Legal due diligence: Spotting errors with common sense

Due Diligence

In legal due diligence exercise, it is easy to get lost in all the details, especially when there are urgent deadlines and voluminous documents to be reviewed.

Some errors in legal due diligence reports are obvious when you take a step back and apply common sense.

It doesn’t make sense that:

• The date of a supplemental/amendment agreement is before the date of the main agreement.

• The date of certificate of registration of charge is before the date of creation of the charge. Under the Companies Act 2016 of Malaysia, a company must register a charge created over its property after the charge is created. The Registrar of Companies will then issue a certificate of registration of charge.

#malaysiancorporatelawyer
#legalduediligence

This post was first posted on Linkedin on 20 May 2022.

Linkedin Post
Preference Shares: A Path Through Malaysia’s Equity Restrictions

Regulatory equity restrictions don’t always mean “no entry” for investors in Malaysia. If you’re restricted from holding ordinary shares in certain sectors due to regulatory policy, preference shares may offer a practical alternative. You may want to consider preference shares if: 1.    The sector has no restrictions on preference shares. This …

Company Law
Does family-owned company require formal shareholders’ approval for issuance of shares?

“This is my family-owned company. Do we still need formal shareholders’ approval to issue shares?” Yes. Under section 75 of the Companies Act 2016, directors cannot exercise their power to allot shares without prior shareholders’ approval. This is a legal requirement even if all the shareholders are family members. Skipping …

Linkedin Post
Pay for proper legal advice when it comes to shareholders agreement

Most people I know are reluctant to pay for proper legal advice when it comes to shareholders’ agreements. Many assume shareholders’ agreements are just templates. However, in practice, especially in M&A or fundraising, these agreements must align with the Companies Act 2016 and other relevant regulatory requirements. Otherwise, what is …