Revision Legal is a law firm focusing on e-commerce and internet law with deep experience in providing legal services with respect to mergers and acquisitions of e-commerce businesses. E-commerce is, of course, businesses that make money online. But that “online” aspect presents unique legal and practical challenges for e-commerce acquisitions. Any business acquisition requires a well-crafted purchase agreement and unique due diligence and attention to the sale consummation contingencies. If you need legal assistance with an e-commerce acquisition, call us here at Revision Legal. We have been legal counsel for one of the largest brokers of digital assets, to e-commerce aggregators, roll up funds, and holdcos. We have provided legal advice regarding the closing the sale for 100’s of online businesses and have handled all aspects of e-commerce business financing, including venture capital, debt, equity financing, and credit facilities.
The first question, of course, is whether the acquisition is an asset purchase or a purchase of the full business including its corporate form. There are advantages and disadvantages to each type of acquisition.
Further, a successful e-commerce acquisition requires careful attention to details, many of which are unique to e-commerce businesses. For example, if the e-commerce business uses a sales platform like Amazon, due diligence will be required with respect to the target business’ metrics and status with the online platform. This due diligence will be needed for each online platform utilized. Other due diligence matters include:
- Compliance with state of the art cybersecurity — including review of data storage and any loss of or unauthorized access to consumer data and/or business information (or attempted unauthorized access or theft)
- Status with respect to data collection, storage, use, sharing/selling, etc., including review of agreements with respect to same
- Compliance with various State and federal laws concerning consumer privacy, sale/sharing of personal information/data, etc.
- Status of social media influencer agreements (if any)
- Status of the e-commerce target business with respect to terminated merchant file/Match list
- Compliance with regulations promulgated by the Federal Trade Commission concerning advertising and deceptive business practices — compliance with State laws should also be addressed
- Proper registration and protection of domain names
- And more
Due diligence is also needed with more traditional matters that attend any purchase/sale of a business. These include:
- Status of trademark, trade secret, copyright and other IP — are registrations up-to-state and current?
- Actual or threatened litigation and/or regulatory investigations including potential IP infringement
- Compliance with State and federal labor laws for employees — for example, are notices and policies current and compliant?
- Review of all contractual agreements including employee, independent contractor, vendor, distributor, and supplier agreements including non-compete, non-disclosure and confidentiality agreements/provisions
- Review of licensing agreements
- Status of corporate books
- Status of assets (real or personal) to be transferred — whether collateralized or free from claims, etc.
- Review of tax-related matters including status of payroll taxes
- And more
Contact The E-Commerce Acquisition Attorneys At Revision Legal