Due diligence

Due diligence – legal check of an organisation (usually company), assessment usually conducted before company (share package) acquisition, if financial situation of a company worsens, if governing bodies of a company change), upon request of a credit institution or investor (e.g. planning to grant long-term and very big loan, acquiring bonds, etc.), when mergers or acquisitions are carried out, etc.

Purpose – to prevent unreasonable risk, to obtain information important for company acquisition (continuation, cessation, course of negotiations, etc.). Due diligence can affect buyer’s position, decision to buy or not, facilitate company transfer transaction (preparing purchase-sale agreement). It can help Seller to determine the real situation of the company and to get ready for proper information of buyers.

Object – during due diligence, information about a company, its assets, activity, relations with partners, various organisations (e.g. state institutions) is analysed and assessed. Such analysis can disclose information that is not reflected in financial statements. Object of the diligence can be labour relations, trade, agreements (requirements and obligations under them), preliminary agreements, disputes, intellectual property , insurance unusual activity, transactions, etc.

EXPROMA will provide objective and true information to you if you plan acquiring or selling company, shares, business, property, signing important partnership agreement, acquiring option or futures, issuing credit, loan, acquiring bonds or other debt securities, assessing performance of governing bodies. Or maybe you want to prepare your company for trading on organised capital market (securities exchange)? We can issue conclusions on legitimacy of acquisition of shareholders’ property, company’s activity, decisions of the bodies and governing bodies of a company, transactions of a company. When acquiring a company or taking over business, you will probably want to know risks in company’s transactions. Are they sufficiently protected against unreasonable cancellation. If you have measures to prove proper fulfilment of your obligations, etc. Upon your request, in addition to due diligence, accounting and financial audit of your company can be carried out by our partners.

Activities of our law firm in this field were favourably assessed by NEO GROUP UAB, RETAL EUROPE UAB, and other companies.

STANDARD INSPECTION PLAN:

  1. Accuracy of formation and increase of authorised capital.
  2. Check of legitimacy of incorporation, restructuring or reorganisation of companies.
  3. Legitimacy of share (interest) transfer transactions.
  4. Compliance of share accounting with effective laws.
  5. Check of compliance of managerial structure and competences of bodies of the companies with laws.
  6. Compliance of the managerial structure of the company with the list of posts and corporative documents.
  7. Legitimacy of decisions of governing bodies, legitimacy of their appointment documents.
  8. Inspection of transactions on main fixed assets.
  9. Inspection of credit transactions and their legitimacy according to laws, including transactions on borrowing from shareholders and managers. (Also leasing and factoring transactions, guarantee, security).
  10. Check of legitimacy of individual transactions.