How do mergers and acquisitions work?

Mergers and acquisitions are two different ways of restructuring business relationships. A merger happens when two companies combine to form one new larger company. An acquisition occurs when one company buys another company and becomes its new owner. In Pennsylvania, mergers and acquisitions are strictly regulated by the Pennsylvania Corporations Law, which outlines the steps that must be taken to properly and legally combine or purchase a business. First, the parties involved in a merger or acquisition will need to negotiate an agreement. This agreement outlines the terms of the merger or acquisition, such as how the new company will be structured and governed, who will hold what positions, and what assets will be owned by the new entity. Once the agreement is finalized, the merging or acquiring company must then file a Certificate of Merger or Consolidation with the Pennsylvania Department of State. This document outlines the terms of the merger or acquisition and must be signed off by a lawyer. After the Certificate of Merger or Consolidation is filed, the companies must also file other documentation with the Department of State, such as a notice of the merger to the public and a statement of intent. The Department of State will also review the proposed merger or acquisition to make sure it complies with the law. Once all these steps are completed, the companies can move forward with their merger or acquisition. Once it is complete, the new entity will become the successor to any liabilities and will be responsible for fulfilling any duties or obligations of the previous companies.

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How do mergers and acquisitions work?

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