Considering a Merger in Texas? Cover Your Legal Bases.
Posted on Friday, March 4th, 2016 at 7:07 pm
While mergers are common in business, every deal has its legal nuances and complexities, and even minor mistakes can have long-term and costly effects. In addition to the legal agreements between the merging entities, the new or restructured corporation typically must create new or updated contracts, procedures and corporate bylaws.
Slater Pugh, Ltd. LLP, provides all of these legal services to merging and newly forming entities. Our firm assists Texas companies in:
- Creating or amending corporate bylaws
- Creating co-owner contracts
- Outlining shareholder relationships and negotiations
- Creating contracts that determine payment distribution
- Negotiating any severance pay issues
Merger Filing Requirements
A certificate of merger must be filed with the Texas Office of the Secretary of State if any of the filing entities is a domestic entity, or if the purpose of the merger is to create a domestic entity.
Merger filings in Texas typically include a plan of merger, plus any additional attachments required by the Texas Business Organization Code. For example, Texas entities created through a merger must provide additional statements regarding any amendments or changes to a certificate of formation, which must be attached to the merger filing.
As an alternative to filing a complete plan of merger, the merging parties may choose to complete and certify specific statements in the Alternative Statements section of the required form.
The Secretary of State notes two of the most common reasons for the rejection of mergers:
- Failure to include appropriate additional statements
- Failure to obtain the correct certificate of account status from the comptroller
It goes without saying that any business owner or organization considering a merger should have experienced legal counsel every step of the way, whether you’re filing the required forms, creating new contracts or updating your bylaws.
For more on these matters, please see our overview of business and corporate law.