1. What is M&A - Mergers and Acquisitions

The term “Mergers and Acquisitions” was created based on the commercial practices of the business community, particularly during the time of Vietnam's integration with other nations. It is not referenced in the Vietnamese legal system. This phrase has its roots in the English phrase “merge and acquisition”, or simply “M&A”.

On the basis of typical M&A cases in Vietnam, when compared to the Civil Code and Enterprises Law, it is clear that M&A is a process whereby a person or business (referred to as “investor” collectively) gains control over another business through a merger or may purchase all or a portion of its shares, contributed capital, or property. Depending on the type of M&A, the purchased company may or may not still exist in the market.

2. What are Mergers and Acquisitions cases?

Depending on the criteria, categorization basis, and kind of organization, M&A can take many various shapes. M&A may be categorized into the following 04 types:

• Buying private business: this form is rarely used these days, but it is still one of the forms of M&A that the owner of private business sells all of these contributed capital and property of their enterprise..
• Direct merger: is a common type of M&A in which the merged company merges into a combined enterprise while also terminating the merged enterprise's existence.
• Buy back majority or all of the contributed capital, shares: is the form in which the investor buys back the majority or all of the contributed capital, shares of the target enterprise and becomes the owner, member or shareholder who take the dominant percentage in the target enterprise. This form does not raise the charter capital of the target enterprise.
• Capital contribution: is the form that investors capital contribution directly to the target enterprise and increase the charter capital of the enterprise to become a member or shareholder of the target enterprise. In fact, this activity is very popular, requiring enterprise valuation and buying as market prices.

3. M&A Lawyer in Sai Gon recommend issues should be noted when M&A

M&A is a significant move that alters the “destiny” of both the target company and the investor. As a result, M&A necessitates expertise and sound judgment on the side of both parties. Every M&A transaction must go through a complete legal due diligence procedure of all aspects: assets, company benefits, legal documents, and investor-business compatibility… M&A Lawyer in Sai Gon suggests the following legal problems to consider:

• Legitimacy of the target enterprise: Before agreeing to marry, we must thoroughly investigate the spouse. This action necessitates the same. Examine all of the business permits, the company charter, the membership/shareholders... to determine the identity of the target corporation. What exactly do they do? How are they doing? ...
• Properties and Licenses (sub-licenses): The value of the property is frequently a factor in M&A decisions (land, construction, business licenses...). To achieve the aim, the parties must also inspect and appraise the worth of these properties in order to come close to the negotiated reasonable number for the parties.
• Finance of the target enterprise: Examine the most recent financial statement/at the time of contract signing to check about account receivables, payables, tax obligations, and so on. Pay attention to the payment, strike a balance tax so that the parties have a strategy for calculating the purchase and selling price, as well as the manner of payment and offset.
• Employees: When M&A activities occur, workers’ work may be impacted to varying degrees since investors frequently deploy their close team into the target organization to quickly stabilize corporate operations while purging the previous machinery. Hence, the target firm should pay attention to employment/regime settlement for workers who may quit work to guarantee compliance with the law; investors should also evaluate and analyze these works to assure the validity of the M&A process.
• Commercial contracts that have been and are being performed: These documents should be reviewed in order to monitor the performance of the contract, rights and obligations, debt status, violations and compensation…
• Time to transfer responsibility to the third party: That is one of the most crucial contents. Understanding that when M&A transactions take place, investors will inherit all rights and liabilities from the target company. As a result, the parties must pay close attention to the period of passing responsibility to the third party in order to design an appropriate transfer procedure for themselves.
• Transfer tax: In some circumstances, the government imposes a tax on mergers and acquisitions. As a result, the parties must define what taxes will be levied, how the tax rate will be calculated, how much is expected, and which party will bear the burden... depending on the kind of M&A transaction. Transfer tax (contributed capital, shares), value added tax, corporate income tax, and personal income tax are some examples.
• Payment: The investors should have a deposit or hold onto the final payment to guarantee responsibilities are fulfilled in the event that the target firm has not lived up to its commitments. Furthermore, the parties must be completely open and honest about their clearing duties during the M&A process.
• Handover: That is one of the topics that the parties frequently overlook throughout the M&A process. The parties must expressly agree on the substance of the handover (legal papers, properties, workers, financial records, bills, accounts...), the handover timing, and the precise handover method... A handover report that has been written is also an excellent alternative for the parties to evaluate and take action on.
• Contracts: The contract serves as documentation of the parties’ agreement on the M&A transaction. There are several sorts of contracts used in this procedure, including deposit contracts, assignment contract principles to document progress, and official assignment contracts. The parties rely on the correct contracts to meet their needs.
• Foreign investors: While conducting M&A with international investors, special care must be taken. Foreign investors must examine market access conditions such as capital contribution rate and business lines. Before making an investment choice, it is necessary in some situations to acquire clearance from a competent governmental agency.
• Procedures for notification at the business registration office: It is the last stage of the merger and acquisition process. All actions are performed when and only when the business registration system registers information. As a result, the creation of papers in compliance with the legislation on changes of members, charter capital, management, and so on should be evaluated and carried out in line with laws.
• Procedures for registration of property changes: To protect the interests of the investors and complete the transaction, all registered ownership properties must follow the processes for registering property modifications once the M&A process is finished.

4. Why do you need to retain an M&A Lawyer in Sai Gon?

The consequences of M&A transactions have an effect on the internal operation, making them one of the most difficult and crucial processes in the operating life of every firm. We may envision that an M&A transaction is quite complicated and has a lot of specialized work that has to be done for a long time based on the analysis in Section 3 - some notes when engaging in M&A activities. In order to attain a high negotiating price, many target businesses also wish to organize and handle their open concerns. When that time comes, an M&A Lawyer in Sai Gon will assist you to create wise preparations and guarantee that the M&A process is carried out in a way that benefits all parties and is legal.

The parties to an M&A transaction may not be able to agree on key points during the negotiation stage, such as payment terms, property transfers, risk transfers, receipt and use of existing personnel. An M&A lawyer in Sai Gon will be able to bring the parties together to reach an amicable resolution, ensuring that all pertinent details are accurately reflected in written agreements, and minimizing the worst-case scenario of a transaction that fails when a disagreement arises.

Moreover, when they can more readily link companies with demand, an M&A Lawyer in Sai Gon sometimes occasionally operate as “brokers”.

5. What does an M&A Lawyer in Sai Gon do?

Making ensuring that an M&A transaction proceeds smoothly and complies with the law requires a lot of effort and supervision. As a result, retaining an M&A Lawyer with highly experience is vitally essential. This is what an M&A Lawyer in Sai Gon with expertise in such transactions will accomplish, depending on the needs of the investors or the target company:

5.1. Approach stage:

• Researching and evaluating records, documents related to business activities (legal, financial, business, human resources ...).
• Working with the Executive Board and each department to understand the actual situation of the business and determine existing problems in the business; or determine demand M&A.
• Coordinating with valuation unit, audit unit and other specialized units.
• Preliminary counseling on the business buying and selling process.
• Consulting about the estimated value of intangible and tangible properties of the enterprise based on the current situation of the business (for reference only).

5.2. Counseling and promoting stage:

• Introducing the information of customers to potential partners.
• Collecting and providing information and documents.
• Connecting and promoting meetings.
• Counseling on M&A forms suitable to the demands, conditions of the parties, ensuring interests of the parties.
• Counseling on issues arising in the process of M&A promotion.
• Coordinating with valuation units, auditing units and other specialized units.
• Supporting the parties in the process of M&A negotiation on a case-by-case basis.
• Promoting the signing of the Deposit Agreement and the Principle Contract.

5.3. Counseling and implementing M&A procedures stage:

• Counseling on the process of implementing the Official Contract;
• Drafting and editing documents, contracts between the parties;
• Performing related administrative procedures (Change Certificate of Business Registration, Certificate of Investment Registration, Registration of Property Changes...);
• Supporting in handing over business or property.

6. Where to find a qualified M&A Lawyer in Sai Gon?

M&A Lawyer in Sai Gon has to be swift and have sound legal judgment in order to effectively represent clients throughout M&A transaction. Moreover, business understanding and analytical skills are required for a qualified M&A Lawyer in Sai Gon. The most helpful legal counsel is given to clients by the M&A Lawyers in Sai Gon at Phong & Partners:

Headquarter:

Add: 6th Floor, Thanh Loi Building, 249 Nguyen Van Linh, Danang - 0905.102425

Tel: 0236.3822678

Email: phongpartnerslaw@gmail.com

Web: https://phong-partners.com

Phong & Partners Lawyer in Son Tra district: 01 Dong Giang, Danang - 0905.205624

Phong & Partners Lawyer in Lien Chieu district: 21 Truong Van Da, Danang – 0961.283093

Phong & Partners Lawyer in Ngu Hanh Son district: 03 Chu Cam Phong, Danang - 0905.579269

Phong & Partners Lawyer in Cam Le district: 346 Cach Mang Thang Tam, Danang - 0901.955099

Please get in touch with us if you have any concerns or issues that just won't go away. Phong & Partners is happy to be a well-known and competent law practice that constantly pays attention to our clients and offers them the best possible legal services.