Business owners, investors and entrepreneurs in Texas may benefit from learning more about acquisitions. Texas laws are designed to provide flexibility in terms of settling on the company's structure and planning the business. Enterprises in the state are often managed and operated in an efficient manner due to the progressive legislation in place. Since state officials have spent the last few years updating the legislature, business codes in Texas are leading statutes nationwide.
An acquisition can be described as one company assuming ownership of another company by purchasing assets or issuing stock shares. In certain circumstances, the company acquired in the acquisition may continue to exist as a separate legal entity. Acquired companies may remain a separate legal entity, but many of these dissolve, and the proceeds from the transaction are passed onto shareholders. In these types of acquisitions, the buyer assumes al liabilities of the company that was acquired.
In many cases, executive officers from the acquired company may be invited to the join the management team of the parent company. A company may also purchase a controlling stock of another company, making the newly acquired company its subsidiary going forward. Board members and shareholders of the selling company must usually approve a sale of a corporation's assets. When a company sells assets essential to its operations, the transaction may be referred to as a sale of substantially all.
Corporations planning to initiate any acquisitions or takeovers typically consult legal counsel before making any final decisions. Business lawyers may be able to review the nature and terms of the new agreement in an effort to minimize the potential for adverse legal action developing in the future. Legal counsel may also be effective in assisting with negotiations or drafting new agreements.
Source: Findlaw, "Overview of Acquisitions", Stephens & Stephens, October 21, 2014