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What are mergers and acquisitions in business law?

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A business may stand alone for years as a fully separate and independent entity until the day comes that it chooses or is forced to close. However, many Florida businesses go through changes when they join with and split from other corporations and organizations. When two or more businesses combine into one entity, the process of coming together can be called a merger.

A merger is similar to an acquisition. While they both involve the joining of at least two entities, the term acquisition is more often associated with the purchase of a smaller business by a bigger business. When this happens, the smaller business is often folded into the operations of the bigger business.

Mergers and acquisitions are complex legal events. Before a company decides to merge with or acquire another business, it should make sure that the entity it is looking at is in good financial and legal standing. Taking on the debts or legal liabilities of another company can be devastating to a business.

Information about the success and health of a business can be found in its organizational and financial documents. The information contained in these and other required records can give other companies the information they need to decide if a merger or and acquisition is a good decision.

Before entering into a business merger, an individual may wish to consult with a business law attorney. A bad business deal may cripple the future of a business that an owner has worked their entire life to build. Legal guidance can give individuals the confidence they need to make informed choices about the management of their companies.