SCOPE OF LEGAL DUE DILIGENCE

SCOPE OF LEGAL DUE DILIGENCE 1. Regulatory compliance It would include compliance requirements of the company under various applicable laws such as Companies Act, Income Tax Act, SEBI Act rules and regulations, employee related laws, other business related laws such as pollution control laws, patent laws, applicable laws in the country where the target company is situated. 2. Contractual compliance It would include the compliance by the company under various material contracts by the company with suppliers, customers, employees etc. and to verify whether the company has complied with the terms and conditions of different contracts. 3. Compliance under intra-corporate aspects It would include the compliance by the company under the intra company documents such as Memorandum and Articles of Association, Corporate policies, procedures, code of conduct etc. 4. Financial aspects It includes thorough reading of the balance sheet to identify the financial obligations of the company, penalties paid for violations of laws in the past etc. 5. Non financial aspects It includes analysis/examination of aspects such as reputation and goodwill of the company. 6. Cultural aspects Especially in case of cross border transactions, compatiability and adaptability of corporate cultures are to be analysed to eliminate the problems that may arise out of cultural differences. Thanks