Due diligence documents are required for any business transaction that involves acquiring equity or stakes in another company, purchasing property or investment funds, insurance or acquiring investments. A thorough due diligence review can identify potential risks and liabilities and devise strategies to reduce them.
It will examine documents like articles and bylaws of incorporation, shareholder agreements and capitalization tables. It will also analyze the governance and management structure and the minutes of board and shareholder meetings. It will evaluate intellectual property assets like trademarks, patents, and copyrights to verify ownership and registration status, and look into compliance with relevant laws and regulations, such as health, environmental, health and safety, and regulatory affairs. It will also look at financial information, such as tax returns filed, balance sheet as well as the profit and loss report, and cash flow statement.
International legal due diligence presents an array of unique challenges. Different jurisdictional law and information requirements documents, document naming conventions, and the need for translation can all delay the process.
It’s unlikely that most target companies will have a clean slate in terms of their legal history. Therefore, it’s essential to focus on key issues. It is important to identify the issues that will determine the outcome of a transaction. This can reduce risks and costs, and guarantee the success of the transaction. Bloomberg Law Contract Solutions offers legal teams a variety of tools to streamline the contractual due diligence process, such as document search and retrieval online and document review collaboration tools. Learn more about how to make your contract workflow more efficient here.
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