Company acquisition refers to equity acquisition, which means that shareholders of the target company purchase shares, and then obtain all or part of the shares of the target company and gain control over the target company. Company acquisition process 1, internal decision-making procedure of the acquirer. The Articles of Association is a programmatic document during the company's existence and the basic basis for binding the company and shareholders. Foreign investment involves the interests of both the company and shareholders. The Company Law has no mandatory provisions on the company's foreign investment, and authorizes the company to implement it according to the company's articles of association. Therefore, in order to grasp the legitimacy of the acquirer's main authority, we should focus on reviewing the acquirer's articles of association. First, whether the internal decision-making procedure is legal and whether it has been resolved by the board of directors or shareholders' meeting or shareholders' meeting; Second, whether there is any limit on the amount of foreign investment, and if so, whether it exceeds the limit of foreign investment. 2. The internal decision-making procedures of the seller and the opinions of other shareholders. The essence of the seller's transfer of equity in the target company is to recover its foreign investment, which involves the interests of both the seller and other shareholders of the target company. Therefore, the seller must go through two procedures to transfer its equity. First, in accordance with the provisions of the articles of association of the seller, obtain the resolutions of the seller's board of directors or shareholders' meeting. Second; According to the Company Law, more than half of the other shareholders of the target company should agree. Procedurally, after the internal decision of the company, the seller shall notify other shareholders in writing of the transfer of its equity in order to obtain approval. If other shareholders fail to reply within 30 days from the date of receiving the written notice, they shall be deemed to have agreed to the transfer. If more than half of the other shareholders do not agree to the transfer, the shareholders who do not agree shall purchase the transferred equity; Do not buy, as agreed to transfer. Because the limited liability company is a company with strong human nature, in order to protect the interests of other shareholders, the company law has made corresponding restrictions on the equity transfer of the limited liability company and given other shareholders certain rights. The specific manifestations are as follows: First, if other shareholders agree to transfer shares, other shareholders have the preemptive right. Under the same conditions, other shareholders have the priority to purchase the equity transferred with the consent of shareholders. If two or more shareholders claim to exercise the preemptive right, their respective purchase proportions shall be determined through consultation; If negotiation fails, the preemptive right shall be exercised in accordance with their respective investment proportions at the time of transfer. Second, if other shareholders do not agree to the equity transfer, it meets one of the circumstances stipulated in Article 75 of the Company Law: (1) The company has not distributed profits to shareholders for five consecutive years, and the company has made profits for five consecutive years, which meets the conditions for distributing profits stipulated in this Law; (2) The merger, division or transfer of the company's main property; (3) If the business term stipulated in the Articles of Association expires or other dissolution reasons stipulated in the Articles of Association occur, and the shareholders' meeting adopts a resolution to amend the Articles of Association to make the company survive, the shareholders may require the company to purchase its equity at a reasonable price. If the shareholders and the company fail to reach an equity purchase agreement within 60 days from the date of adoption of the resolution of the general meeting of shareholders, the shareholders may bring a lawsuit to the people's court within 90 days from the date of adoption of the resolution of the general meeting of shareholders. 3. Procedures for examination and approval of state-owned assets and foreign capital If a state-owned holding company is acquired, it shall go through the examination and approval procedures with the controlling shareholder or the state-owned assets supervision and administration institution in accordance with the relevant provisions on the management of the transfer of state-owned property rights of enterprises. The transfer of state-owned equity shall be conducted publicly in the legally established property rights trading institutions, and the announcement of equity transfer shall be published in the economic or financial newspapers and websites of property rights trading institutions publicly issued at or above the provincial level, publicly disclose the information on the transfer of state-owned equity, and widely solicit the transferee. Transfer methods include auction, bidding and agreement transfer. Merger and acquisition of domestic enterprises by foreign investors shall conform to the requirements of China laws, administrative regulations and rules and the Catalogue of Industries with Foreign Investment. Involving the transfer of state-owned property rights of enterprises and the management of state-owned shares of listed companies, the relevant provisions on the management of state-owned assets shall be observed. When a foreign investor merges a domestic enterprise to establish a foreign-invested enterprise, it shall, with the approval of the examination and approval authority, register the change or establishment with the registration authority in accordance with these provisions. 4. The acquisition of a company by way of capital increase and share expansion shall be decided by the shareholders' meeting and approved by more than two thirds of the shareholders in accordance with the provisions of the Company Law. Matters needing attention in the early stage of company acquisition, the acquirer should negotiate with the target company or its shareholders to get a preliminary understanding of the situation, then reach an acquisition intention and sign a letter of intent for acquisition. In order to ensure the security of M&A transactions, the acquirer will generally entrust lawyers, accountants, appraisers and other professionals to form a project team to conduct due diligence on the target company; In order to promote the success of M&A project, the target company generally needs to provide necessary information to the acquirer, and disclose the company's assets, operation, finance, creditor's rights and debts, organizational structure, labor and personnel, etc. If you encounter malicious M&A or the information disclosed by the target company is untrue, it will cause greater legal risks to the other party. Therefore, in the preparatory stage of M&A, we suggest that M&A and M&A sign an exclusive negotiation agreement, and make a preliminary agreement on M&A's intention, payment guarantee, trade secrets, disclosure obligations, breach of contract and other matters (the acquirer is a listed company, so we should pay special attention to the other party's confidentiality and information disclosure support obligations), so as to avoid the arbitrariness of M&A process and protect the interests of both parties in the case of the breakdown of negotiations in the early stage of M&A. Due diligence (I) Scope of statutory due diligence The purchaser shall, with the assistance of the target company, clean up the assets, creditor's rights and debts of the target company, conduct an asset evaluation, conduct a detailed investigation of the management structure of the target company, and record the employees. In the due diligence stage, lawyers can make legal evaluation of the materials provided by the target company or the information obtained through legal investigation, and verify the relevant information obtained in the preparation stage, so as to make full information preparation for the acquirer to make the acquisition decision. The investigation and verification of the basic situation of the target company mainly involves the following contents (the specific contents of the investigation can be appropriately increased or decreased according to the actual situation of the M&A project under the premise of complying with laws and regulations): 1, and the business scope of the target company and its subsidiaries. 2. Relevant documents on the establishment and change of the target company and its subsidiaries, including industrial and commercial registration materials and approval documents of relevant competent departments. 3. Articles of association of the company and its subsidiaries. 4. The register of shareholders and shareholding of the target company and its subsidiaries. 5. Resolutions of previous board meetings and shareholders' meetings of the target company and its subsidiaries. 6. Identification certificates of the legal representatives of the target company and its subsidiaries. 7. Rules and regulations of the target company and its subsidiaries. 8. The target company and its subsidiaries sign acquisition contracts with others. 9. Whether there are restrictions on the transfer of the acquisition target, such as the establishment of guarantee, litigation preservation, etc. 10. Investigation on the relevant attached documents of the target company: (2) According to different acquisition types, the matters needing attention with different emphases are not independent of each other. Therefore, in the acquisition, we should comprehensively consider all aspects of attention. 1. If part of the equity of the target enterprise is acquired, the acquirer should pay special attention to excluding the preemptive right of other shareholders of the target enterprise after performing legal procedures. According to Article 72 of the Company Law: "When a shareholder of a limited liability company transfers its shares to a person other than a shareholder, it shall obtain the consent of more than half of the other shareholders." Under the same conditions, other shareholders have the priority to purchase the shares transferred with the consent of the shareholders of the company. If the target enterprise is a limited company, the purchaser should pay attention to asking the transferor to provide written documents that other shareholders agree to the transferor's transfer of its shares or have fulfilled the statutory notification procedures, and eliminate the shareholders' preemptive right through legal procedures before purchasing. Otherwise, even if the acquirer and the transferor sign the transfer agreement, the transfer agreement may not take effect because of opposition from others. 2. If it is to acquire the controlling interest of the target enterprise, the acquirer should pay special attention to fully understand the property and debt of the target enterprise. If the acquisition object is an enterprise legal person, the creditor's rights and debts of itself and its property will not be transferred due to the change of investors. If the acquisition object is a superficial or even insolvent enterprise, it will face great risks. Before implementing the acquisition, the acquirer should pay attention to the property of the target enterprise, especially the debt. In addition to the existing debts at the time of transfer, we must also pay attention to whether the target enterprise still has contingent liabilities, such as providing external guarantees or possibly taking joint liability in the future. In addition to inquiring and understanding through various channels, the purchaser may also require the transferor to list all debts in the transfer agreement, and require the transferor to bear relevant debts beyond the listed scope. 3. If it is the acquisition of specific assets of the target enterprise, the acquirer should pay special attention to fully understand whether there are rights defects in the specific assets. There are rights defects in specific assets, which may lead to the invalidation of the acquisition agreement, the inability of the acquirer to obtain the ownership of the specific assets, the obstacles to transfer or the failure to achieve the transaction purpose. Therefore, the acquirer needs to pay attention to whether there are rights defects in the specific assets to be acquired. In the case of uncertainty, in order to safeguard its legitimate rights and interests, the transferor may be required to make a commitment in the transfer agreement to ensure that the property has no rights defects. 4. The acquirer should pay attention to setting safeguard clauses for himself in the letter of intent for acquisition. In view of the relatively large amount of manpower, material resources and financial resources invested by the acquirer in the acquisition activities, the acquirer should set safeguard clauses in the acquisition letter of intent, such as exclusion clauses, provision of materials and information clauses, confidentiality clauses, locking clauses and cost sharing clauses, etc., in order to obtain legally binding protection for the acquirer. These clauses mainly prevent the transferor from negotiating with a third party to transfer or sell the equity or assets of the target company without the consent of the acquirer, and exclude the transfer. (3) The matters needing attention in due diligence are analyzed from different angles. The establishment of the company, previous capital increase and equity transfer are all related to the effectiveness and certainty of equity. Therefore, when purchasing equity, we must review the historical evolution of the target company to ensure the legitimacy of the acquisition target. When deciding to buy a company, we should pay attention to the composition of the company's assets, equity allocation, asset guarantee, non-performing assets and so on. First, among all assets, it is necessary to distinguish the specific proportion of current assets and fixed assets. In the capital contribution, how to make clear the proportion of monetary capital contribution to the total capital contribution, and whether the non-monetary assets have gone through the ownership transfer procedures also need to be made clear. Second, it is necessary to clarify the equity allocation of the target company. First of all, we must grasp the shareholding ratio of shareholders and whether there are preferred shares; Secondly, it is necessary to examine whether there are related shareholders. Third, the assets with security restrictions will have an impact on the solvency of the company, so we should examine the secured assets and unsecured assets separately. Fourth, we should focus on the company's non-performing assets, especially the depreciation of fixed assets, amortization of intangible assets and assets that are about to be scrapped and cannot be recovered. At the same time, the company's liabilities and owners' equity are also issues that should be paid attention to when buying a company. In corporate liabilities, we should distinguish between short-term debts and long-term debts, and distinguish between offset debts and non-offset debts. The structure and proportion of assets and liabilities determine the owner's equity of a company.
Legal subjectivity:
When buying a company, we should pay attention to the debts of the other company. 1. Check whether the company has debts. When acquiring a company, the undertaker should first consider the company's accounts, entrust a qualified bookkeeping company, carefully check the company's accounts, and see if there is a potential debt crisis in the transferred company. 2. Check the company's previous operation, whether the transferred company was legally operated before, whether there were any illegal and criminal acts in the operation process, and whether there were any bad records in the archives of the Industrial and Commercial Bureau.