Examining the Different Types of Business Mergers and Acquisitions

DuPage County mergers and acquisitions lawyerMergers and acquisitions are highly misunderstood legal terms, and are often considered to be synonymous among small business owners and the general population. However, there are some distinct differences between the two; understanding them and how they change the dynamics of a business transaction can be critical for ensuring a company’s future success.

Mergers

A merger is a business transaction in which two companies join together to form one company. Many times, one of the two companies ceases to exist. One example is the2007 merger between Digital Computers and Compaq in which Digital Computers was absorbed by Compaq.

Yet, not all mergers are the same. Instead, there are five types of mergers, all of which are listed and described below:

  • Horizontal merger. This involves two companies in direct competition with one another, both in market and product line.
  • Vertical merger. This is an agreement between two companies in a similar industry, but different type of business. An example would be a merger between a framing company and a drywall company.
  • Market-extension merger. An agreement between companies in different markets but with similar products.
  • Product-extension merger. An agreement between companies in similar markets that sell distinct products.
  • Conglomerate merger. Two companies with seemingly nothing in common merge. An example would be an electronics company merging with a company that sells car parts.

Acqusitions

An acquisition is a business transaction in which one company purchases another company. The latter of ceases to exist. In this scenario, the buyers take over the operations and decision-making of the purchased company. Many times, acquisitions have negative connotations, while mergers are viewed in a positive light. Whatever the case may be, it’s important to know that there are three main acquisitions

  • Strategic Remix acquisition. This is an agreement in which the acquired asset, including operations and product line, are combined with an existing business to increase profit.
  • Private Equity acquisition. This is when a company buys another business at a cheap price, pumps it full of resources, and then sells it at a higher cost.
  • Alphabet acquisition. An agreement between two companies that is a hybrid of the other two types of acquisitions. When this happens, the buyers take on the operations and product line of the acquired company with the intention of waiting to see how the acquired company does. If they improve, the buyers have the choice to sell or pump in more resources and potentially keep running the company for their own profit.

If you are looking to enter the world of mergers and acquisitions, contact Stock, Carlson, Oldfield & McGrath, LLC. Backed by more than 40 years of legal and business experience, our Wheaton small business attorneys can help you make informed decisions about your organization’s future. As a small business ourselves, our legal team knows how important a transaction like this can be for your business’ future. Call 630-665-2500 to schedule a consultation with our office today.

Sources:

https://www.investopedia.com/terms/m/mergersandacquisitions.asp

https://www.investopedia.com/terms/m/mergersandacquisitions.asp

https://www.investopedia.com/terms/m/mergersandacquisitions.asp

 

Establishing a Business in Illinois – What Entrepreneurs and Small Business Owners Need to Know

Wheaton small business attorneysFew things in life are as satisfying as running your own company and being your own boss, but such a privilege requires a lot of hard work and dedication. There are also multiple steps – some strategic, some legal – to starting your own company. Learn more about establishing a business in Illinois, discover what resources are available to you, and obtain detailed information on how a seasoned business law attorney can ease the process and help to ensure your business is protected in the years to come. 

Preparing for Business – The Initial Steps

Ideally, business owners would start preparing for business long before they plan to open their doors. They would have a complete a market analysis and have an in-depth business plan, and they would have already started to engage with people on social media to ensure they have a solid customer base before opening their doors for business.The world is not perfect, however, and sometimes business owners jump in, head-first, without really knowing what it takes to be successful in today’s digital world.

Thankfully, even if this occurs, there are ways to recover. There are also numerous resources at the business owner’s disposal, such as the Small Business Association (SBA), which offers detailed information on how to create a business plan. Entrepreneurs can also outsource some of the work, like social media engagement and website creation, to ensure they have more time to focus on other tasks, such as:

  • Conducting a market analysis;
  • Choosing and protecting your business name;
  • Developing a marketing plan;
  • Finding financing for your business;
  • Opening a bank account;
  • Hiring your first employees (if applicable);
  • Choosing a location for your business; and
  • Speaking with an attorney to ensure all the legalities of opening a business are covered.

The Legal Aspects of Opening a Business 

In addition to ensuring that your business has a solid customer base, creating a marketing plan, and setting up the company’s financials, business owners must comply with state and federal laws, including those relating to taxes and employment. These laws require that entrepreneurs: 

  • Decide on and create a business entity;
  • Register the business name;
  • Obtain a federal employment identification number, or EIN, (if applicable);
  • Register for local and state taxes;
  • Obtain any required business licenses or permits; and
  • Ensuring you meet all state and federal employment laws (if applicable).

Many of these aspects of opening a business contain multiple steps and complex processes. To reduce the chances of a mistake or missed element, business owners can seek the aid of a seasoned and competent business law attorney. 

Contact Our Wheaton Small Business Lawyers

As a small business ourselves, Stock, Carlson, Oldfield & McGrath, LLC understands the challenges and obstacles that entrepreneurs face when opening their own businesses. We aid in all ways possible, and we can even help protect your business from litigation and other legal issues in the future. Schedule a personalized consultation with our DuPage County small business attorneys to get started. Call 630-665-2500 today. 

Sources:

https://www.sba.gov/business-guide/

https://www2.illinois.gov/business/registration-licenses-permits

 

Medicare to Now Cover End-of-Life Care Sessions

end-of-life care sessions, end-of-life care, DuPage County Estate Planning AttorneyOn January 1, 2016, Medicare will begin covering the medical costs for patients who wish to participate in end-of-life counseling sessions. Many medical personnel already discuss these subjects with patients, however, they do not receive any reimbursement.

Under the new coverage, physicians and nurse practitioners, as well as other health care providers, will now receive payment for the time they spend discussing end-of-life options with patients.

A report issued in 2014 by the Institute of Medicine, "Dying in America," touted the importance of providing patients with the opportunity to discuss what life saving measures they do or do not want taken in the event that decision has to be made, as well as other end-of-life care options. The report found that many patients suffer through invasive treatments instead of receiving more comfort care, mainly because they never have end-of-life care discussions with their physicians, or even their families.

Medicare came up with the proposal, which was supported by Congress, as well as more than 50 organizations, including AARP and the American Medical Association (AMA).

A patient can have a counseling session either during his or her regular wellness checkup or during a separate appointment. Patients are encouraged to have these discussions with their doctors when they are healthy, as well as if they are struggling with a life-threatening illness.

The Institute's report also concluded that people may have different decisions depending on where they are in life. For example, a healthy person may choose extraordinary measures to be taken if he or she is in an accident, but do not feel the same way if he or she is facing a terminal illness such as cancer.

Once a person has decided what end-of-life care he or she wants, it is also important to decide who should legally oversee any medical or financial decisions that need to be made if the individual become too ill or incapacitated to make those decisions. A health care power of attorney and a property power of attorney will ensure that the person or people you wish to handle those decisions will be the one(s) making them.

If you need help in drafting powers of attorney, contact an experienced DuPage County estate planning attorney to assist you. Contact the law firm of Stock, Carlson, Oldfield & McGrath LLC, at 630-665-2500 today.

Sources:

https://iom.nationalacademies.org/~/media/Files/Report%20Files/2014/EOL/Report%20Brief.pdf

http://www.wsj.com/articles/government-proposes-to-pay-health-providers-for-end-of-life-discussions-1436396400

http://www.fayobserver.com/news/nation/medicare-to-cover-counseling-sessions-on-end-of-life-care/article_a5326736-7756-5cde-8f2d-68fae9cfb32f.html