the acquisition.

Why Does Intellectual Property Matter in an Acquisition?

For many modern businesses, some of the company’s most valuable assets are intangible.

Trademarks, copyrights, patents, product designs, domain names, software, licensing rights, proprietary content, and confidential information can represent a substantial portion of a company’s value. Intellectual property due diligence can therefore be an important part of an acquisition.

A buyer should determine whether the seller actually owns the intellectual property that the business claims to own. For example, a company’s logo may have been created by an independent designer without a proper written assignment. A trademark registration may be owned by an individual founder rather than by the company being acquired. The business may also rely on licensed technology, photographs, software, or other content that cannot automatically be transferred to a new owner.

Existing infringement disputes can create additional risks. A buyer should understand whether the company has received cease-and-desist letters, infringement claims, marketplace complaints, or other challenges involving important intellectual property. Our infringement defense practice helps businesses respond to these types of claims.

Our article on intellectual property lawyers and business protection explains why identifying, protecting, and properly documenting intellectual property should be part of a company’s broader legal strategy.

When intellectual property is included in an acquisition, the transaction documents should clearly identify the rights being transferred and establish how those transfers will occur at closing. Businesses seeking to register and protect those rights in the first place can learn more on our trademark registration and copyright registration pages.

Why Should Buyers Review a Company’s Contracts?

A buyer is rarely purchasing a business that operates entirely on its own. Most businesses depend on relationships with customers, suppliers, manufacturers, landlords, distributors, licensors, employees, contractors, lenders, software providers, and other third parties.

Those relationships are often governed by contracts.

Some agreements may be transferred relatively easily, while other agreements may require consent before they can be assigned. Certain contracts may also contain change-of-control provisions that are triggered when ownership of the company changes.

A buyer should therefore understand which contractual relationships can continue after closing and which relationships require additional action.

This review can be particularly important when the company’s value depends heavily on one supplier, customer, distributor, license, lease, or commercial relationship. If that agreement cannot continue after the acquisition, the economics of the transaction may change significantly.

Carefully drafted commercial agreements can also make a company easier to evaluate when it is eventually sold. Businesses that document important relationships before an acquisition opportunity arises may be better prepared for a buyer’s due diligence process.

What Does the Purchase Agreement Do?

The definitive purchase agreement is one of the most important documents in an acquisition.

Depending on the structure of the transaction, the parties may enter into an asset purchase agreement, stock purchase agreement, membership interest purchase agreement, merger agreement, or another transaction document.

The purchase agreement does much more than state the purchase price. It establishes the parties’ obligations and determines how certain risks are allocated between the buyer and the seller.

For example, a seller may make representations and warranties concerning the company’s ownership, contracts, intellectual property, taxes, litigation, employees, financial obligations, and compliance with applicable laws. The agreement may also contain covenants that establish what the parties must do before or after closing.

Indemnification provisions can establish circumstances in which one party may be responsible for certain losses suffered by the other party. The agreement may also address limitations on liability, survival periods, escrows, holdbacks, earnouts, purchase-price adjustments, and other mechanisms that allocate financial risk.

These provisions can be just as important as the headline purchase price because they determine what happens when the expectations underlying the transaction do not match reality.

How Can a Business Owner Prepare to Sell a Business?

Legal preparation is important for sellers as well as buyers.

A business owner can benefit from preparing the company for due diligence before entering serious negotiations with a potential buyer. Preparing early can help identify problems that might otherwise appear at an inconvenient point in the transaction.

A seller may need to confirm that corporate records are current, document ownership interests, review important contracts, organize financial and tax records, resolve outstanding disputes, and verify that the company’s intellectual property is properly owned and documented.

Business owners should also determine whether important agreements contain assignment or change-of-control provisions that could complicate a future transaction.

If a business was formed informally or its governance documents have not been reviewed in several years, those issues may surface during the buyer’s due diligence process.

New York entrepreneurs who are still developing their companies can review our guides on how to form an LLC in New York, whether you need a lawyer to start a business in New York, and the differences between an LLC and an S Corporation in New York.

Preparing for a future acquisition does not need to begin when a buyer makes an offer. Maintaining clear ownership records, properly drafted contracts, organized business documents, and protected intellectual property can make the company easier to evaluate and transfer when an acquisition opportunity eventually arises. Our business law team assists entrepreneurs with these foundational matters every day.

How Are Non-Compete Agreements Used in M&A Transactions?

M&A transactions sometimes include restrictive covenants that are intended to prevent a seller from immediately competing with the business after the transaction closes.

However, the enforceability of a non-compete agreement depends on several factors, including the applicable jurisdiction, the circumstances surrounding the transaction, and the scope of the restriction.

A restrictive covenant negotiated as part of the sale of a business may also be evaluated differently from a non-compete agreement imposed in a traditional employment relationship.

Buyers and sellers should therefore avoid assuming that a broad non-compete provision will automatically be enforceable. An attorney can help evaluate which restrictions may be appropriate for the transaction and how applicable law may affect those restrictions.

Do Federal Merger Rules Apply to Every Business Acquisition?

Federal merger regulations do not apply in the same way to every acquisition.

Certain larger transactions may trigger premerger notification requirements under the Hart-Scott-Rodino Antitrust Improvements Act, which is commonly referred to as the HSR Act. The applicable thresholds are adjusted annually.

For 2026, the Federal Trade Commission increased the basic HSR size-of-transaction threshold to $133.9 million, effective February 17, 2026.

Many acquisitions involving privately held small businesses will fall below that threshold. However, the regulatory requirements that apply to a particular transaction depend on the transaction’s size, structure, industry, and other circumstances.

Businesses should therefore determine which federal, state, industry-specific, licensing, and contractual requirements apply to their particular transaction instead of assuming that every merger or acquisition follows the same regulatory process.

What Happens When an M&A Transaction Closes?

Closing is the point at which the parties complete the transaction contemplated by their agreements.

Before closing can occur, the parties may need to satisfy several conditions. They may need to obtain third-party consents, lender approvals, landlord approvals, governmental authorizations, payoff letters, releases, intellectual property assignments, corporate resolutions, and other required documentation.

The parties must also complete the transfers required by the purchase agreement. Those transfers may include business assets, ownership interests, intellectual property, contractual rights, funds, records, equipment, or other property involved in the transaction.

Some obligations may continue after closing.

For example, a seller may agree to provide transition assistance after the sale. A portion of the purchase price may depend on an earnout. Funds may remain in escrow for a specified period. The parties may also need to complete post-closing filings, intellectual property recordations, or other administrative transfers.

A carefully structured purchase agreement should address these obligations before the transaction closes so that both parties understand what will happen after ownership changes.

When Should You Contact an M&A Lawyer?

Business owners should consider involving an M&A attorney before signing a binding agreement to purchase or sell a business.

Entrepreneurs sometimes negotiate the major terms of a transaction before consulting legal counsel. An attorney may then discover that the parties have already agreed to provisions that create unnecessary risk or make the transaction more difficult to structure.

Early legal involvement allows an attorney to identify potential issues while the parties still have an opportunity to negotiate.

If you are buying a business, an attorney can help you determine what you are acquiring, investigate the company’s legal obligations, and understand which liabilities may accompany the transaction.

If you are selling a business, an attorney can help you prepare for due diligence, negotiate the transaction documents, protect the value you have created, and establish your obligations after closing.

Building a Business Also Means Preparing for Its Future

Entrepreneurs naturally spend much of their time thinking about how to start and grow their businesses. However, business ownership eventually changes.

A founder may sell the company to another entrepreneur. A competitor may acquire the business. Business partners may purchase one another’s ownership interests. A larger company may acquire a brand because of its intellectual property, technology, customer relationships, distribution network, or other strategic assets.

The legal work completed while building the company can directly affect how smoothly a future transaction proceeds.

Clear ownership records, properly documented intellectual property, carefully drafted contracts, and appropriate corporate governance can protect a business while it operates. Those same measures can also make the business easier for a potential buyer to evaluate, negotiate, finance, and acquire.

Stockman & Poropat, PLLC Can Help With Your Business Transaction

Stockman & Poropat, PLLC works with entrepreneurs and businesses on transactions, contracts, intellectual property, business formation, and other legal matters that can become important when purchasing or selling a company.

If you are preparing to acquire a business, considering selling the company you have built, or positioning your business for a potential future transaction, our attorneys can help you evaluate the legal issues involved.

Our team can assist with initial negotiations, due diligence, transaction structuring, contract drafting, intellectual property matters, and the closing process. We can work with you to understand the transaction, identify potential risks, and develop a legal strategy that protects your interests.

Contact Stockman & Poropat, PLLC at 917-781-4186 or schedule a consultation regarding your business transaction.

This article is provided for informational purposes only and does not constitute legal advice. Every transaction is different, and businesses should consult qualified legal, tax, and financial professionals regarding their particular circumstances.