M&A Tax & Legal

A purchaser wants clarity on the target, protection against historic risk and room for future growth.

A seller wants an attractive price, an executable process and limited residual liability.

Management needs to understand its future position, remuneration and participation. Lenders require insight into risk, cash flows and security. Employees, customers and suppliers seek continuity.

These interests come together in one process but are frequently handled by separate advisers.

An identified tax exposure should not remain only in a due-diligence report. It may affect:

• purchase price;
• price mechanism;
• specific indemnities;
• tax warranties;
• transaction structure;
• financing;
• the choice between shares and assets;
• post-closing integration;
• the decision to proceed.

OneLane connects tax and legal from the beginning and coordinates with financial, corporate-finance, employment, IT and other workstreams.

Our services may include:

• sale readiness;
• tax and legal structure review;
• term sheets and letters of intent;
• tax due diligence;
• legal due diligence;
• vendor due diligence and assistance;
• transaction structuring;
• acquisition financing;
• management participation;
• purchase-price mechanisms;
• transaction agreements;
• warranties, indemnities and disclosures;
• signing and closing;
• restructurings;
• post-deal integration;
• transaction-related disputes.

OneLane can perform a defined workstream or coordinate the complete Dutch tax and legal process.

A strategically attractive target may contain historic obligations that are not immediately apparent from its financial statements.

A purchaser needs to know:

• whether shares and assets are validly owned;
• whether key contracts continue after completion;
• whether customers can terminate on a change of control;
• whether licences and intellectual property are secured;
• whether disputes or claims exist;
• whether tax returns were correctly filed;
• whether latent tax exposures exist;
• whether workers and contractors were classified correctly;
• whether intragroup transactions were arm’s length;
• whether the structure can be integrated;
• which protections are required in the agreement;
• which actions are required immediately after closing.

A finding may lead to further information, price adjustment, indemnity, escrow, closing condition, remediation or a decision not to proceed.

A seller will face extensive questions on tax, contracts, employees, ownership and compliance.

Issues identified only during buyer due diligence can:

• reduce confidence;
• delay the process;
• weaken the seller’s position;
• increase warranties;
• affect price;
• extend exclusivity;
• ultimately prevent closing.

OneLane prepares the business before the data room opens by reviewing:

• tax positions;
• historic filings;
• corporate housekeeping;
• material contracts;
• ownership rights;
• intragroup arrangements;
• employee and contractor files;
• fiscal unities (fiscale eenheid);
• potential dealbreakers;
• possible pre-sale restructuring;
• net tax proceeds;
• vendor due diligence requirements.

Under a share deal, the purchaser acquires the shares in the target. The legal entity continues with its assets, contracts, employees, liabilities and history.

Under an asset deal, selected assets, liabilities and activities are transferred.

The choice affects:

• historic liabilities;
• contract transfers;
• permits;
• employees;
• intellectual property;
• VAT;
• real estate transfer tax (overdrachtsbelasting);
• tax bases and depreciation;
• losses;
• financing;
• third-party consents;
• execution.

We compare both routes before the transaction principles are fixed.

The tax structure affects funding requirements, net proceeds, tax costs and post-closing operations.

We consider:

• the purchasing and selling entities;
• share or asset transfer;
• holding companies;
• treatment of proceeds;
• corporate and personal income tax;
• dividend and withholding taxes;
• VAT and real estate transfer tax;
• fiscal unities;
• losses;
• deferred tax;
• transaction costs;
• interest deduction;
• acquisition financing;
• management participation;
• seller rollover;
• cross-border flows;
• future exit.

The structure should be tax-efficient, legally executable, financeable, operationally practical and defensible.

Tax due diligence may cover:

• corporate income tax;
• VAT;
• payroll tax;
• transfer pricing;
• withholding taxes;
• international structures;
• tax losses;
• deferred tax positions;
• tax audits;
• real estate transfer tax;
• other relevant taxes.

We rank findings by financial impact, probability and transaction relevance and identify the proposed response.

Buy-side tax due diligence identifies exposures that may transfer with the target and considers integration and contractual protection.

Vendor tax due diligence or assistance helps the seller:

• identify issues early;
• organise explanations and evidence;
• prepare the data room;
• reduce inconsistent buyer questions;
• improve process efficiency;
• prepare tax disclosures;
• support management during buyer reviews.

The appropriate form may be a full report, focused review or quick scan.

Legal due diligence may review:

• corporate structure and title;
• articles and shareholder arrangements;
• commercial contracts;
• change-of-control clauses;
• financing and security;
• employees and management;
• intellectual property and IT;
• permits and compliance;
• privacy;
• litigation;
• real estate;
• insurance.

Each material issue is linked to a possible transaction solution.

Due-diligence findings may be addressed through:

• purchase-price adjustments;
• warranties;
• specific indemnities;
• disclosure;
• escrow;
• deferred consideration;
• closing conditions;
• remediation;
• post-closing obligations;
• W&I insurance.

Due diligence should therefore operate alongside the drafting and negotiation process.

A term sheet or letter of intent commonly addresses:

• transaction perimeter;
• indicative price;
• price mechanism;
• funding;
• earn-out;
• rollover;
• due diligence;
• exclusivity;
• timetable;
• conditions;
• management;
• confidentiality;
• costs;
• governing law.

Important tax and legal choices should be recognised before signature, even if the document remains partly non-binding.

Enterprise value is not automatically the amount received by the seller.

The equity purchase price can be affected by:

• debt;
• cash;
• working capital;
• transaction costs;
• shareholder loans;
• leakage;
• earn-outs;
• escrow;
• rollover.

A locked-box mechanism uses a historic balance-sheet date and protects against unauthorised value leakage.

Completion accounts adjust the price following closing by reference to the actual closing position.

A share purchase agreement typically addresses:

• shares and parties;
• price;
• price mechanism;
• payment;
• conditions;
• warranties;
• tax warranties;
• indemnities;
• disclosure;
• interim conduct;
• liability limits;
• claim procedures;
• restrictive covenants;
• management;
• dispute resolution.

An asset purchase agreement must identify the transferred assets, liabilities, contracts and employees.

OneLane drafts, reviews and negotiates the documentation.

Tax warranties contain statements concerning the target’s tax position.

Specific indemnities allocate identified risks.

A tax covenant generally allocates economic responsibility for taxes attributable to pre- and post-completion periods and sets procedures for filings, audits, claims and information.

These provisions must align with due diligence, the structure, price mechanism, disclosures and any insurance.

The seller can provide information that constitutes exceptions to the warranties given.

A good disclosure must:

• be sufficiently specific;
• refer to available documentation;
• make clear what the risk is;
• tie in with the warranty to which it relates;
• be consistent with the data room;
• not introduce broader risks unnecessarily.

For the seller, a proper disclosure limits the risk of claims. For the buyer, it makes visible which exceptions apply to the warranties agreed.

OneLane reviews both the legal and the tax disclosures.

Not every risk found has to be fully resolved before closing.

Parties can agree, for example, that:

• the seller retains the risk;
• an amount remains in escrow;
• part of the purchase price is deferred;
• the target corrects the position before closing;
• a ruling or consent is obtained;
• insurance provides cover;
• the buyer takes on the risk against an adjusted price.

The solution depends on:

• financial size;
• likelihood;
• timescale;
• evidential position;
• recoverability from the seller;
• negotiating power;
• effect on the business;
• willingness of financiers and insurers.

We do not simply advise that a risk “has to be covered contractually”, but work out which form really offers protection.

Management may invest through:

• shares;
• depositary receipts (certificaten);
• different share classes;
• sweet equity;
• options;
• loans;
• phantom arrangements.

Key matters include:

• investment amount;
• valuation;
• economic and voting rights;
• tax treatment;
• good- and bad-leaver rules;
• dilution;
• exit;
• information;
• drag and tag.

A rollover allows management or sellers to reinvest part of their proceeds in the new group.

In a management buy-out the sitting management takes over the business in whole or in part. In a management buy-in, external management joins as buyer.

These processes call for careful consideration of:

• enterprise value;
• financeability;
• available own funds;
• role of the seller;
• bank or investor financing;
• vendor loan;
• control;
• management remuneration;
• tax structure;
• conflicts of interest;
• warranties and information;
• future exit.

Management is often in a dual position: it knows the business well, but also has to negotiate independently as buyer.

OneLane helps separate roles and interests clearly and organises a structure that is workable for management, seller and financier.

Funding may comprise:

• equity;
• bank debt;
• shareholder loans;
• vendor loans;
• subordinated or mezzanine debt;
• external investment;
• deferred consideration;
• earn-outs;
• seller rollover.

Tax and legal analysis covers the borrower, cash flows, interest deduction, arm’s length terms, security, ranking, covenants, withholding taxes and future refinancing.

An earn-out can bridge different expectations of future value.

It should clearly define:

• performance measure;
• accounting policies;
• measurement period;
• integration effects;
• investments and costs;
• information rights;
• seller’s role;
• dispute mechanism;
• tax treatment.

A seller can reinvest part of the proceeds in the buyer, a new holding company or the combined group.

That can fit when the seller:

• stays involved;
• has confidence in further growth;
• enters a next phase together with an investor;
• wants to create a second value moment;
• sells only part of the interest.

We assess:

• the value at which the reinvestment is made;
• economic and control rights;
• tax treatment of sale and reinvestment;
• financing;
• future dilution;
• information;
• governance;
• exit rights;
• drag and tag;
• good and bad leaver rules when the seller also stays on as manager.

Sale and reinvestment are legally two steps, but economically one deal. They must therefore be negotiated together.

Employment due diligence and transaction support may cover:

• transfer of undertaking (overgang van onderneming);
• employment contracts;
• collective agreements (CAO);
• pension;
• bonus and participation plans;
• sickness;
• contractors;
• management agreements;
• works councils (ondernemingsraad);
• retention;
• restructuring;
• statutory directors.

These matters should be considered before signing.

VAT may affect asset deals, transaction costs, real estate, holdings, carve-outs and transitional services.

Real estate transfer tax may be relevant where the target directly or indirectly owns property.

Existing corporate-income-tax or VAT fiscal unities can create separation issues and historic group liabilities.

Tax losses and other attributes are not automatically fully usable.

Their value depends on legal restrictions, future profits, changes of ownership, activities, fiscal unities and available evidence.

We separate legal availability from economic value.

Cross-border acquisitions may involve:

• holding structures;
• withholding taxes;
• treaties;
• permanent establishments;
• transfer pricing;
• foreign losses;
• financing;
• cash repatriation;
• exit taxes;
• foreign investment screening;
• local approvals;
• internationally mobile employees.

OneLane coordinates the Dutch workstream with local advisers.

A carve-out requires the separation of:

• assets;
• contracts;
• employees;
• systems;
• permits;
• intellectual property;
• group services;
• tax positions;
• financial information;
• legal entities.

Transitional services and operational readiness are as important as the legal transfer.

In certain transactions, warranty & indemnity insurance can be used to insure risks arising from warranties or indemnities in whole or in part.

The insurer assesses, among other things:

• quality of due diligence;
• scope of warranties;
• disclosure;
• known risks;
• transaction structure;
• parties involved;
• cover required.

Insurance does not replace due diligence. Excluded or known risks often call for a separate solution.

OneLane provides support with:

• aligning tax due diligence with the insurer;
• review of tax exclusions;
• answering underwriting questions;
• drafting tax warranties;
• assessment of known risks;
• alignment between policy and purchase agreement.

Between signing and closing, parties may need to complete approvals, funding, consultation, restructuring, tax actions and third-party consents.

After closing, actions may include:

• governance changes;
• registrations;
• tax-group changes;
• tax compliance;
• payroll and HR integration;
• transfer-pricing implementation;
• refinancing;
• contract updates;
• legal mergers;
• employee-benefit harmonisation;
• monitoring claim periods;
• earn-out and completion-account procedures.

OneLane maintains one closing and post-closing action plan.

The first months partly determine whether the intended value of the transaction is realised.

We help set priorities for:

Immediately after closing

• board and signing authority;
• bank accounts;
• tax registrations;
• communication;
• crucial contracts;
• payroll;
• insurance;
• data access.

Within the first months

• tax compliance;
• VAT and payroll taxes;
• transfer pricing;
• restructuring;
• management participation;
• integration of policies;
• corporate housekeeping;
• claim and warranty periods;
• transitional services;
• processes and internal controls.

For the first year

• legal simplification;
• tax optimisation;
• integration of entities;
• evaluation of financing;
• revision of terms of employment;
• realising synergies;
• updating forecasts and value drivers.

Disputes can concern:

• completion accounts;
• working capital;
• debt and cash;
• earn-outs;
• warranties;
• tax claims;
• indemnities;
• disclosure;
• leakage;
• management participation;
• transitional services.

We combine contract interpretation with tax and financial analysis and coordinate specialist litigation support where required.

1. We understand the commercial transaction
We identify what is being acquired or sold, which risks matter and how the business should look after closing.

2. We design the tax and legal workstreams
We define scope, priorities, information and timing.

3. We investigate and structure in parallel
Due diligence findings immediately inform structure, funding and documentation.

4. We turn findings into decisions
We provide a prioritised view of risk, possible solutions and decision points.

5. We negotiate and document
We support the term sheet, SPA, tax covenant, indemnities, disclosure and participation arrangements.

6. We manage signing and closing
We coordinate conditions, approvals, execution and registrations.

7. We organise post-closing implementation
We remain involved in integration, restructuring, compliance and potential claims.

A tax exposure can change the legal agreement. An employment issue can affect value. A financing structure can restrict interest deduction. A legally elegant carve-out may be operationally impossible.

M&A Tax & Legal works when specialists share one understanding of the deal.

OneLane maintains that overview, explains the choices clearly and converts findings into practical transaction terms.