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Some Common Pitfalls to Address Pre-Deal
Customer Concentration Could lead to a significant discount off of sale price if the selling business has one customer that accounts for 25% or more of its revenue. One way to bridge a valuation gap is for the seller to obtain an earn-out of a percentage of...
The M&A Deal Process
Timeframe: M&A transactions are typically at least a four-month process, six months is common, and eight months is long. Structure and Potential Buyers: Asset or equity deal An asset deal is a deal in which the buyer buys certain assets, and excludes certain...
Starting a Company or Hiring a First-Time General Counsel: Some Legal Action Items
Choice of Entity: Consider whether a S corporation election or LLC is appropriate. Both limit liability to some extent and both allow flow through single-level taxation. Some companies are now forming as an LLC to avoid the restrictions imposed on S corporations, such...
Critical Legal Components of Commercial Contracts
Indemnification Indemnification addresses when one party pays for the other party’s losses or liabilities, such as losses caused by the other party’s breach of the contract. It can be a nuanced provision (i.e., does one party cover a loss caused by a subcontractor?...
The Contracting Process
Forms: Create form contracts for frequently utilized contracts. Common examples include a form non-disclosure agreement, form supply contract and form client contract. Start Discussions with a NDA: Start contractual discussions, whether with a supplier, client or...
The Fundamentals of a Deal Letter of Intent
A letter of intent is generally the first agreement a buyer and seller agree to and sign in a transaction. It lays out the key terms of the deal, and for the buyer, it frequently includes a “no-shop” timeframe restricting the seller from selling or shopping the...