Legal Due Diligence: concepts and reasons for buying

Legal due diligence (ldd) is an independent verification (legal audit) of certain legal aspects of the client’s activities by qualified lawyers in order to identify and assess legal risks, as well as prepare recommendations for their minimization. – independent legal audit (verification) of the client’s business by qualified lawyers in order to identify and assess legal risks, as well as prepare recommendations for their minimization. Legal due diligence (independent business audit) includes the following legal services – verification:

• Partner – in order to provide complete, objective and independent information about his reputation, financial position and reliability;
• Transactions – to check its purity and the risks of conclusion;
• M & a – when deciding whether to acquire a stake in a business or a business project as a whole, determining the optimal strategies for such an acquisition;
• Business – for the purpose of independent third-party verification of the state and level of legal security of a company or business as a whole, development of recommendations to improve their efficiency;
• Business situations – to provide an objective assessment of individual business situations, potential and existing litigation, to identify effective legal positions and strategies.

Benefits of conducting an independent ldd for the client

• Objective understanding of the business or individual business situations, even those that were not known to the client at the time of the audit, but have negative consequences for his business.
• Effective risk management by identifying the existing and potential legal risks of the client’s business, his weaknesses
• Rationale for further business development and improvement of existing business processes
• Looking at the business or business situation from the outside and getting a solution that the client did not even think about.
• Maintaining the reputation of the client as a knowledgeable and reasonable business partner due to the “quality control” of strategic counterparties
• Saving money and time for the client by making an effective decision based on complete, reliable and comprehensive information provided by independent experts
• Reducing the level of emotional stress of the client by making the most informed decision in conditions of objective uncertainty

Secondary services for sale

• Legal support of negotiations and mediation;
• Representation in courts (commercial and administrative);
• Legal support of compliance;
• Subscriber service (legal outsourcing) of the company;
• Preparation of the necessary legal documents.

Reasons for Purchase

• Counterparty check
• Business acquisition / sale
• Acquisition of movable and immovable property
• Restructuring and optimization of the company
• Company takeover threat
• The prospect of an inspection by regulatory authorities
• Placement of securities
• Conclusion of a major transaction, an interested party transaction
• Increase the authorized capital
• Purchase and sale of corporate rights, shares
• Pre-trial / trial perspective
• Conclusion of transactions with objects of intellectual property
• Compliance with licensing requirements
• Independent comprehensive control of the business as a whole
• Legal support of compliance;
• Subscriber service (legal outsourcing) of the company;
• Preparation of the necessary legal documents.

An independent legal audit is applied in the following cases:

• Buying or selling a business,
• Acquisition of individual investment objects,
• Signing a business agreement,
• Cooperation with a strategic counterparty,
• Selecting a long-term business partner,
• Improvement of existing business processes,
• Identification and assessment of legal business risks and their minimization,
• Identification of weak points in business activities and their smoothing,
• Determining the prospects for the development of individual business situations and developing a strategy for further actions.

Consumer insight “The audit will help prepare the business for sale, and then I will receive an excellent cash bonus from the net profit” “The audit will help prepare the business for scaling or restructuring, then we will avoid losses and I will get more money” “The audit will help to find thin spots in business processes for correction within the company, which will help avoid losing money and save my job” “The audit will show the real state of affairs in business, after which I can fix everything and the level of my well-being will increase” “The audit will help me understand the state of the business that I plan to acquire, and then I can make the right decision – to buy or refuse” “I need to conduct an audit because I am emotionally stressed due to ignorance of the actual situation, and therefore the options for the solution.”