M&A Legal
M&A legal work including legal due diligence, SPA review, representations, indemnities, closing, business transfers, and sell-side preparation.
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A curated selection of articles to read first from LegalAgent AI Legal Lab.
LBO Loan Term Sheets: Covenants and Events of Default That Shape Post-Acquisition Management
This article covers the terms a borrower negotiates in an LBO loan term sheet, focusing on mandatory prepayment, covenants and events of default. It also addresses exclusivity in the arrangement, fees, representations and warranties about the target company, and how to respond in business succession deals.
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LBO Loan Security and Guarantees: The Timing of Providing the Target Company's Assets and Directors' Liability
For transactions in which the target company provides security and guarantees for the buyer's borrowing under an LBO loan, this article covers the directors' duty of care, when the security and guarantees can be provided, the approval of conflict-of-interest transactions and board resolutions, and the treatment of assets that are difficult to give as security.
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How to Create Employee Invention Rules: Ownership of Rights and Determining the "Reasonable Benefit"
Advance provisions for vesting employee inventions in the company, and the "reasonable benefit" given to inventors. Based on Article 35 of the Patent Act and the Japan Patent Office guidelines, this article explains consultation, disclosure and hearing of opinions, and the handling of existing inventions and departed employees.
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Divorce of a Business Owner and Division of Company Shares: Determining Separate Property and Dividing Assets Without Handing Over Shares
When are a business owner's company shares subject to division of property on divorce? This article explains the determination of separate property, settlement by payment, approval procedures for shares with transfer restrictions, capital gains taxation on division of property, and marital property agreements.
Read articleM&A Legal articles
M&A legal work including legal due diligence, SPA review, representations, indemnities, closing, business transfers, and sell-side preparation.
LBO Loan Term Sheets: Covenants and Events of Default That Shape Post-Acquisition Management
This article covers the terms a borrower negotiates in an LBO loan term sheet, focusing on mandatory prepayment, covenants and events of default. It also addresses exclusivity in the arrangement, fees, representations and warranties about the target company, and how to respond in business succession deals.
Read articleLBO Loan Security and Guarantees: The Timing of Providing the Target Company's Assets and Directors' Liability
For transactions in which the target company provides security and guarantees for the buyer's borrowing under an LBO loan, this article covers the directors' duty of care, when the security and guarantees can be provided, the approval of conflict-of-interest transactions and board resolutions, and the treatment of assets that are difficult to give as security.
Read articleHow to Create Employee Invention Rules: Ownership of Rights and Determining the "Reasonable Benefit"
Advance provisions for vesting employee inventions in the company, and the "reasonable benefit" given to inventors. Based on Article 35 of the Patent Act and the Japan Patent Office guidelines, this article explains consultation, disclosure and hearing of opinions, and the handling of existing inventions and departed employees.
Read articleDivorce of a Business Owner and Division of Company Shares: Determining Separate Property and Dividing Assets Without Handing Over Shares
When are a business owner's company shares subject to division of property on divorce? This article explains the determination of separate property, settlement by payment, approval procedures for shares with transfer restrictions, capital gains taxation on division of property, and marital property agreements.
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Valuing Unlisted Shares in Divorce Property Division: Choosing Between the Net Asset Method and DCF, and the Valuation Date
In an owner-manager's divorce, the valuation of company shares determines the amount of property division. This article explains the valuation date, how to choose between the net asset method, the DCF method and the dividend discount method, the treatment of director loans, the amended Civil Code and information disclosure orders.
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What Is an SPA (Share Purchase Agreement)? The Structure of the Definitive M&A Agreement and an Overview of Its Key Provisions
An SPA (share purchase agreement) is the definitive agreement in an M&A transaction. This column explains how conditions precedent, representations and warranties, covenants, indemnification and termination work together, how they connect with transfer approval and updating the shareholder register under the Companies Act and with Antimonopoly Act filings, and the order in which a buyer should read the draft.
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How to Build an Anti-Social Forces Screening System: Practical Steps for Companies That Have the Clause but No Process
Even with an anti-social forces exclusion clause, a company is not regarded as having a system without a checking procedure and records. This article covers who to check, when and how, decisions when suspicion arises, and how to build a register that can be shown in an IPO review.
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Labor Data Management and Substantiating Metrics to Support Human Capital Disclosure at Startups
Explaining human capital requires a calculation method and day-to-day labor records to back it up. In light of the expanded publication obligations in 2026, this article examines the difference between statutory disclosure and voluntary communication, consistency with recruitment branding and the management of personal information.
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Real Estate Tech and the Real Estate Brokerage Act: The Line Between Listing and Brokerage, IT-Based Explanations of Important Matters and AI Valuation Displays
Whether a real estate tech business needs a license or registration is determined by its actual business, not by the names used on screen. This article reviews the line between listing and brokerage, the procedures for IT-based explanations of important matters, AI valuation displays and the scope of registration for rental management.
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Investment Crowdfunding and the Financial Instruments and Exchange Act: How It Differs From Purchase-Based Crowdfunding and How to Conduct an Offering
Purchase-based and investment-based crowdfunding differ in the rights supporters acquire and the regulations that apply. This column explains the preparations that remain with the issuer even when using a registered operator, and how issuing shares affects future fundraising.
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Reviewing Joint Venture (JV) Agreements: Designing Ownership Ratios and Exit Provisions
If opinions split in a 50:50 joint venture, by what procedure do decisions move forward? This article reviews the procedures under the Companies Act and the arrangements in a joint venture agreement, including how to handle a party that does not make an additional capital contribution and the terms for buying and selling shares.
Read articleWhat Are Key Person Clauses and Retention? Closing Conditions and Measures to Keep People
A key person clause sets a condition for carrying out the transaction; keeping the person at the company requires separate measures. We consider post-acquisition treatment and handover arrangements in light of the different legal status of officers and employees.
Read articleWhat Is an Earn-Out Clause? A Mechanism for Bridging Valuation Gaps in M&A and Its Dispute Risks
An earn-out, which adds consideration according to post-acquisition performance, brings disputes over calculation methods and management policy. We examine everything from how it differs from fixed installment payments to defining metrics, the determination procedure, and treatment upon resale.
Read articleWhat Is W&I Insurance (Representations and Warranties Insurance)? Risks Covered in M&A and the Seller's Liability
Using representations and warranties insurance does not automatically eliminate the seller's liability. Check the difference between buy-side and sell-side policies and the treatment of known matters and retentions, and consider the policy terms together with the indemnity provisions of the SPA.
Read articleHow to Choose an M&A Structure: A Legal Perspective for Narrowing Down Share Acquisitions, Business Acquisitions and Reorganizations
Rather than picking an M&A structure by name first, you narrow it down after settling issues such as the percentage of control to acquire, what is transferred, the consideration and the treatment of minority shareholders. This article explains how to organize the legal, tax and accounting issues together and make the candidates concrete.
Read articleShare Transfer vs. Business Transfer: Comparing Procedures, Contracts, Employees and Permits
Acquiring shares and transferring business assets and contracts differ in the consent required from business partners and employees and in permit procedures. This column explains how off-balance-sheet liabilities affect the buyer, shareholders' meeting approval and its exceptions, and the tax points to check.
Read articleComparing M&A Legal Support: Legal DD, SPA Negotiation and What LegalAgent Provides
The scope of M&A legal quotes differs from firm to firm, such as legal DD only or SPA negotiation only. Which stages you entrust to outside counsel changes both the fees required and the work that remains in-house.
Read articleWhat Is Legal Due Diligence (Legal DD)? Key Points on Its Purpose, Investigation Items, Process, Timeline and Reflection in the Contract
This article explains the core issues in legal due diligence conducted by the buyer in M&A, such as the ownership of shares, business continuity, and labor-related and other off-balance-sheet liabilities. It comprehensively covers the investigation process, the factors that determine the timeline, the differences between transaction schemes, and how to reflect findings in the SPA.
Read articleHow Much Do M&A Attorney Fees Cost? Fee Structures and Estimates for Legal DD, SPAs, and Closing
M&A estimates should be compared on both amount and scope of engagement. We review the work from legal DD through contract negotiation and closing, the differences between fixed fees and hourly billing, and explain the conditions for additional fees and the materials to share in advance.
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Conflict-of-Interest Transactions Between Group Companies: Approval Procedures and Minutes in Practice
In transactions between group companies, confirm whether each company is engaging in a conflict-of-interest transaction. This column explains how the approving body differs depending on whether there is a board of directors, the exclusion of directors with a special interest from the vote, and the preparation of records and post-transaction reporting.
Read articleHow to Prepare Minutes of Shareholders' Meetings and Board Meetings: Statutory Items and What Is Examined in Registration and Due Diligence
Shareholders' meetings and board meetings differ in the items to be stated in the minutes, the signature and seal requirements, and the conditions for retention and inspection. This article explains the additional requirements when minutes are attached to a registration filing and the steps to take when defects are found in past records.
Read articleWhat Is a Distribution Agreement? Practical Issues of Distribution on M&A and Deemed Liquidation Clauses
Even when a company is sold, the liquidation preference clause for preferred shares alone does not necessarily determine how the sale proceeds are allocated. We look at who a distribution agreement covers and how it calculates distributions, and work through concrete examples of what each party receives at different sale prices.
Read articleIndemnification, Price Adjustment and Closing Conditions in an SPA: Designing Clauses on Conditions Precedent and Caps
The indemnification clause, the price adjustment clause and the closing conditions in a share purchase agreement (SPA) are interlinked. Because the clause design changes depending on whether a problem found in due diligence is handled through a price reduction, a condition precedent or a special indemnity, an integrated review including caps and procedures is likely to be necessary.
Read articleM&A Letters of Intent (LOI): Points to Check on Exclusivity, DD and Legally Binding Effect
Check the binding effect of an M&A letter of intent clause by clause. The exclusivity period, the assumptions behind the price, the information disclosed in DD, and the treatment of costs and confidential information if negotiations end all affect the negotiations that follow.
Read articleBuy-Side Legal DD Checklist for Startup Acquisitions: Definition, Importance, and Risks by Position
In a startup acquisition, investigate the share history, the ownership and licensing of intellectual property, and key contracts as a priority. Link the problems found concretely to the price, pre-closing remediation, indemnities, and post-acquisition measures.
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Change of Control Clauses: Points to Check for M&A, Capital Policy and Continuity of Business Relationships
Even fundraising through issuing new shares can fall within a CoC clause depending on the contract's definition. This article distinguishes notice from prior consent, and checks the carve-outs needed for ordinary capital policy, the effect of failing to obtain consent, and continuity of contracts after an acquisition.
Read articleCheckpoints for Reviewing Indemnity Clauses: Their Relationship with Damages, Third-Party Claims and Limitations of Liability
An indemnity clause sets out who handles the defense against third-party claims and who pays settlement amounts and attorneys' fees. Check whether the liability cap extends to indemnification and whether a short notice deadline could be an obstacle, together with insurance and the likelihood of recovery.
Read articleCheckpoints for Reviewing Franchise Agreements: Practical Issues for Franchisors and Franchisees
In franchising, the pre-contract earnings explanations are compared with the content of the agreement. In addition to royalties, designated purchasing, franchisor support and conditions on nearby store openings, the costs of withdrawal and non-compete restrictions also bear on the investment decision.
Read articleCheckpoints for Reviewing Distribution and Sales Agency Agreements: Practical Issues for Manufacturers and Distributors
The title "agency" alone does not tell you who handles contracts with customers or collection of payment. This article distinguishes agency, intermediary, resale and referral arrangements, and checks the conditions for remuneration, the scope of exclusivity, and how prices and advertising are controlled.
Read articleOEM Agreement Review Checklist: Practical Issues for the Ordering Party and the Manufacturer
When a product made under OEM turns out to be defective, the question is who bears the cause investigation and recall costs. Separate the ordering specifications from existing technology, and check inspection, approval of changes to manufacturing methods, and the treatment of molds and inventory on termination.
Read articleNDA Review Basics: Definitions, a Checklist and Risks by Position
In an NDA, it is important to decide both the scope of the information to be protected and the conditions under which it can be handled in practice. The disclosing party and the receiving party care about different clauses regarding oral disclosure, sharing with investors and retention of backups.
Read articleWhat Are Governing Law, Agreed Jurisdiction and Arbitration Clauses? How to Design the Rules for Disputes in a Contract
The combination of governing law and the forum for disputes changes the burden of attorneys' fees, translation and enforcement of judgments. From choosing between litigation and arbitration to keeping internal records when accepting the counterparty's clause, there are matters worth considering before signing a contract.
Read articleWhat Is an Anti-Assignment Clause? What to Check for Transfers of Contractual Position, Assignments of Claims and Business Transfers
An anti-assignment clause does not immediately make an assignment of claims void. It is important to distinguish transfers of contractual position, assignments of accounts receivable and succession through company splits, and to check the scope and procedure for which consent is required.
Read articleWhat Is a Confidentiality Clause? Review Practice for Contracts Other Than NDAs
Confidentiality clauses need to be checked in contracts other than NDAs as well. How day-to-day operations and end-of-contract management work depends on with whom information may be shared, whether independently developed information can be excluded, and how AI inputs and logs are handled.
Read articleWhat Is Contract Management? Managing Renewals, Terminations and Performance of Obligations That Are Easily Overlooked after Signing
Missing a termination notice deadline can lead to an unneeded contract being renewed. Decide who watches the deadlines, and link memoranda and amendment agreements to the main contract so that the latest terms can be confirmed.
Read articleIf You Have M&A in View, Review Founder Shares and Shareholders' Agreements Early
If a departed founder's shares or agreements with past investors remain in place, coordination at the time of a sale can take time. Compare the shareholder register with the agreements and confirm whose consent will be needed.
Read articleRisks Founders Tend to Overlook in SPA Representations and Warranties
Depending on the scope of the representations and warranties, the seller may bear indemnification liability even for past facts it did not know. Read the knowledge and materiality qualifiers, and negotiate them together with the cap and period of indemnification.
Read articleLegal DD to Prepare Before a Startup Becomes a Seller
Once you start considering a sale, check your share records, major contracts, intellectual property and the legal basis for using data. This prepares you to answer the buyer's questions and helps you grasp the information needed to negotiate terms.
Read articleWhat Investors Look at in Legal Due Diligence Around Series A
When you gather materials to prepare for legal due diligence, you may notice points that are hard to explain or documents that are missing. This article looks at the matters investors examine in financings around Series A.
Read articleSeller-Side Preparation for Legal Due Diligence: Building a Contract Register and Keeping Records in Ordinary Times
An acquisition review checks not only whether documents exist but also whether the company understands its risks and can explain them. By building a contract register, recording the reasons for accepting exceptional terms, confirming shareholder relations, and preparing a simple data room in ordinary times, you can be ready for issues raised by the buyer.
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