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Acquiring another company through a merger

On Behalf of | Jan 23, 2023 | Business Law, Commercial Law

Mergers and acquisitions might sound like concepts from the world of multinational corporations. In fact, there are many small businesses in Texas that have used these tools to expand and modify their operations.

One potential use of a merger is to acquire another entity. This article will provide a brief overview of that topic.

What is a merger?

In general terms, a merger is something multiple businesses use to become a single corporate entity. All parties to the agreement decide on the exact terms, and there is typically only one entity left after the process is complete.

Mergers happen for various reasons. For example, a company might want to:

  • Expand its market presence
  • Integrate business-critical processes or personnel
  • Offer a wider range of products or services
  • Merge with a subsidiary

Mergers are not restricted to scenarios where larger companies buy out smaller ones.

How do companies merge?

Companies merge through the use of an official agreement. There are many official forms available, but several types of mergers require a specific instrument. Not all merger types have a dedicated form in Texas.

Aside from the completion of forms or the drafting of legal instruments, there are also various fees. For example, expedited handling is available at a per-document fee.

Upon confirmation and approval by the Secretary of State, the merger is official. Those who want to form a new entity as a result of the merger might want to confirm that they made all necessary statements before submitting documents.

There are many ways to grow a small business in Texas. Business owners typically review multiple strategies before settling on a merger.