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Business formation includes conducting mergers and acquisitions

Successful businesses in Minnesota and all other states may face the prospect of mergers and acquisitions as they grow into maturity. The law of business formation includes conducting mergers and acquisitions for businesses, both here in Minnesota and elsewhere. Since the technological revolution, an "online data room" or "virtual data room" is likely to be a part of the process of facilitating the merger or acquisition.

The law places a tremendous due diligence burden on the buying company. It must accumulate all of the documents and data relevant to the company being acquired or merged. The data room helps move the transaction to fruition by making available all or the vast bulk of information necessary to comply with law and due diligence standards.

The selling company is able to provide all of the company documents, contracts, intellectual property documents and other vital financial and employee records that must be turned over to the buying company. The process moves to fruition a lot quicker by having a virtual location for information rather than having to accumulate massive volumes of physical records and housing them in a physical data room for inspection and copying. Necessary access restrictions are much more easily built into a virtual format than with the traditional physical one.

Access is accomplished online pursuant to stringent security protections. Some companies sell online data room programs and services to big companies to facilitate mergers and acquisitions. There are many advantages to the virtual data room. Multiple visits may be made with ease, and searching is systematized as opposed to the awkwardness of a manual search.

Documents and files are more easily updated and expanded. In essence, every pertinent bit of information about the subject company is made available in a digital format that facilitates easy access, security, flexibility, comprehensiveness and almost all of the other functions necessary to business formation purposes. Minnesota corporate and business law firms use this emerging technology to expedite the organized and fair transfer of information between participating companies.

Source: allbusiness.com, "The Importance of Online Data Rooms in Mergers and Acquisitions", Richard Harroch, Aug. 11, 2016

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