Question

In your own words without plagiarizing and with citing in APA any sources please explain the following; Between buying a business, selling a business, or merging with another business, which is the best approach for you as an entrepreneur? What are the legal issues you would encounter with your choice? How do you plan to protect yourself, legally?

Answer 1

Buying a Business: It is the situation when any person or society decide to buy an established business rather than wasting time, money and resources on establishing their own new business. As establishing a new business is a very difficult and risky task for any one, At the first stage of establishing a business the organization has to go through many steps and process but in the case of buying an established business it really very easy.

Selling a Business: It is the situation when any other organization sells its all business operations, assets and goodwill to any other organization in a legal way is known as the selling of the business. This situation usually happens when the current management of the organization is no more capable of managing the business or any other specific reason.

Merging with another Business: This is the situation in which both the organization combines with each other and becomes a single organization. In this type of situation the powers and resources of both the organizations are equally divided with each other.

In a point of view of an entrepreneur the option of Merging with another Business is the best decision that can be made, Let us understand this by some simple points as given below:
1.   In any situation of Buying or Selling the business totally eliminates opportunity to grow or give itself a second chance to run in the market again but in the case of merging with another business the weak organization gets a chance of learning new things and understanding the week areas of their organization.
2.   It opens a hole new area of new kind of customers and they get a chance to improve in the customer satisfaction concept and make new changes that are required by the organization.
3.   The strong and well established organization helps the week organization to stand up again on its feet and help it to recover, By providing a highly professional team of operations and management which will eventually improve the quality of the operation of the organization.

As we all know that business are considered as a separate legal entity so in case Merging a business with other one is not a easy task for any entrepreneur he will have to face some problems in the process they are follow:
•   The organization will have to stand in front of all the stake holders and government agencies before filling any request for combining with any other organization which was competitors in the market with them.
•   The organization will have to surrender all its shares and belonging to the other business and for that the organization will have to take several approvals from the government and Registration authorities.

As merging an organization with any other is totally a legal process it is really very important to stay alert at all the steps. So now let see what can be done save our organization while merging legally.
•   First and very important step is to go through all the existing contracts and agreements which are established among the organizations and make sure that not any a single article in that agreement is going to harm the operation and core structure of the organization in any manner.
•   Both the organizations should undergo through notice period in which they will promote and give the investors and other government body`s the actual time of merging on notifying them that when the merger process will start and how they are going to work in the future.