Legal documents for due diligence are required during any business transaction that involves the acquisition of equity or stakes in other companies, acquiring properties, investments or insurance and investment funds, as well as conducting mergers between companies. A thorough due diligence review will identify potential risks and liabilities and strategies to mitigate them.
It will examine legal documents, such as articles of incorporation and bylaws, shareholder agreements, capitalization tables as well as governance and management structures and board and shareholder meeting minutes. It will examine intellectual property assets like trademarks, patents, copyrights and patents to confirm the status of registration and ownership and investigate compliance with relevant laws and regulations, such as environmental, labour, health and safety, and regulatory affairs. It will also analyze financial information, including tax returns as well as filings, balance sheet the profit and loss statement, and cash flow statement.
Due diligence in international law poses unique difficulties. Different jurisdictional laws and information requirements as well as document names conventions and translation requirements can all prolong the due diligence process.
It’s unlikely that the majority of companies that are being considered for acquisition will have a completely clear slate when it comes to their legal history. Therefore, it’s vital to concentrate on the most important issues. Recognizing the’red line’ issues that can cause a deal-breaker helps reduce risk and expense and is crucial to the success of a transaction. Bloomberg Law Contract Solutions offers legal teams a range of tools to streamline the contractual due diligence process, which includes document search and retrieval online and collaboration tools for document review. Find out more about how you can improve the efficiency of your contract workflow efficient here.