The purchase or sale of a company or a part thereof is a business decision that opens up great possibilities but also risks.
Due Diligence (DD) denotes the “due care“ with which the target of an acquisition or a public offering is investigated when companies, participations in companies, real estate or public offerings are bought or sold.
Due Diligence examinations analyse the strengths and weaknesses of the company in question, as well as the risks connected with the purchase or public offering. Careful analysis and evaluation of the target company becomes increasingly important, as information asymmetries between seller and purchaser need to be broken down, the opportunities and risks relating to the target company need to be correctly evaluated and “deal breakers” need to be identified in good time.
TPA and its affiliated law office provide the following legal investigations and analysis necessary for company evaluations:
- Complete analysis of the company status; corporate issues, according to the target’s incorporation documents, the shareholder registry including, but not limited to, analysis of the share capital subscribed and paid-in
- The target’s decision making rules and representation towards third parties
- Related party transactions
- The legal title of the target company’s assets, ownership history of encumbrances and changes, any third party rights
- Review of lease engagements (tenant contracts)
- Banking arrangements and other financing facilities (including terms, covenants and details of security given to third parties) and contingent liabilities
- Key contracts of the target company, covenants, securities and related commitments with key customers
- Employment issues, contracts with key employees
- Business permits and licenses for the target company’s activities
- Minutes of controls and audits by the competent legal authorities
- Litigation (present and potential)
- Other items identified or requested by the investor