Legal Due Diligence
Description of possible areas of review                                                                                   Back to Due Diligence Panel

1. Company Administration

What is it?
Review of the registry situation of the company, that all legal books and documents have been filed correctly. Review of the shareholding of the company and of its directors and administrators. Review of shareholder agreements. Identification and review of any powers of attorney granted by the company. Review of participations held in subsidiaries, associated companies or other investments, and powers over these companies. Review of the correct filing of annual accounts.

When is it recommended?
Recommended for all operations.

2. Contracts

What is it?
Review of all mercantile contracts held by the company. The review will make a particular focus on those contracts that have a significant impact on the business or those that may be affected by the transaction. Verification and review of change of control clauses in all contracts.

When is it recommended?
Recommended for all operations, especially where there is a change of control. Particularly recommended in transactions where the value or commercial situation of the target company depends to a large extent on the contracts to which it has subscribed.

3. Title to Assets

What is it?
Verification of the title, charges and burdens of the most significant assets of the business.

When is it recommended?
Especially recommended in operations where there exist certain assets that form a significant or crucial part of the target company’s business.

4. Insurance

What is it?
Review of insurance policies held by the company and review of pending claims. Of particular relevance are those insurance policies that are required by law.

When is it recommended?
Recommended for all operations, in particular those operations where the company is obliged to obtain insurance in order to comply with legislation relevant to its business activity.

5. Administrative / Environmental Law

What is it?
Review compliance with environmental legislation and administrative legislation specific to the company’s business activity. Review the state of the company’s licences and authorisations to carry out its business activities.

When is it recommended?
Recommended where the target company operates in regulated sectors and/or where the business activity may have an environmental impact.

6. Intellectual and Industrial Property

What is it?
Review of the Intellectual and Industrial Property situation of the company (trademarks, patents, utility models, logos, trade names, domain names etc.). Review of compliance with legal requirements, and review of employee contracts and contracts with technological suppliers with respect to Intellectual Property.

When is it recommended?
Particularly recommended where Intellectual or Industrial Property forms a key part of the target business’s assets, or where the company holds contracts with key technological suppliers.

7. Data Protection

What is it?
Review of compliance with personal data protection legislation.

When is it recommended?
Recommended where the company has electronic databases of personal data, and in particular if the company holds sensitive data or sells databases.

8. Grants

What is it?
Review of grants, bonuses and incentives. Review of the conditions of award and any implication of the transaction on their award.

When is it recommended?
Recommended for all operations where the company has received any form of grant, bonus or incentive.

9.  Litigation

What is it?
Review of current and potential future claims or proceedings, be they judicial, administrative or arbitral. Review of pending judicial resolutions for or against the company.

When is it recommended?
Recommended for all operations, in particular for companies that are or may be implicated in claims or proceedings, in order to assess the possible level of risk.