What turns up during legal due diligence?

Due Diligence

First-time sellers are often surprised by what turns up during legal due diligence conducted by buyers’ lawyers.

Buyers’ lawyers will comb through everything and they will flag non-compliance issues that most founders didn’t realise were even a problem.

Some common ones:

  • Agreements have lapsed, but business continues as usual
  • No board or shareholder resolutions for deals that require directors’ and shareholders’ approval
  • Agreements not stamped (so stamp duty not paid)

These usually aren’t deal breakers.
But they slow things down and cost time, momentum and more money to resolve.

You’ll either have to fix them before signing, or the sale and purchase agreement will need to address the issues.

Getting it right upfront helps the deal move faster and gives buyers more confidence in the business.

This post was first posted on LinkedIn on 19 May 2025.

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