Businesses have operations which make and unfortunately sometimes loss money. Well planned operations that can match the tax and cash flow consideration will help a business operation run smoothly. In addition to good bookkeepers and accountants, the year in and year out tax planning and compliance needs to a business often needs the help of a qualified tax lawyer.
Businesses across Texas undergo major transactions such as dissolution, termination, liquidation, distribution, mergers and acquisitions every single day. What they may not know is that having a reputable and knowledgeable attorney by their side from start to finish of each of these processes can give them a financial advantage when it comes to business tax. The secret to success is partnering with legal representation so your business taxes work in your favor.
Mergers and Acquisitions
As companies merge with other entities or acquire additional properties, it is critical to work with an attorney who understands how those changes can affect business taxes. While both processes account for the expansion of a business, every merger and acquisition is unique.
Some actions an attorney can assist clients with when it comes to mergers and acquisitions include:
- Negotiating deals to be as beneficial for the client as possible
- Ensuring transactions meet legal stipulations
- Ensure regulatory compliance
- Identify overlapping function between the two entities
- Identify synergies
- Identifying the most advantageous way to finance (cash, stocks, auctions, etc.)
- Consider the tax consequences.
Our attorneys are here to help ensure that a merger or acquisition transaction is well planned, executed from start to finish, and is rewarding for the client.
Terminations
Terminating a company can be a complex process depending on the circumstances surrounding it. Termination can happen for a number of reasons, including:
- Ending a company completely by choice
- Ending a company as required by the legal system
- Stopping business under a particular entity
Having an experienced attorney by your side as you initiate the termination process can be advantageous in terms of understanding a company’s liabilities and obligations, as well as distribution and payment options. Our attorneys have an intimate understanding of business taxes and know how to ensure the correct steps to take and the proper order to take them in.
Some of the ways we can assist a company with the termination process is through:
- Starting the winding up process
- Drafting a Certificate of Termination
- Filing a certificate from the Texas Comptroller
- Collecting property for distribution to shareholders or creditors
- Distribution of any remaining assets
Reorganization
Typically, when a company is going through reorganization, it is for one of two primary reasons:
- Growing their revenue stream
- Ensuring efficiency (can include reestablishing focus and leadership)
- Reducing cost
- Finding new markets
- Diversifying
- Restructuring debt
Whether a company’s reorganization strategy is the result of acquisition, consolidation, merger, identity change, transfer or other reason, having an attorney who understands how to make business taxes work for the client in each of these situations is crucial to the success of the overall process.
Our attorneys serve clients by providing legal documentation or counsel regarding reorganization actions such as:
- Adding or deleting of partners
- Adjusting a business entity
- Distributing assets
- Financing
- Drawing up contracts
Liquidations
A company needing to undergo liquidation has the end goal of selling off corporate assets to pay off debts and compensate shareholders. While the concept sounds simple, the business tax implications of it are not.
Ultimately the sale of a company’s assets can trigger steep income tax bills on both a corporate and shareholder level. By enlisting the help of an attorney who understands the business tax implications of liquidation, a client can have more confidence that the process is working in their favor from beginning to end.
Some liquidation specific tasks our attorneys can aid a client with include:
- Navigating the liquidation process
- Identifying tax credit carryovers
- Pinpointing and abiding by state laws
- Determining the timing and method of liquidation
- Establishing methods to address post liquidation claims and remaining assets
Dissolutions
In Texas, dissolution generally refers to the dissolving of a limited liability company (LLC). There are two primary kinds of dissolution:
- Involuntary (legally mandated)
- Voluntary (member decision)
Dissolution procedures that our attorneys can support clients with can include:
- Winding up process
- Filing a Certificate of Account Status for Dissolution from the Texas Comptroller
- Filing a Certificate of Termination of a Domestic Entity (for LLCs formed in Texas)
- Filing Certificate of Withdrawal of Registration (for LLCs formed outside of Texas)
- Filing Termination of Registration Form (for LLCs formed outside of Texas)
By working with one of our attorneys, clients can ensure that dissolutions are done by the book according to Texas law and are handled in a successful and succinct manner.
Distributions
Anytime a business undergoes a liquidation, termination, or dissolution, distributions become a part of that process. It is critical for clients to understand that the distribution of assets in each of these cases can be subject to business tax laws, and if the process is not handled properly, it can have a negative impact.
To avoid needlessly losing revenue due to inefficient distributions practices, work with one of our experienced attorneys to ensure that every step taken is as beneficial as possible to you.
If you are a business that is undergoing a complex transaction such as liquidation, dissolution, termination, reorganization, merger, or acquisition, reach out today to the attorneys at Harold “Hap” May, P.C. to learn more about how we can work these situations to your advantage when it comes to business tax.