Are you searching for an experienced California stock purchase lawyer for a merger or acquisition?  A stock purchase is much more legally and financially complex than a simple asset purchase.  When should you use a stock purchase agreement for your corporation?  How can the Mergers and Acquisitions attorneys at the Watkins Firm focus their more than 40 years of experience in these complex legal, financial and business transactions to protect your interests and accomplish your goals?

A stock purchase agreement is simply a business contract that transacts a portion or all of a company’s stock to another company, individual or group of individuals.  In some cases this may simply be a new investor who is taking a financial position in the corporation.  The stock purchase agreement should specify the percentage of the company or shares of stock involved in the transaction, the financial and voting rights of the purchaser(s) as well as their rights as a shareholder.

If the purchaser will be taking an executive or management position in the corporation, there is often a performance expectation. If the stock purchase authorizes a seat on the corporation’s Board of Directors it should specify details such as voting proxies, contingencies based upon outcomes or the circumstances which might justify removal from the Board.  It is important to review existing bylaws and the shareholders’ agreement to make sure they are up-to-date and fully capture the essence of all agreements on the table.

When you work with an experienced California stock purchase lawyer at the Watkins Firm we carefully tailor an agreement from our proprietary library of proven M & A contracts and due diligence checklists that captures the intent of the parties. In other instances we are hired to review contracts provided by the corporation itself in order to protect our client’s interests and objectives.  We advise our clients on the potential for liabilities which might arise from the transaction and work to protect their interests in the deal whenever possible.  We work to ensure the final document(s) have clearly and thoroughly addressed the agreement of the parties and are properly executed.

Pro-Tip: “In some cases, sellers are motivated to deal with stock sale and also sometimes they’ve got a system set up with employees. A stock purchase can provide several advantages such as the credit worthiness of a long-term business. You’ve got banking relationships. You’ve got accounting firms already in place. You’ve got everything set up, and you’re just coming in to stand in the shoes of the seller. And in those cases, you’ll have the seller stand in for three years maybe to help with the transition. And so it can be a lot smoother, and you end up with an entity with a long history, and also you end up with an entity you can resell.

Everybody’s different. Every transaction. Different people who own companies that sell companies have colorful personalities and they’ve gotten successful by doing things in a certain way, and you have to be able to work with them on their terms. So you meet with them, you find out what they want. You run some ideas by them, you run it by their accountant, and then you come up with a letter of intent. Or if you’re the buyer’s counsel, or even if you’re the seller’s counsel, you start discussions off and then somebody turns it into a letter of intent.

A Letter Of Intent (often referred to as an LOI) can be an offer, and a letter of intent can be, this is our understanding. In fact, we sometimes call that a Memorandum Of Understanding (or MOU). So if you have these kinds of discussions, they’re just outlines for how to close a deal, and that’s all a good lawyer needs is a one or two page outline. And we can take it and put all the what ifs in there and ask you a whole bunch more questions and have the accountants ask you questions, and whoever provides the financing, if that’s the case, ask for what they want and bring it all together into an agreement that ends up closing.”

If you are searching for a proven, experienced California stock purchase lawyer we invite you to review our podcast Episode 40 – Keys to a Successful Stock Purchase Acquisition as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.