Jeremiah Baba Pagano
Attorney

Jeremiah Baba Pagano, Esq. LLM

Attorney

Jeremiah Baba Pagano, Esq., LL.M., CEPA serves as an Attorney at Jacko Law Group, PC (“JLG”) where he supports the critical needs of our clients every day. His knowledge and experience, not only, enhances our ability to provide counsel that aligns with our clients’ transactional needs, but also their overall corporate objectives and strategy for long-term success. Mr. Pagano’s practice was founded on his tax experience, and his ability and foresight to align clients to position their businesses for growth.

As a solutions-led attorney, Mr. Pagano counsels JLG clients on their regulatory, corporate, and tax matters, including analyzing, evaluating, and ensuring compliance processes in the review of all tax and financial documents, analyzing tax consequences for mergers and acquisitions, drafting contracts and agreements, and more. His experience has built the foundation for his passion to strategically advocate for clients and their businesses, to position them to thrive.

Mr. Pagano brings a wealth of experience in investment adviser, broker-dealer, and fund regulatory compliance matters, internal control development, transition services, and operational risk management. His knowledge within the financial services industry allows him to address the needs of his clients, allowing them to mitigate risk and grow to their full potential. Mr. Pagano advises both firms and individuals on their legal and regulatory risks. Counseling his clients on how to mitigate risk while aligning their strategic business practices is a staple in his practice area. Mr. Pagano additionally interfaces with the various state and federal regulatory agencies on behalf of his clients, fiercely advocating for their professional interests. He is also a frequent commentator on securities regulation and investment-related matters.

When developing a Corporate Counsel practice, Mr. Pagano assesses the needs of the business as a genuine trusted partner. Throughout the years, he has provided counsel at various phases of a business, including formation, growth, and final transition and/or sale. Clients leverage his insight when finding methods to enhance their organizations and drafting of corporate documents, including complex shareholder agreements. While serving our clients, the JLG team collaborates with Mr. Pagano when devising plans and strategy – as he has a holistic approach to assessment, including risk mitigation, corporate restructuring, and management transitions.

Mr. Pagano’s clients have also relied on his counsel when navigating the intricacies of Mergers and/or Acquisitions (“M&A”). His continued experience in corporate law allows for strategic planning when it comes to the M&A process. From reviewing sensitive material like NDAs, term sheets, and purchase agreements, Mr. Pagano advocates for JLG’s clients and their best interests. Leveraging his business acumen, Mr. Pagano also assesses the impacts when it comes to his practices, providing ample counsel for transition considerations, such as employment and vendor arrangements. Over time, his ability to steer clients and create their custom timeframe and business strategy is one of many benefits and values he brings to the JLG team.

To complement Mr. Pagano’s M&A experience he also is a Certified Exit Planning Advisor (CEPA), which has proven to be invaluable to JLG clients as they grow their businesses and plan for the future. Understanding the strategy and path necessary for clients’ goals and long-term objectives, from inception, is one of his many talents within his legal practice. With this designation, he continuously advocates for clients' interests in a multitude of phases of their business, including formation, merger, acquisition, transition, and succession. As an exit planning adviser, he strives to effectively engage business owners and help them build more valuable companies, stronger personal financial plans, and align their personal goals. From formation to succession, he has been able to construct specific strategies for achieving 3, 5, and 10 years - and beyond, navigating significant changes when consolidating businesses with confidence and success.

Throughout his career, Mr. Pagano has focused his practice on tax law, managing matters with the Internal Revenue Service, the United States Tax Court, and the California tax authorities. Mr. Pagano uses his tax acumen to strategically plan and advise clients on the tax effects of a variety of corporate transactions, including taxable and tax-free reorganizations, mergers, sales, and acquisitions. He counsels clients on a variety of subjects, including tax-free reorganizations, tax-efficient return of capital to owners, Qualified Small Business Stock, and various state pass-through entity taxes. Mr. Pagano also drafts tax portions of Operating and Shareholder Agreements for businesses in different industries.

Mr. Pagano is also an industry thought leader, as he has been featured in a handful of publications, including Barron’s Advisor and the National Society of Compliance Professional’s (NSCP) Newsletter. By leveraging his knowledge and experience in tax and other service areas, he has been able to leave an impression on numerous industries, including finance and corporate securities.

Prior to joining JLG, Mr. Pagano served as an Attorney Advisor for the U.S. Small Business Administration, where he coordinated numerous efforts and community works, such as the $16 Billion Shuttered Venue Operators Grant (SVOG) emergency relief program. Similarly, Mr. Pagano has served as in-house counsel to a 501(c)(3) public charity. Before that, Mr. Pagano gained valuable experience with a number of firms and organizations, such as the University of San Diego Federal Tax Clinic, Eaker Pérez Law, and Higgs, Fletcher, & Mack LLP. Prior to law school, Mr. Pagano followed his entrepreneurial spirit, founding and running his own business in the telecommunications industry. This specific background allows Mr. Pagano to connect with his clients on a deeper level than many other legal professionals. Ultimately, his professional background helped develop his legal acumen, nimble approach to service, and determination, further attesting to his talent and how strong of an asset he is to the JLG team.

In his free time, Mr. Pagano prefers to use his talents to give back to the community. Currently, he volunteers as a Helpline Volunteer with Savvy Ladies, a 501(c)(3) non-profit organization that brings financial planning education to women. The goal of Savvy Ladies is to ensure that women have a trusted and reliable resource to get educated about their financial lives and encourage women to build and preserve economic security. The intended outcome is to decrease the number of women who fall prey to financial abuse and exploitation and increase the number of women who understand the importance of educating themselves.

Read less
Practices :
Tax LawDrafting & Execution of Contracts & AgreementsBusiness FormationCorporate & Securities Law
Main Components of Asset and Equity Purchase Agreements
Blog Corporate Counsel
August 25, 2022

Asset and equity purchase agreements involve the culmination of a buyer and seller coming together and agreeing upon a transaction in which all or parts of a business are sold. 

Comprehensive, well-written asset and equity purchase agreements benefit both parties and provide much-needed peace of mind. When you buy or sell assets, which can include land, vehicles, office equipment, and goodwill, you want to ensure that you receive the highest value possible. 

The main differences between and asset and equity purchase are that with an asset sale, you’re only selling assets. From the buyer’s side you get to include or exclude specific assets as part of the sale. It also limits the liabilities you may inherit from the previous company. In a stock or equity sale, you’re inheriting all liabilities because they’re part of the same corporate entity.

It’s not only important to know the differences, but also the terms of the agreement. A crucial first step is deciding whether the transaction will be an asset purchase or an equity purchase. From there, organizations can delineate what assets and liabilities are included. 

Key Differences

In an asset purchase transaction:

  • There is no transfer of business ownership to the buyer. The seller remains in full ownership. In contrast, the company’s ownership is transferred to the buyer in a stock purchase method.
  • The transaction tends to be easier to consummate compared to an equity purchase transaction.
  • The buyer can choose the liabilities he is willing to bear on his balance sheet.
  • Goodwill acquired by the business can be amortized over five years, which can result in significant tax benefits.

In an equity purchase transaction:

  • The buyer needs to observe every business liability in its balance sheet.
  • The buyer may avoid paying transfer tax, but is obligated to pay taxes in an asset purchase transaction.
  • Renegotiation of employee agreements is not required.
  • The ownership of the business changes hands.

Parts of Asset and Equity Purchase Agreements

Once asset vs. equity has been decided, establishing the terms of the agreement is the next critical step. The parts and details of the agreement will be the defining piece to the speed, type, timing, and numerous other factors to the agreement, some of which include:

  • A Detailed Description – For starters, you must have a detailed description of what is being sold and the price of the acquisition. A strong purchase agreement clearly identifies the buyers and the sellers and defines the terms under which the assets or equity are transferred, and establishes the rights and responsibilities of both parties. 
  • Financing Conditions – Will terms of the agreement be financed through a personal note so the buyer can purchase it over time? Or will the buyer seek outside financing and consider how interest rates can factor into that decision? Or will it be a lump-sum purchase?
  • Purchase Agreement and Tax Allocation Agreement – The purchase agreement memorializes what assets are being sold, who the new owner will be, and how the purchase price will be allocated among the assets for tax purposes. From a tax perspective, sellers normally prefer equity sales because they get a better tax rate for the sale of a capital asset. Assets such as inventory are taxed at ordinary income rates. Buyers typically like asset sales because the liabilities of the seller’s company don’t transfer over, and they can get a more tax advantageous position with depreciating assets.

 

  • Representations and Warranties – These refer to the assertations or assurances the two parties give—what they’re claiming to be true and accurate. There must be an agreement for the contractual obligations of a purchase and the transfer of either assets or equity to be valid and enforceable. Warranties often consider such factors as operational risk, financial risk, and regulatory risk. 

The Value Specialized Counsel Provides

Every asset or equity purchase agreement requires an effective contract to dictate the business relationship. The buyer needs to be fully aware of what they’re getting themselves into and having full knowledge of where their liability is. Thus, every contract must have a clear plan to protect both the buyer and seller.

As an example, when transitioning out of your business and selling your book to a new advisor, the buyer must be guaranteed they’re getting the full value of the book. An industry standard is for the purchase agreement to include a lookback provision that allows for an adjustment of the purchase price after the first year if certain revenue metrics are not met.

Having experienced legal counsel in such situations is paramount, as experienced counsel may be able to forecast issues or implications within the agreement. A sales agreement should include covenants, closing conditions, and termination rights and serve as a reliable blueprint of how every part of a specific transaction will be handled. 

Conclusion 

The team at Jacko Law Group offers businesses the peace of mind of knowing they have a trusted legal partner that is invested in their success. We help firms maintain their operations, ranging from corporate governance, contract review, intellectual property, and more. For more information, contact us at 619.298.2880 or visit us online to schedule a consultation.

Leave a Reply

Your email address will not be published. Required fields are marked *