Connecting the Dots in Legal Due Diligence

Due Diligence

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 due diligence team is always trying to locate the documents provided months ago.

When you keep everything organised, it helps you see the bigger picture.

For example, if a company discloses that it has bought a new vehicle, that’s your cue to check if there’s also a new hire purchase agreement and insurance policy.

If the company has entered into a contract which requires notification to the relevant authority, it’s prudent to check whether there is any licence required or levies payable to the authority.

Legal due diligence is about paying attention to the details without losing sight of the overall purpose.

#MalaysianCorporateLawyer

#legalduediligence

This post first posted on LinkedIn on 5 July 2024.

Linkedin Post
Earn-out: A postponed dispute?

An earn-out is often the solution when a buyer and seller cannot agree on price. The seller believes the business is worth more than what the buyer is willing to pay upfront. So, the parties resolve the issue by deferring the portion of the price they cannot agree on, with …

Linkedin Post
The disclosure letter: Why founders selling their companies should not treat it as an afterthought

When founders sell their companies, the scope of legal work usually focuses on the share sale and purchase agreement (SPA). The disclosure letter is sometimes treated as secondary to the SPA but it should not have been the case. The disclosure letter sets out the exceptions to the sellers’ representations …

Linkedin Post
Third-party consents in a share sale: What sellers should check before negotiating

When a company is sold, due diligence is usually conducted by the buyer, not the seller. That means the consents required from regulators, other shareholders, financiers or IP licensors to complete the sale are often only discovered when the buyer’s lawyers identify them during legal due diligence. By then, the …