Corporate legal due diligence before an acquisition, share transfer or other business transaction organises the material legal information so that an investor, buyer or contracting party understands the obligations, pending matters and risks connected with the company or transaction.
Corporate status and authority
The review commonly starts with the company’s legal identity: articles of association and amendments, legal form, authorised representation, corporate resolutions, shareholder or partner structure and registrations relevant to the contemplated transaction. The purpose is to confirm who can bind the company and whether corporate restrictions, approvals or consents are required.
Material contracts and financing
Depending on the purpose of the transaction, material commercial agreements, loan relationships, bond or other financing arrangements, security interests, guarantees and clauses triggered by a change of control or corporate transformation may be reviewed. A long-term commitment, termination right or consent requirement can be significant when assessing legal risk.
Disputes, claims and compliance matters
Due diligence may include pending litigation or out-of-court disputes, claims and enforcement proceedings, as well as regulatory or contractual matters material to the company’s activities. Where relevant to the transaction, the scope may extend to employment arrangements, trade marks, data protection, public tenders or other specialist areas.
How findings are used
The output of the review should be connected to the transaction. A finding may require corrective action before completion or lead to a specific representation, warranty, indemnity, condition precedent or other contractual protection. In some cases it may affect price, structure or even the decision whether the transaction should proceed.
The scope is not identical for every M&A or corporate project
There is no single checklist suitable for every transaction. Scope is defined by the type of company, sector, deal structure, importance of specific assets and the information that is material to the buyer or investor. Prioritisation is essential so that the review focuses on real transaction risks.
The value of legal due diligence is not the collection of documents, but the conversion of legal information into concrete decisions about transaction structure, contractual protection and risk.
Iphigenia Andonakou’s professional experience includes legal due diligence, M&A, corporate transformations, commercial agreements, financing and business negotiations. The office provides legal support for corporate transactions in Athens and, depending on the project structure, coordinates with financial, tax and other specialist advisers.