Mergers and acquisitions (M&A) is the catch-all term used to refer to the different forms for transferring or consolidating ownership of businesses and assets. Although the terms merger and acquisition are used interchangeably, they have different legal meanings. When one company (the acquirer) purchases the stock, equity interests, or assets of another company, the transaction is called an acquisition. Sometimes an acquired company continues to operate independent of the acquirer, and sometimes the acquired company ceases to operate independently and is absorbed by the acquirer. Mergers, on the other hand, are generally the combination of two companies, and result in the formation of a new company.

In California, mergers and acquisitions (M&A) are governed by both state statutes and federal law. Under California law, particularly the California Corporations Code, the process for M&A is outlined with specific provisions for the types of entities involved, such as corporations, limited liability companies, and partnerships. An acquisition occurs when one company, the acquirer, purchases the stock, equity interests, or assets of another company. Depending on the structure of the acquisition, the acquired company may continue to operate independently or may be completely absorbed. In contrast, a merger typically involves the combination of two companies to form a new entity, with shareholders of the merging companies often receiving shares in the new entity. Both processes require adherence to legal formalities, including approval by the board of directors and shareholders, filings with the Secretary of State, and compliance with antitrust laws and other regulations. It is important for companies to consult with an attorney to navigate the complex legal landscape of M&A to ensure compliance with all applicable laws and regulations.