What Founders and Sellers Often Overlook Before an Exit

Due Diligence

Most founders or sellers are caught off guard when lawyers ask simple but important questions during legal due diligence:

  • Has the resolution been properly passed / shareholders’ and board approval obtained for a past transaction undertaken by the target company?
  • Was the agreement entered by the target company stamped on time?

These may look like “tick-the-box” matters but overlooking them can delay a deal.

Buyers typically don’t want to inherit compliance issues from the past, especially if they may be exposed to penalties and liabilities after acquiring the companies.

I have seen buyers request:

  • rectification of non-compliance before completion;
  • payment to be held back until issues are resolved; or
  • indemnities from sellers to cover the risk.

Negotiation and rectification of these issues take time and money and weaken the sellers’ position.

What looks like a minor compliance issue today may become a sticky negotiation point tomorrow.

In M&A, the big numbers grab attention.

But it’s the “boring” details that complete the transaction.

#MalaysianCorporateLawyer

This post was first posted on LinkedIn on 21 September 2025.

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