What information can you get from directors’ and shareholders’ minutes/ resolutions?

Due Diligence

During legal due diligence for a corporate exercise, review the resolutions and minutes books of a target company for the following:

  • Were shares properly issued with shareholders’ approval?
  • Did the company circulate its annual financial statements to shareholders?
  • Have the directors approved any unusual dividends?
  • Where a director is interested in a contract or proposed contract with the company, has the director declared his interest? (s221, Companies Act 2016)
  • For the acquisition or disposal by the company of an undertaking or property of substantial value, has shareholders’ approval been obtained? (s223, Companies Act 2016)
  • For transactions entered into by the company with its directors, substantial shareholders, or any person connected with them, has shareholders’ approval been obtained? (s228, Companies Act 2016)
  • Have material contracts been approved by the board of directors?

#malaysiancorporatelawyer

#mergersandacquisitions

#duediligence

This post first posted on LinkedIn on 8 August 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 …