Practices
Legal Due Diligence
An essential step for any M&A transaction, IPO preparation or inner corporate reorganization, is to carry on the proper business research (Due Diligence). It evaluates the status of the legal entities and predicts the probable risks relying on an objective opinion of professional consultants.
Depending on each client’s individual need, Incor Alliance conducts Legal and Financial Due Diligence of companies in various types of business. The depth of the research varies according to the requests of the clients and existing realities. With our support, special kinds of expertise can be given to companies being inspected, from ecological to technical.
The risks and peculiarities of businesses being acquired, determined during the process of Due Diligence, affects the fair price of the acquisition target. The risks established help in the proper structuring of the deal in order to minimize the effects thereof. They also allow the precise formulation of the proper warranties and representations of all parties.
The following scope of research is common for Legal Due Diligence:
- Corporate matters: Foundation, registration, charter capital, main provisions of the constitutive documents, change in shareholders.
- Property: Legal analysis of the legal facts upon which an inspected company owns immovable and movable property.
- Licenses and Permits: Legal analysis of issued licenses and permits to the inspected company, by which it conducts its activity.
- Agreements: Legal analysis of essential agreements, on existence and fulfillment of which the company's main activity depends (equipment, supply, agreements with clients), lease agreements analysis, analysis of loans and loan contracts, major deals and interested party transaction analysis.
- Labor relations: Legal analysis of standard form contracts with employees and contracts with top-management of the inspected company. Pointing out key employees, whose activity influences managerial and financial efficiency.
- Intellectual Property: Legal analysis of intellectual property status owned or used by the inspected company. Analysis of the existing license agreements, existence of registered trademarks and commercial names.
- Litigation: Legal analysis of documents and materials from the litigation, where the inspected company is taking part at the moment of the Due Diligence.
