A merger occurs when two companies, which are often about the same size, agree to join together to form a new entity. Mergers are friendly, whereas acquisitions tend to be more hostile and occur when a target company realizes that they have no option but to ensure their survival by being bought by the other company.

The opportunity to purchase a competing or complimentary business provides an important route to expansion, but it is important to be clear about what exactly you are acquiring in a business - whether this is via shares or assets.

Adrenalin may be running high if you are on the verge of buying a business or selling the company you have built from scratch. You may have already sought professional advice regarding the company valuation but there are other critical issues on which advice will also be needed during those early heady days of negotiations.

Getting the finance in place to enable a management buyout to proceed can be challenging for the management team. There will be a number of people involved in the decision-making process, all of whom will have differing levels of experience, personal financial security and appetite for risk, and all of whom will be trying to pull a deal together while still doing their day job. In these circumstances, it is essential for the business owner and management team to work together to get the buyout arrangement over the line

The senior management team are the backbone of every business: they provide the vision, support and safeguarding needed for effective and efficient operation. But if you dream of becoming the boss, do you have what it takes to become a business owner? In the second of a three-part series of articles on management buyouts, we consider this question and highlights some of the issues a management team will need to consider if thinking about making a bid for the business they work for.

This is the first article in a series of three. The other articles are a quick guide for the team looking to buy in and one about funding options.

If you are considering setting up a business there are numerous options about the vehicle through which you can trade.