Different Corporate Structures in Law Firm M&A
I recently wrote a blog for the ALFMA website looking at the different corporate structures involved in legal M&A deals and thought I would share it here, on our website, with some examples of the deals that we have recently been involved in.
The blog is here.
There are a surprising number of traditional 1890 Partnership Act legal practices still around. This is not our preferred method of running a law firm these days. Any partners selling need to limit their personal liability.
If the sellers are selling an interest in an LLP or their shares, any corporate liabilities will remain with the LLP or the limited company, but most buyers will want warranties, and sometimes indemnities, from the sellers.
Warranties need to be limited in both time and value. Where an LLP or a limited company is selling its assets, the risk is far less to the sellers, although savvy buyers will often want personal warranties and/or indemnities from the members or directors of the LLP or limited company.
Partners will be personally liable for the liabilities of any partnership they sell, and should place appropriate notices in the London Gazette to limit their liability after the sale and seek indemnities from the buyer. With smaller businesses, banks (and sometimes others) often seek personal guarantees, and the sellers must ensure that these are dealt with by completion.
We have experience of buying and selling all structures. Please contact Mark Briegal on 07973 283678 or email@example.com if you want to discuss any issues raised in this article.