Filings, consents, and approvals: Overview, definition, and example
What are filings, consents, and approvals?
Filings, consents, and approvals refer to the formal processes or permissions required to comply with legal, regulatory, or contractual obligations. Filings involve submitting necessary documents to governmental or regulatory bodies, such as tax filings, incorporation documents, or securities filings. Consents are the approvals or permissions obtained from relevant parties, such as a business partner or regulatory authority, to carry out certain actions or transactions. Approvals are similar to consents but often relate to formal authorization from an authority (such as a board of directors, a regulatory agency, or a business partner) to proceed with specific actions or decisions outlined in a contract or agreement.
Why are filings, consents, and approvals important?
Filings, consents, and approvals are crucial because they ensure that all required legal or regulatory processes are followed, preventing violations or non-compliance with laws. They also ensure that all necessary parties are informed and agree to the terms or actions being proposed, which reduces the risk of disputes and helps the parties involved operate within the law. For businesses, having clear guidelines on filings, consents, and approvals ensures that transactions such as mergers, acquisitions, or investments are legally sound and can proceed smoothly without encountering obstacles due to lack of permissions or approvals.
Understanding filings, consents, and approvals through an example
Imagine a company planning to merge with another company. As part of the merger agreement, the company must file documents with regulatory agencies, such as the Federal Trade Commission (FTC) or Securities and Exchange Commission (SEC), to comply with antitrust or securities laws. In addition, both companies may need to obtain consents from shareholders or lenders before proceeding with the merger. Finally, the merger may require the approval of the board of directors or other governing bodies. These filings, consents, and approvals are necessary to ensure that the merger is legally valid and that all stakeholders are in agreement.
In another example, a company may wish to lease office space in a building that requires the landlord’s consent before any modifications to the leased premises can be made. Additionally, local zoning approvals may be needed to ensure that the business operations are permitted in the area. These consents and approvals are required before the company can make changes to the space.
An example of a filings, consents, and approvals clause
Here’s how a filings, consents, and approvals clause might look in a contract:
“The Parties agree to cooperate fully in filing any necessary documents with relevant regulatory authorities, obtaining all required consents, and securing the necessary approvals for the transaction. Each Party shall be responsible for obtaining any consents from third parties and regulatory bodies, and shall promptly notify the other Party upon receipt of any approvals.”
Conclusion
Filings, consents, and approvals are essential components of ensuring that a transaction or action is legally compliant and authorized by the relevant parties or authorities. These processes help prevent legal risks and ensure smooth execution of business deals or operations. Clear understanding and agreements around the need for filings, consents, and approvals help businesses operate effectively within the bounds of the law, reducing the potential for delays or disputes.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.