Purchase of New Business Unit / Takeover

Strategic Expansion through Acquisition of Business Divisions or Whole Enterprises

Acquiring a new business unit or taking over an existing company can be a powerful strategy for scaling operations, entering new markets, or achieving vertical integration. Law to Corporate offers complete legal, financial, and compliance support for business purchases — whether structured as asset deals, share acquisitions, or slump sales.

What It Means

·       Business Unit Purchase: Buying a specific division, product line, or vertical of another company, either as a going concern or standalone.

·       Takeover: Acquiring controlling interest or management control of an existing company, either friendly or hostile.

Governing Laws & Framework

·       Companies Act, 2013 (Sections 230–232, 395–396)

·       Income Tax Act, 1961 (Section 50B for slump sale)

·       SEBI (SAST) Regulations – for listed company takeovers

·       Competition Act, 2002 – CCI approval if thresholds are triggered

·       FEMA (FDI rules) if cross-border

·       Stamp Duty and Registration Acts

Process

1.     Strategic Planning & Feasibility Study

2.     Legal, Financial & Tax Due Diligence

3.     Valuation & Term Sheet Negotiation

4.     Drafting of Definitive Agreements (SPA / APA / BTA)

5.     Board and Shareholder Approvals

6.     Regulatory Filings (ROC, SEBI, CCI, etc.)

7.     Payment Execution & Transition Planning

8.     Post-Acquisition Integration

Key Benefits

·       Quick expansion without starting from scratch

·       Access to customer base, talent, technology, or licenses

·       Tax benefits under slump sale or asset purchase models

·       Opportunity to revive or reposition undervalued assets

Ideal For

·       Businesses aiming for market penetration or diversification

·       Buyers seeking distressed or undervalued acquisitions

·       Strategic investors looking to enhance operational synergies

·       Promoters seeking exit, succession, or monetization

Basic Requirements

·       Letter of Intent / Non-binding Offer

·       Due Diligence Reports (Legal, Financial, Compliance)

·       Valuation Report by Registered Valuer

·       Draft Agreements: Share/Asset Purchase, Business Transfer, Non-Compete

·       Consent from Board, Shareholders, Creditors (where applicable)

How LTC can Help

·       Target identification support & strategic viability checks

·       Conduct or coordinate complete due diligence

·       Draft and negotiate transaction documents (SPA, BTA, SHA)

·       Facilitate approvals from regulators, lenders, and internal governance bodies

·       Ensure post-acquisition compliance: ROC, GST, PAN updates, employee transitions

·       Advise on risk mitigation, tax structuring, and integration strategy