CHECKLIST FOR LEGAL DUE DILIGENCE

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As discussed in my previous post, here is a detailed draft checklist for Legal due diligence. ❇️Legal due diligence helps the investor to mitigate the risks before an investment and this fundamental exercise should not be overlooked. ❇️Do connect if you have any queries or require any assistance. Have an amazing week ahead!


 DOCUMENTS REQUIRED FOR LEGAL DUE DILIGENCE

 

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SR.NO

 

   PARTICULARS

 

DETAILS

 

 

 

1.

 

 

 

Corporate Structure and Governance

1.       Incorporation details

2.       Shareholding structure

3.       Details of Board of Directors and Key Managerial Persons

4.       AoA and MoA

5.       RoC filings

6.       Board Resolutions

7.       Related Party Transaction

 

 

2.

 

 

Debt Financial Documents

1.       Bank Loans

2.       Facility Agreements

3.       Sanction Letter and Security documents

4.       Loan foreclosure letter

5.       Shareholder or director loans

6.       RoC charge filings

 

 

 

3.

 

 

 

Legal and Regulatory Compliances

1.       Compliance reports in accordance with Companies Act, 2013 and SEBI Act, 1992, if applicable.

2.       Statutory Registration details.

3.       Compliance with sector specific legislations.

4.       License and approvals from the applicable authority.

5.       Currency Controls

6.       Environment Clearance and approvals

7.       Required approvals under Competition Act, 2002.

 

4.

 

Tangible Properties – Movable and Immovable

1.       Details and documents pertaining to Owned Property, Leased Property and properties on leave and license.

2.       Details of Vehicles, fixtures, machinery etc.

 

5.

 

Intangible Properties- IP

1.       Details and registration of Trademarks, Patent, design, domain names and ownership of the IP used by the Company.

2.       Details pertaining to validity and renewal of the registered IP.

 

6.

 

Human Resource and Company Policies

1.       HR Policies

2.       Code of Conduct

3.       Anti-corruption, Anti-bribery and Anti-money laundering policies

 

 

7.

 

 

Employment contracts and Matters

1.       Employment Contract

2.       Proprietary and Inventions Agreement

3.       Contracts with consultants and contract labors.

4.       Compliance with applicable statutory provisions.

5.       Employee benefit plans and ESOPs.

6.       Golden parachute agreements

 

 

8.

 

Key Contracts

1.       Customer Contracts

2.       Operational Contracts

3.       Commercial Contracts

4.       Third Party and Supplier Contracts

5.       Sub-contracting Contracts

 

9.

 

Legal Proceedings

1.       Any case filed by the company or filed against the Company.

2.       Proceedings against the directors.

3.       Regulatory notices and any proceedings or claims raised under Foreign exchange or by ED, tax authorities or any semi-government authorities.

 

10.

 

Insurance and allied matters

1.       Details of Insurance Covers for Directors and Officers.

2.       Details of