Legal Due Diligence is a term used for a number of concepts involving either the performance of an investigation of a business or person, or the performance of an act with a certain standard of care. It can be a legal obligation, but the term will more normally apply to voluntary investigations.
Due diligence is a broad sense refers to the level of judgement, prudence, care, determination, and activity that a person would sensibly be expected to do under particular circumstances. The legal due diligence in corporate law is the process of conducting an intensive investigation of a corporation as one of the first steps in a pending merger or acquisition. In a company acquisition, due diligence would include fully understanding all of the obligations of the company: - Debts, pending and potential lawsuits, leases, warranties, employment contracts, long-term customer agreements, distribution agreements, compensation arrangements, and so forth.
Query Form
Legal due diligence services are offered to clients, venture capitalists, and corporate among others during acquisitions, investments, selling, and mergers. Our legal due diligence services give all the required and relevant information of the target entity so that the client can prepare before deciding on any acquisition, or investment.
The risks involved are assessed and a comprehensive due diligence report, based on due diligence check list is finally submitted to the customer. This may include few or all of this information.
- Target company/entity's history.
- Intellectual property research.
- Legal/business contract details.
- Share information.
- Financial analysis.
Scope of Legal Due Diligence
The objectives of a legal due diligence exercise may vary from case to case. Some of the basic objectives may be summarized as follows:
- Gathering of information from the target company,
- Uncovering of the target company's strong and weak sides, relevant risks and advantages in connection with the transaction,
- Minimizing the risk of unexpected situations,
- Improvement of the seller's bargaining position,
- Identification of areas where representations and warranties from the seller
- Should be obtained in the acquisition agreement.
|
