Due diligence checklist: share purchase
Legal due diligence checklist for the acquisition of a private limited company
Background
Why use a due diligence checklist?
As a starting point for its legal due diligence, the buyer (or its advisers) will send a due diligence checklist to the seller, comprising a series of questions and requests for information relating to the target company. The seller should respond to the specific questions and provide copies of relevant documents.
Depending on the answers and documents provided, the buyer may have follow-up questions.
The buyer may include in the share purchase agreement either a general warranty or specific warranties regarding the accuracy and completeness of the answers and information provided during the due diligence process. Care should be given in answering the requests, due to potential claims for breach of warranty and misrepresentation.
The answers and materials provided by the seller should also form the basis of the specific disclosures to be made by the seller in the disclosure letter which will accompany the share purchase agreement.
About this due diligence checklist
This checklist is for the acquisition of a private limited company. The company could be a standalone company or the holding company of a corporate group which is being sold.
The checklist requests answers and information on a wide range of matters, including:
- share capital and group structure
- contracts
- litigation and compliance
- assets
- intellectual property
- commercial property
- employees
- finance and insurance
- tax
Document features
Features include:
- checklist in table form for completion by the seller
- subject headings covering the main areas of interest to a corporate buyer
Explanatory guidance
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