Legal due diligence: buy-side and sell-side
We will check a company in the Emirates before the money moves: what it owns, what it owes and what stays after closing — or prepare yours to be checked by someone else.
Tax records
Налоговые документы
7 years
7 лет
Losses after a sale
Убытки после продажи
50% ownership test
тест на 50% владения
When you need legal due diligence
You are buying a company
The price was agreed from a pitch deck. What the company actually owns, owes and has promised is a different document, and it has not been read yet.
An investor is coming into yours
Someone is about to read your company the way a stranger reads it. What they find sets the terms, and finding it first is what changes them.
The seller keeps promising disclosure
The data room fills slowly and the gaps are the interesting part. What is missing has to be named in the report, alongside what was checked.
You are entering a joint venture
Two companies put assets into one vehicle. Whether each side owns what it is contributing decides what the other side is actually getting.
The licence may not cover the business
The company trades in activities that its licence has to permit. A mismatch here reaches contracts, banking and the ability to keep operating.
A deal fell through on diligence before
A previous buyer walked away and the reasons were never fixed. The next buyer will find the same things in the same place.
What you get
- An issues report by materiality
- What was verified, and how
- What could not be established
- Terms that answer each issue
- A list for the seller
What is required for legal due diligence
Due diligence is not a certificate that a company is safe. It says what was verified and against what evidence, what rests on the seller’s own statement, and what could not be established inside the scope and the time agreed.
That is why the scope, the materiality level and the exclusions are settled before the data room opens. A review that starts without them turns into a limited look that reads afterwards like a full investigation.
What we check
- Existence and authority: legal form, licence, registered activities, managers and who may sign what.
- Ownership: the share chain to the people at the top, pledges, options and restrictions on transfer.
- Contracts that carry the business: customers, suppliers, premises, financing, and what each says about a change of control.
- Tax and filings: registrations, returns, positions taken and what happens to carried-forward losses when the owner changes.
- People and permits: employment terms, end-of-service liabilities, visas and the approvals the operation depends on.
- Disputes and claims, open and threatened, with what each one could cost if it goes the wrong way.
What the review needs from you
- The deal as intended: a share purchase, an asset purchase, a minority stake or a joint venture. The answer changes what matters.
- What you are paying for. If the value sits in one contract or one product, that is where the depth goes.
- Access, and a named person on the other side who can answer questions without a meeting each time.
- The deadline, because the scope is set to the time available and the report says so.
Selling side: the review backwards
- We read your company as a buyer would, and give you the findings before a buyer produces them across the table.
- What can be repaired before the process starts gets repaired; what cannot is disclosed deliberately instead of being discovered.
- The data room is built to answer the questions in the order they get asked.
- Rights in the product are a review of their own, and where that is the value, it is where an ip rights audit goes deeper.
Sources: a taxable person in the Emirates must keep records for seven years after the end of the tax period they relate to, which sets how far back a buyer can reasonably look. Carried-forward tax losses survive a change of owner only where the same persons kept at least half the ownership, or where the business carried on the same or a similar activity afterwards.
Stages of work
Scope, materiality and exclusions — 2–3 working days.
We agree what the review covers, the level below which a finding is not reported, and what is left out on purpose. All three go into the report itself.
Public and official records first.
We start with what can be checked without the seller: the licence, the legal form, the registered activities and the status of the company.
A clean result from a register answers only the question that register was built to answer, so it is a starting point.
The request list, and what comes back.
You get one list, ordered by what matters, and we track what arrives, what arrives partly and what never arrives at all.
The last group is a finding in its own right, and it is reported as one.
Reading the documents against the claims.
Every material statement gets tied to a document: the share chain, the licence, the contracts that carry revenue, the tax filings and the employment terms.
The issues report.
Findings are ranked by what they could cost, each with the evidence behind it and what would close it: a price change, a condition, a warranty or an indemnity.
Carrying the findings into the deal.
The report is written so it can be used, and each open item is matched to the term in the agreement that answers it.
What else we do around transactions is in the M&A & Fundraising area.
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