Chapter 16. Additional Legal Aspects

Legal Rules Governing Mergers and Acquisitions

Applicable Corporate Laws

Corporate law in the United States—There is no single corporate law in the United States, since every state has its own domestic corporation law. The most relevant corporate law is in Delaware. For example, all mergers and acquisitions require the approval of the board of directors, but not of the general meeting, if less than 20% of the corporation's shares is offered as the consideration in the merger. This enables large companies to buy small companies without the need to go through the red tape of a shareholder approval process. Obviously, the shareholders of the target (the startup) are required to give their approval, according to ...

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