When you're ready to make two businesses one, or to bring another company into your fold, a Merger Agreement paves the way. You'll use it to dissolve one company into another, whether you are retaining one company's name or christening the venture anew.
Use the Merger Agreement document if:
You want to merge another company into yours (surviving entity) to better position your company in the market.
You have agreed to dissolve your business into another business.
Mergers are common between competing businesses that agree to join forces. A Merger Agreement may be used when one company purchases another, or when a struggling company seeks the refuge of a more successful one. A Merger Agreement will set the rules for the new organization until the convergence is finalized. It includes an accounting of the assets and liabilities for each company, as well as how each company's shares will be valued under the new entity. During a merger, companies may be continuing daily business operations, so you'll want to decide on guidelines such as the maximum length for new contracts during the transition. The new company will need a new board of directors, and a process for appointing them. No two mergers are alike, there's bound to be some growing pains. Penning the details is the key to making the transition as smooth as possible. Other names for this document: Agreement and Plan of Merger, Merger Agreement Form, Definitive Merger Agreement