Here’s how I conduct legal due diligence. Before diving into drafting the sale and purchase agreement for an M&A transaction, it makes sense to first understand the business of the target company and the regulatory framework in which it operates. Consider the following: 1. Business Activities What are the principal …

Part of due diligence skills lies in organising documents in a way that allows you to connect the dots. If a legal due diligence exercise spans more than a few months, it’s essential to have a system for tracking the documents you have reviewed. It can be frustrating when the …

“Am I too optimistic or is the other adviser too pessimistic?” I wondered after concluding a call with an adviser who had ranted about due diligence issues. Due diligence can indeed be frustrating for all parties involved. For the management of the target company tasked with responding to due diligence …

In an M&A transaction, it should be determined early on whether consent from or notification to the following parties is required for the change of shareholder or director of the target company: (a) regulatory body (pursuant to a condition imposed on a licence or regulatory requirements) (b) counterparty of a …

Potential buyers/ investors who want to acquire companies should consider conducting legal due diligence on the target companies before their investments. One key aspect of legal due diligence are material contracts of the companies. Legal due diligence on material contracts allows the potential buyers/investors to assess the business, liabilities and …

I have read articles and written about why legal due diligence is important for M&A transactions and buyers should not merely rely on sellers’ warranties. I have yet to come across any articles suggesting  that there may be valid reasons to skip legal due diligence in M&A transactions. Whenever potential …

In the context of an M&A transaction, why can’t shareholders solely rely on a shareholders’ agreement after completion of the transaction? Where there is more than one shareholder after completion, the next step after execution of a shareholders’ agreement is to either amend or adopt a constitution that is consistent …

In corporate transactions, junior lawyers are often tasked with reviewing contracts and summarising salient terms for inclusion in legal due diligence reports. For those new to legal due diligence, a frequently asked question is, “What do you mean by salient terms?”. Generally, salient terms include information that investors need to …

At our firm, we are regularly engaged to carry out legal due diligence for investors seeking to invest into promising companies. Some of these investees/target companies are family-owned business and startups. We frequently encounter situations where contracts have been entered into by an unintended or wrong corporate entity, creating potential …

When conducting due diligence, the searches of publicly available information from the relevant government agencies and credit reporting agencies in Malaysia include the following: 1. Companies Commission of Malaysia (CCM) Company search provides corporate information, particulars of directors and shareholders, issued share capital, company charges and summary of financial information. Copies …