Effective due diligence is not the production of a long list of risks. It is the process of understanding which legal issues could affect value, timing, control or the feasibility of a transaction.
Match the scope to the transaction
A share acquisition and an asset purchase raise different questions. The diligence plan should prioritise ownership, authority, material contracts, litigation, employment, tax, property, licensing and regulatory exposure as appropriate.
Connect findings to commercial choices
Material findings can be addressed through price, indemnities, warranties, retention arrangements, conditions precedent or post-completion workstreams. Not every issue should have the same response.
- Identify change-of-control and consent provisions.
- Confirm ownership of core assets and IP.
- Assess material disputes and contingent liabilities.
- Track required approvals and closing documents.
Maintain an actionable risk register
Findings should be prioritised, assigned an owner and reflected in a realistic completion timetable. The final report should support negotiation, not simply restate the underlying documents.
This article provides general information and is not legal advice. Applicable law and the right approach depend on the circumstances; please obtain professional advice before acting.