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 seller may have already agreed on key terms with the buyer, and any consent required becomes a delay.

A seller who identifies these issues upfront, before negotiating the transaction agreements, goes into the negotiation with a clearer view.

A seller should identify whether consents from the following parties are required:

1. Regulators

If the company requires a licence to operate its business or is in a regulated sector, check whether approval from the relevant regulator is required for the transaction.

2. Other shareholders or security holders

Whether consent or waiver is required depends on the shareholders’ agreement, subscription agreement, the company’s constitution and the terms of issuance of the shares or securities. If there are different classes of shares or types of securities, the level of consent required i.e. simple majority, supermajority or unanimous, may differ for each.

3. The company’s financiers

If the company has loans, check whether there are covenants requiring consent, or terms of financing that would be breached by the sale. If so, consent or a waiver from the bank or other financier is required before the sale can proceed.

4. Owners or licensors of intellectual property

If the company uses IP licensed from a third party, check the licensing terms on whether consent is required or whether any terms would be breached by the sale.

If the company uses IP registered under a related company within the Group, assignment from the IP owner within the group may be required if the company intends to continue to use the IP.

Generally, there is no equivalent of buyer’s due diligence on the seller’s side unless the seller specifically engages its lawyers to conduct one. A limited review at the outset focused on identifying required consents puts the seller in a better position to control the timeline.

This post was first posted on LinkedIn on 12 August 2026.