A Business Merger Agreement is a document used when two businesses would like to combine business efforts by merging into one business. In this Agreement, one business, known as the Dissolving Entity, will dissolve and merge into the other business, known as the Surviving Entity. The parties will have created what is now known as the Merged Entity. Once the merger is complete, the Merged Entity will be organized under the bylaws of the Surviving Entity, but will file a new Articles of Incorporation (for corporations) or Articles of Organization (for limited liability companies) with their secretary of state.
Merger Agreements are common between competing businesses that wish to combine forces to become a stronger business in the end. Further, a struggling business that is unable to acquire enough capital or investments to continue in operation may seek the option to merge with another, stronger business. By using a Merger Agreement, the parties can set the rules and guidelines for how they will operate until the merger is finalized, outline the assets and liabilities of each business, and explain how the parties will be compensated for the merger.
In a merger, the two companies will merge and become one new company, whether under the name of the Surviving Entity or under another name entirely. However, if the companies would like to combine efforts while remaining two separate companies, they can instead use a Non-Equity Strategic Alliance Agreement (if the parties will not have interest in each other's company), a Collaboration Agreement (if the parties will buy equity in each other's company), or a Joint Venture Agreement (if the parties will create a new company while also maintaining their existing companies). If one company will be purchasing another company, with the purchased company ceasing to exist and the purchaser company continuing to exist as it did before the purchase instead of creating a new entity entirely, a Business Sale Agreement should be used. This process is known as an acquisition.
By using a Business Merger Agreement, the parties can outline the details of their arrangement and ease the transition as two companies become one.
How to use this document
This document covers all of the important information necessary for two businesses to come together in a merger, creating a newly merged business, including the following details:
The parties can discuss the terms of the Agreement and create and sign the final Agreement prior to the merger occurring.
After inputting the required information, this Agreement is printed out and signed by both Parties, and then kept on file by both parties for the duration of the Agreement as well as for a reasonable period of time thereafter.
Applicable law
Merger Agreements are subject to the laws of individual states. There is not a single federal law covering the requirements for a Merger Agreement. This is because each individual state governs the businesses formed within that state.
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Business Merger Agreement - FREE - Sample, template
Country: United States