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What is legal due diligence for?
Legal due diligence is an essential element of any transaction involving the transfer of a business or its assets. The legal analysis provides comprehensive and detailed information on the legal situation and risks related to the company or assets to be acquired in Poland . Therefore, a potential investor will receive a crucial information on the business they are willing to invest in. In addition, this tool is very helpful for the sellers as well, who aim to prepare their companies for M&A process to obtain best possible terms of transaction.
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What can we do for you?
Our experts carry out a comprehensive examination of the company/assets involved in the transaction. They identify not only the potential legal risks related to the scope of activity and indicate ways to minimize them, but also enable you to develop a negotiation strategy and plan the acquisition process. As a result, your transaction would be safer and would be carried out more smoothly.
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Contact us
Maja Jabłońska
Manager, Attorney-at-law
E: maja.jablonska@pl.gt.com
M: +48 661 530 073
The legal audit is usually conducted at the request of the potential buyer in order to obtain information on the legal status of the business to be acquired or its assets. Armed with the knowledge of the potential legal problems and risks, you can make an informed decision whether to enter into the transaction and you are better prepared to negotiate. However, legal due diligence accompanies not only classic M&A transactions, including the acquisition of startups, but also entries into strategic collaborations through joint ventures.
Transaction best practices also provide for vendor due diligence, i.e. a legal audit carried out at the request of the seller before entering into talks with potential investors. It offers the distinct advantage of taking full account of the legal problems related to the object of the transaction, as well as pointing you in the right direction to remedy any defects which might impact on the price the investor would be willing to pay. Vendor due diligence typically encourages the seller to address any gaps in legal documentation. This leads to a more streamlined process that is advantageous for the seller.
Legal due diligence includes the examination of:
- corporate documents,
- ownership structure,
- major assets,
- employment matters,
- trade agreements,
- contracts with financial institutions,
- guarantees and sureties granted,
- permits, concessions and licenses,
- intellectual property rights,
- court disputes.
The scope of a due diligence investigation is determined individually on the basis of the client’s business needs and intentions – we offer comprehensive legal audits of Polish enterprises, as well as audits with limited scope (e.g. only labor law or trade agreements) or subject-matter (e.g. analysis of specific real estate in Poland). Our international reach and cooperation with Grant Thornton law firms around the world also enables us to conduct legal audits of entities with subsidiaries or branches in different locations worldwide.
Due diligence deliverables – what will you get?
A legal due diligence report includes:
- Comprehensive information about the audited Polish company, taking into account the specifics of the planned transaction and the requirements of the acquisition process.
- Description of the identified issues with an assessment of their significance.
- Recommendations for risk mitigation.
Due diligence – benefits related to the planned transaction
IMPORTANT
Business acquisitions present many challenges, for both the seller and the buyer. Uncertainty as to the legal status of the entity to be acquired may be a serious obstacle to achieving success in negotiations and may even result in acquiring a company or assets with hidden risks.
