Three Key Points for Company Constitutions
We are often asked by corporate clients to review template company constitutions to ensure compliance with Malaysian laws. Although some clauses in these templates may comply with the laws, they may not always reflect the clients’ intention. The following are three common issues I encounter: 1. Waiver of pre-emption right …
What should purchasers consider in M&A transactions?
Other than the purchase price, what should purchasers consider in M&A transactions? In M&A deals, purchasers should consider aspects beyond the purchase price that could impact their acquisitions. The following are three factors to consider: 1. Guarantee for the target’s borrowing If the target has financing facilities guaranteed by the …
Frequently Encountered Issues in Acquisition of Entrepreneurs’ Businesses
There are some issues that I frequently encounter in start-ups/ entrepreneurs’ businesses when conducting legal due diligence for buyers seeking to acquire such businesses. Here are some of the issues: 1. No Separation of Legal Entity A founder may own several companies at the same time. It’s common for a …
M&A: Is consent or notification required?
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 …
What to Look Out for When Acquiring Companies: Material Contracts
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 …
Is there any good reason not to conduct legal due diligence in M&A transactions?
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 …
Regulatory requirements for M&A in Malaysia
I find one of the most challenging aspects of an M&A transaction in Malaysia is the regulatory regime in which the target company operates. If the target company requires certain licences for its operations or operates within a regulated industry, the M&A process must take into account the relevant regulatory …
Dealing with ambiguities in law
One evening, feeling rather concerned, I walked into a colleague’s room in office to seek advice on an interpretation of licensing requirements. If you are familiar with the Malaysian regulatory landscape, you would understand that some licensing requirements are not laws that can be addressed solely through one’s experience and …
Why should a company adopt a constitution?
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 …
Due Diligence: What Are Salient Terms?
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 …