Legal Due Diligence

Let’s start by defining Legal Due Diligence.
Legal Due Diligence is simply the process by which legal documents and information relating to a target company are collected and assessed. Furthermore, Legal Due Diligence can be defined as a study of a target company in terms of many areas such legal, tax, financial, environmental, human resources in the process of mergers & acquisitions and corporate finance transactions, conducted to clearly reveal its true condition.
The function of the Legal Due Diligence is to allow investor or purchaser to have a clear picture of the status of the target company in terms of the area above stated, and also identifying risk factors and make accurate decisions for going through with the planned transaction or its terms and conditions.
It is important to note that during a Legal Due Diligence, the purchaser or investor usually reviews the investee’s commercial books and records, operational information, financial documents, contracts movable and immovable property records, intellectual property documentation, governmental permits and approvals, human resources documents and application, legal disputes proceedings such as lawsuits and enforcement procedures concerning the target company.