Due diligence documents are required for any business transaction that involves acquiring stakes or equity in a company, buying property and insurance, investment funds or investing. A thorough due diligence review can identify any risks and liabilities that could be a risk and strategies to minimize them.
It will examine documents such as articles and bylaws of incorporation, shareholder agreements and capitalization tables. It will also examine governance and management structures, and minutes from meetings of shareholders and board meetings. It will also examine intellectual property assets such as trademarks, patents, and copyrights, to confirm ownership, registration status, and examine the compliance with applicable laws, including the laws governing health, environment and regulatory issues. It will also review financial data such as tax returns and filings, balance sheets as well as profit and loss statements and cash flow statements.
International legal due diligence presents an array of unique challenges. Different jurisdictional law and information requirements, document naming conventions for documents and the need for translation can all delay the process.
It’s unlikely that many target companies will have a new slate with regard to their legal background. Therefore, it’s crucial to focus on key issues. It is essential to identify the key issues that could determine the outcome of a transaction. This will reduce the risk and expenses and ensure the success of the transaction. Bloomberg Law Contract Solutions offers legal teams a range of tools that can streamline the contract due diligence process, such as document search and retrieval online and collaboration tools for document review. Read more about how to make your contract workflow more efficient here.