A Private Placement Memorandum (“PPM”) is a detailed legal document used to offer ownership stakes in a company to investors who are Accredited Investors as defined by Regulation D of the Securities and Exchange Commission (“SEC”). It serves as a tool for raising capital, especially when traditional financing options are unavailable or unsuitable.

Mergers and acquisitions (“M&A”) involve complex processes, with due diligence playing a pivotal role. Among the essential components of an M&A transaction are disclosure schedules—documents that complement and support a seller’s representations and warranties. Properly prepared disclosure schedules can mitigate liability risks for sellers and ensure smoother transactions.

An M&A (Mergers and Acquisitions) lawyer is at the core of the deal-making process, acting as the central figure in a network of deal parties and advisors. The M&A lawyer is typically the main point of contact for all involved parties, overseeing every aspect of the transaction to ensure it reaches a successful close.

Drag-along rights are contractual clauses, typically found in shareholder agreements, that empower majority shareholders to compel minority shareholders to participate in a company sale. These provisions play a significant role in aligning shareholder interests, especially when majority owners wish to proceed with a transaction.

In mergers and acquisitions (“M&A”), the primary transaction agreement typically includes representations and warranties (or “reps and warranties” or just “reps”) from each party to the other. These statements address various aspects of a party’s status, business, assets, liabilities, properties, condition, operating results and future prospects. Representations and warranties often span 15 to 30 pages within the transaction agreement and may extend further when referencing definitions. Drafting and negotiating these terms is a significant part of any M&A deal.

If you want to establish a business while safeguarding your privacy, forming an anonymous LLC could be a good option. Although Texas does not permit the formation of anonymous LLCs, you can register your LLC in a state that does, and then bring it to Texas.

M&A agreements often include terms that allocate some risk to the seller, such as indemnification and termination provisions. A critical part of these agreements is the Material Adverse Effect (“MAE”) clause, sometimes called a Material Adverse Change (“MAC”) clause.

In business mergers or acquisitions, especially for small- to medium-sized businesses, retaining key employees is a critical component of success.

When buying or selling a small business, it can be tempting to skip hiring a lawyer and rely on templates or simple agreements. However, we strongly advise against this. Even in small transactions under $100 million, the stakes are high: sellers want a fair return without lingering legal issues, and buyers need to protect their investment. A properly drafted purchase agreement is essential, as small business sales involve many moving parts.