Things that Need to Be Prepared in Due Diligence – Due diligence is mandatory and very important for a prospective buyer in the business world. This is because the buyer or new owner of an asset needs to be responsible for all matters that occur in the business. Legal due diligence is an examination carried out by a legal consultant at a company.
Many things must be prepared to be checked and verified. Here are some of them.
Information regarding the current board of directors and their identities is very important. Your Legal Consultant needs to find out if any directors are involved in a case that might affect the company.
You should know the articles of association of the company you are buying. Ask for the deed of establishment of the company, business activities, and also changes to the articles of association if any.
Preparing documents regarding the provisions for the appointment of commissioners or directors also needs to be examined. Also, ensure that there are documents regarding regulations within the company as well as provisions for holding meetings.
Also, check the company’s assets. Make sure the documents regarding the assets owned are complete. Check ownership status and also disputes if any, as well as asset encumbrances.
Prepare documents regarding the history of tax payments and also the company’s Taxpayer Identification Number (NPWP). Find out if there are any taxes owed or a history of late paying taxes.
In addition to taxes, insurance documents must also be prepared. You need to know things related to insurance such as the object of insurance, the guarantor, the risks covered, the number of dependents, up to the period.
Also, find out what assets are insured by the company. Investigate also the ability of coverage or the ability to cover the risk of dependents.
You also need to check cooperation agreements with third parties. For example debt agreements, suppliers, to shareholders. Make sure everything is recorded properly.
The company’s internal matters also need to be examined. Therefore, you need to know documents related to employment issues such as social security, work permits, work agreements, and labor wages.
Finally, documents regarding claims or disputes. Your investigator will also need to examine various documents regarding claims, disputes, and cases. These issues should be examined to know the state of the company.
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