Legal documents for due diligence are required for any business transactions that involve acquiring stakes or equity in other companies, acquiring property, investments or insurance and investment funds, as well as conducting company mergers. A thorough due diligence analysis will reveal any risks or liabilities, and devise strategies to limit those.

It will examine documents such as articles and bylaws of incorporation, shareholder’s agreements and capitalization tables. It will also examine governance and management structures as well as the minutes of the board and shareholder meetings. It will evaluate intellectual property assets such as trademarks, patents, and copyrights to confirm the ownership and registration status, and examine compliance with relevant laws and regulations, including the laws governing environmental, labour, health and safety, and regulatory affairs. It will also analyze financial data, including tax Virtual Data Room returns and balance sheets, filings as well as profit and loss statements and cash flow statements.

Due diligence in international law creates unique challenges. Different laws and requirements for information, document names conventions and translation requirements can all prolong the due diligence process.

It’s unlikely that most companies that are being considered for acquisition will have a completely clean slate in terms of their legal history. Therefore, it’s important to focus on key issues. Identifying the red line issues that are deal-breakers can help reduce risk and expense, and is essential to an effective transaction. Bloomberg Law Contract Solutions offers legal teams a range of tools that can streamline the contract due diligence process, including document search and retrieval online and document review collaboration tools. Learn how to enhance your contract workflow.