What Is The Difference Between a Merger and Acquisition?

What Is The Difference Between a Merger and Acquisition?

What Is The Difference Between a Merger and Acquisition?

What Is The Difference Between a Merger and Acquisition?


Mergers and acquisitions are two standard corporate restructuring methods that companies use to enhance their worth and increase their profits. When it comes to the business world, it is not unusual to hear both words used interchangeably. In reality, the difference between a merger and acquisition is vast.

To help you better grasp the difference between merger and acquisition corporate restructuring, we’ll take a deeper look at both concepts.

What Is A Merger?

In business, the difference between mergers and acquisitions is that mergers are the voluntary joining of two businesses on essentially equal terms to form a single new legal company. The companies that have agreed to combine are nearly similar in size, clients, and scope of operations.

The most frequent reasons for mergers are to gain market share, decrease operating costs, expand into new areas, combine shared goods, raise revenues, and improve profits, all of which should benefit the shareholders of the acquiring and merging companies. For smaller companies, it is to move from one state to another and continue to have the same EIN and tax status. Immediately after a merger, shares of the newly formed firm are given to the existing shareholders of the two original companies.

Types Of Mergers

Horizontal Merger

A horizontal merger happens when two businesses in the same industry combine. Typically, a merger occurs as part of merging two or more rivals that provide the same goods or services. These mergers are frequent in sectors with fewer companies to create a bigger company with a more significant market share and economies of scale since rivalry among smaller firms is often more intense.

Vertical Merger

Vertical mergers occur when two businesses that manufacture components or services for a product combine. Vertical mergers occur when two companies operating at distinct points along the supply chain of the same industry combine their activities. These mergers are made to maximize synergies created by cost savings associated with merging with one or more supplier businesses.

Product Extension Mergers

Congeneric mergers are referred to as Product Extension mergers. This is a merger of two or more businesses that operate in the same market or industry and share common technology, marketing, manufacturing processes, and research and development characteristics. A product extension merger occurs when one business adds a new product line to another company’s current product line. When two businesses merge under the premise of a product expansion, they get access to a broader set of customers and, therefore, a greater market share.

Conglomerate Merger

A Merger of two or more unconnected businesses. The businesses may operate in a variety of sectors or geographical areas. A pure conglomerate is comprised of two unrelated businesses. On the other side, a mixed conglomerate is formed when companies with unrelated commercial operations combine in order to obtain a product or market expansion.

Market Extension Merger

This kind of merger happens between businesses that offer comparable goods but operate in distinct markets. Companies that enter into market extension mergers do so in order to acquire access to a larger market and, therefore, a more extensive customer base.

What Is An Acquisition?

An acquisition occurs when one firm acquires the majority of all of the shares of another company in order to take control of that business. Purchasing more than 50% of a target business’s stock and other assets enables the acquirer to make choices regarding the newly acquired assets without obtaining permission from the company’s other shareholders. Acquisitions, which are very frequent in business, may occur with or without the target company’s consent. During the approval procedure, there is often a no-shop provision.

We often hear about acquisitions of big, well-known businesses because these massive and important transactions frequently dominate the headlines. However, they are more common with smaller companies.

Companies purchase other companies for various reasons, and they may be looking for economies of scale, diversification, higher market share, enhanced synergy, cost savings, or new specialized products. Among the other motivations for acquisitions are those mentioned below.

  • Enter a Foreign Market
  • Decrease Competition
  • Growth Strategy
  • Gain New Technology

Types Of Acquisitions

Friendly Takeover

If the target company agrees to be acquired, a friendly acquisition occurs.

Buyout Takeover

The acquiring company acquires control of a business by purchasing more than 50% of the company’s shares.

Hostile Takeover

Unfriendly acquisitions, often referred to as “hostile takeovers,” occur when the target business does not agree to the acquisition being made.

Hire An Experienced Business Attorney!

The Law Office of EC Lewis PC has provided Legal Solutions for Small Businesses for over a decade including helping businesses understand the difference between a merger and acquisition and determining which is right for their business. We aim to provide sound legal assistance to businesses of all types. Assisting businesses ranging from single proprietors who are just getting started to corporations with over 100 staff and an expanding customer base, we take the time to get to know each of our customers and offer personalized service. If you have more questions about the difference between a merger and acquisition or how to get the process started, contact us today!

Do I Need A Lawyer To Incorporate My Small Business?

Do I Need A Lawyer To Incorporate My Small Business?

Do I Need A Lawyer To Incorporate My Small Business?

One of the most important first decisions you’ll make as a business owner is selecting the business structure. If you and your attorney determine that a corporation is the correct business structure, there are some procedures to follow in order to correctly file the necessary paperwork, and having a small business attorney to help can end up saving you time and money in the long run. 

What is a Business Corporation?

A corporation is a legal entity independent from its owners. Depending on whether you are taxed as an s-corporation or a c-corporation, corporations may have profits and may owe taxes. Corporations taxed as s-corporations and c-corporations typically give the owners (shareholders) limited liability protection and the corporation is held legally responsible for its actions. While corporations provide protection from personal liability for their owners, corporate record-keeping, operations, and reporting must be more meticulous. Most businesses that will need to raise capital or that plan to “go public” benefit from incorporating. 

Benefits of Incorporation

There are several advantages to forming your business as a corporation:

  • A corporation minimizes your personal liability and may provide you with tax benefits.
  • Health and life insurance premiums may be deducted from your company’s gross income on the company’s tax return.
  • Incorporating also means that people will treat your firm seriously, and you’ll be able to lay the groundwork for future growth.
  • You may raise cash for your company by selling shares.
  • If you decide to sell your company, there may be advantages to being a corporation.

Basic Incorporation Procedures

The process of incorporating your business can vary depending on what state your business operates in, but in general, there are a handful of procedures that apply such as:

  • Selecting a name for your business and researching whether or not another corporation has registered the name
  • Preparing article of incorporation
  • Filing articles of incorporation
  • Choosing a board of directors
  • Adopting bylaws
  • Electing officers
  • Registering an agent to accept legal documents
  • Issuing stock
  • Determining whether you want to be taxed as an s-corporation or c-corporation and filing the appropriate documents to be taxed as you determine
  • Filing to obtain a business license
  • Obtaining an EIN to tax purposes

Do I Need a Lawyer To Incorporate My Small Business?

It is possible to incorporate your small business without the assistance of a lawyer, but it may not be the best route to take. Legal fees can be an expense that many new business owners don’t want to pay. However, keep in mind that there may be a higher cost to doing it yourself: You put yourself through the tedious process and the risk of making mistakes if you don’t do very thorough research. The paper-filing process isn’t the hard part, but the do-it-yourselfer may not be aware of tax and legal liability issues. Securities regulations might be complicated if you plan to offer shares, even to those that work in the company or close friends and family.

Get Advice Before Incorporating Your Business

The structure you choose for your company has implications for ownership and how the law views your organization. The agreements you make with yourself, the business, and the other owners will have a lasting impact. Consulting with a business attorney who has expertise in creating these documents about your future plans might be the difference between a successful company and one that fails. If you’re ready to form a corporation or you’re still wondering, “do I need a lawyer to incorporate my small business”, contact the Law Offices of E.C Lewis today. 

What Does a Contract Lawyer Do?

What Does a Contract Lawyer Do?

What Does a Contract Lawyer Do?

What Does a Contract Lawyer Do?

Contracts are legally enforceable agreements that are a part of day-to-day business operations for companies of all sizes. Contracts should not be written or signed haphazardly, especially when your business and livelihood are on the line. It’s critical to understand the legal consequences of what you’re entering into and ensure that the contracts created by your business are legally sound. That is where contract lawyers play an essential role. So what does a contract lawyer do, exactly? 

A contract lawyer’s tasks and responsibilities include contract drafting, contract reviewing, and ensuring the interests of their clients are protected. Contract attorneys are familiar with contract requirements and how to ensure that they will be enforceable. Certain legal features and wording are frequently required in these sorts of contracts. A contract lawyer may assist a corporation or individual in including the terms essential for their commercial requirements, as well as any legal terminology that the individual may not be aware of. A contract lawyer may also be able to recommend a litigation attorney who can represent a client when a contract is breached. 


Contracts for Startup Businesses


Starting a business has various components, from developing your initial idea to hiring your first employee, and each stage may present new obstacles. A contract lawyer can assist you in determining which contracts are required between you, your partners, and your company. Even if you are the only proprietor of your company, you may require agreements between you and your company to protect your limited responsibility. Third parties you wish to do business with may demand business agreements in order to move forward as well. A contract lawyer can ensure that the contracts you create and sign are the appropriate ones for your company and needs. 


Ongoing Business Contracts


Contracts are a necessary element of running a business. Contracts aid in the development of both your company and your commercial connections. Documents like your Employment and Independent Contractor Agreements, as well as Nondisclosure Agreements, are critical to legal compliance. Because you will use these papers frequently, it is critical that they be done correctly the first time and reviewed annually to ensure that they continue to satisfy your business’s demands and current legal requirements. Master Service Agreements, Vendor Agreements, Lease Agreements, and Manufacturing Agreements are also contracts you may encounter or need to draft during your time as a business owner. 


Specialty Agreements


There are some agreements that may need to be reviewed once a year or even less frequently, but if you lapse, you may cause a bit of trouble for yourself. It’s all too easy to forget about your software license agreements, online privacy policies, and website terms of service. A contract attorney will make sure you’ve taken all of the required measures, and if there happens to be a website dispute or software licensing violation, they can refer you to a litigator who can represent you. Intern Agreements and Professional Engagement Agreements are two other types of specialty agreements you could encounter as a small business owner.

How Much Does A Contract Lawyer Cost?


The cost of a contract attorney varies depending on the attorney’s experience and the specifics of the case. While most attorneys charge hourly, you may find some attorneys charge by the contract. Contract attorneys that are drafting or negotiating contracts may cost a different hourly amount than an attorney that does litigation regarding contract breaches. Most attorneys can give you a range of fees for different contract issues so that you have an idea of how much things will cost before you hire an attorney.

Contract Law at the Law Offices of E.C. Lewis 


If you have contracts that need to be reviewed, you’re disputing a contract, or need to address a potential breach of contract, don’t hesitate to reach out to schedule a consultation. Elizabeth Lewis is an experienced contract law attorney who continues to help businesses all over the Denver metro area, Colorado, North Carolina, throughout the United States, and internationally with their contract law needs. Schedule online now or call 720-258-6647!


Small Business Legal Checklist

Small Business Legal Checklist

Small Business Legal Checklist

As a small business owner, you must wear a lot of hats! Unfortunately, one of the hats that is difficult to wear is the one involving legal matters. Whether you are just starting a business, are making changes in your current business structure, or are exiting a business, getting small business legal advice can be crucial. In an ideal world, you want to protect all you’ve built as much as you can and avoid any missteps along the way. Use this small business legal checklist to get your legal matters in order to prevent feeling overwhelmed or anxious about missing an important step.

Legal Help for Starting a Business

Starting a business often requires the most attention and legal advice since there are many different things to consider, such as:

Choose Your Business Structure

During business formation, you will need to select from a variety of legal structures for your company. This should be one of the first items on your small business legal checklist. Each type of business provides distinct organizational possibilities, each with its own set of tax and liability concerns. Prior to making a selection, you should extensively examine each legal structure and speak with an attorney and an accountant. These business types include:

  • Sole Proprietorship
  • LLC
  • Partnership
  • Corporation

Forming Contracts Between Owners

A contract is a legally binding agreement between two or more parties. If you own your business with other parties, it is important to have sound contracts stating the parameters of ownership – you can think of it as a prenup agreement for your business. Contracts are meant to protect your business and resources, as well as your personal assets if they are correctly constructed. Unfortunately, faulty contracts may do the opposite.

Contracts with Third Parties

As a small business owner, you will likely have contracts with customers, vendors, employees, contractors, and other individuals or businesses. While some business owners still rely on handshakes to confirm an agreement, in the legal realm, the one who has everything written down is usually the winner, especially if the terms are clear and concise. Always acquire a written confirmation, especially when the agreement involves the exchange of money or intellectual property.

Legal Help For An Existing Business

Even if you have already been in business for many years, you still may encounter situations where you need legal advice, such as:

Signing A New Lease

Throughout the life of your business, you may lease several different office spaces, whether it is for relocation or an additional location. The laws surrounding a commercial lease vary from state to state. When entering into a commercial lease in Colorado, consider factors such as what is prohibited on the property, how rent is calculated, if the rent will increase over time, and what obligations you have as a renter. Being a commercial renter is extremely different from residential so make sure you know what you are getting into before you sign a commercial lease.

Employment Law

Once your business has been up and running for a while, you may find that it’s time to start hiring employees. Both Colorado and federal employment laws aim to identify and defend the rights of employers and workers in the context of a commercial relationship. The objective is to guarantee that all parties are treated fairly by each other and the courts if required. There are subtle differences between employees and contractors that a small business lawyer can help you sort through.

Legal Help When Ending a Business

The process of exiting, dissolving, or selling a business can be tedious and require consulting with an attorney with experience in this area and matter such as:

Closing a Business Without Selling

Before you can close the doors on a business for good, a lengthy number of processes must be completed. These frequently involve legal procedures that involve the help of a business attorney. In some cases, in addition to the lawyer, an accountant is required to dissolve the firm. While a legal representative can verify that legal paperwork is completed appropriately, an accountant can examine revenue, income, and all outbound transactions to ensure that everything is lawful and that the books are free of any questionable activity. Depending on the reasons why the business is closing, you may also need the help of other professionals which your attorney or accountant can recommend based on your circumstances.

Transferring A Business To A Successor

When the owner or a senior-level partner retires, becomes disabled, or dies, small firms and partnerships without sound succession plans often collapse. Family companies, in particular, require proper succession planning because they must either identify family members who are suited for leadership roles or consider other possibilities outside the family and consider tax implications for transfer of the business to the next generation. The keys to a successful hand-off include planning ahead of time, basing decisions on business needs while also managing family expectations for family businesses, knowing the current state of tax law, and reviewing the plan as conditions change.

Selling Your Business To A New Owner

There are several factors to consider when selling a business, such as the business’s value, what portion of the company will be sold, and when the sale will take place. It is crucial when drawing up a purchase agreement that a business attorney with experience in business sales or acquisitions takes the time to thoroughly review all documents.

Elizabeth Lewis, MS, JD Is Your Denver Small Business Lawyer

Regardless of what stage your business is in, this small business legal checklist should help you identify areas where you may require legal advice. Law Office of E.C. Lewis, P.C. understands that the laws governing these areas are always changing, so even if you’ve run a Denver small business for decades, it’s a good idea to keep in touch with a Colorado business attorney on a regular basis to discuss any recent changes. Schedule a consultation today!

Will Corona virus affect your business?

Will Corona virus affect your business?

Even though I am a business attorney, I worry like most business owners about current events. Recently, the news and the markets have been rattled by the outbreak of the corona virus. Like me, you are probably wondering how the virus could affect your business and how to mitigate any damages that could be caused by it.


For companies that manufacture products (or have products manufactured for them by third parties), the biggest area of concern is where your products are manufactured and where the raw materials to manufacture them come from. If you use manufacturers in China or other areas where the corona virus has shut down factories, you should be looking at securing other manufacturers. Legally, entering into contracts with these manufacturers earlier rather than later may help you against competition that hasn’t done so.

For companies that provide retail or hospitality services, ensuring that you have enough staff to cover for sick employees could be essential. While you may not want to hire additional employees, you can reach out to companies that have different hours or, if your employees are mostly part-time, to companies that also have mostly part-time employees. You can have an agreement with these companies that if either of you are short staffed, you can call the other company to use their employees while they aren’t working for them. Of course, you would want to discuss this with your business lawyer or employment lawyer before you do so to find out the best way to structure the arrangement.

For companies that can offer it, having employees work from home can help mitigate the spread of any disease and keep your business up and running. Essential personnel can still report to the office, but by having less employees at the office, your essential staff can try to maintain CDC recommended distances from each other. Prior to allowing employees to work from home, it is important to contact your insurance company to see if there are any issues with this arrangement. You will also want your business attorney to write agreements for employees to sign if they are going to take any company property home with them, such as a laptop, cell phone, or printer.

Lastly, ensuring that sick employees do not come to work is key. While this is a good policy anyway, with the spread of the flu and potentially the corona virus, it is extremely important. One sick employee at work could easily create a situation where ten employees are out a few days later.

If you need help with any of the agreements listed above, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney


Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246

Online at: