Prikhodko&Partners
Services
Corporate law Due Diligence of a company before a deal

Taras Miroshnychenko

Head of International Corporate Law and Fintech Practice

E-mail

miroshnychenko@prikhodko.com.ua

Phone numbers

Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.

Due Diligence of a company before a deal

Due Diligence, or legal audit, is conducted before entering into a commercial transaction to ensure the legal safety of the buyer, investor, or customer. Due Diligence involves verification of rights, document analysis, review of encumbrances, and identification of hidden financial misconduct. We will examine this process in more detail in the article below.

Company Due Diligence: why is it necessary?

Due Diligence is a comprehensive set of measures aimed at forming an objective understanding of the other party to the transaction, its reputation, and the offered goods or services. Depending on the specifics of the commercial transaction, such verification addresses the following tasks:

confirmation of key performance indicators previously declared;
verification of the legal status of assets, ownership rights, and the presence of encumbrances (arrests, pledges, etc.);
assessment of the company’s solvency, including analysis of hidden debts and obligations;
identification of reputational risks that may disrupt the transaction or cause financial losses;
verification of the business’s compliance with legal requirements (for example, in licensing matters).

Get a lawyer’s consultation on company Due Diligence before a transaction

Main areas of company Due Diligence before a transaction

As mentioned above, Due Diligence is aimed at verifying the integrity of the transaction party and its activities, as well as the legality and overall viability of the business. As a rule, it is mandatory when concluding M&A transactions, opening a business abroad, forming investment partnerships, etc. Such legal verification covers the following areas:

checks in state registers (whether the company is in liquidation or bankruptcy);
analysis of title documents (including confirmation of lawful ownership of assets);
verification of licensed activities (in construction, medicine, trade in excisable goods, etc.);
analysis of key company contracts (to identify hidden penalties and “pitfalls” of the transaction);
review of current and completed court cases to assess the counterparty’s reputation;
other areas relevant to the transaction party.

It will also be useful: Choosing a country for business relocation from Ukraine

What documents are required for high-quality company Due Diligence?

To conduct effective Due Diligence, a list of critically important documents is compiled and requested from the other party to the transaction. The basic list includes:

first, the charter or other valid constituent document in its latest edition;
second, documents on the internal structure of the company (for example, branch regulations);
third, title documents for assets (real estate, land, equipment, or vehicles);
fourth, contracts and documents related to intellectual property (certificates);
fifth, any permit documentation if the counterparty plans to provide specific services or goods under the transaction (licenses, construction declarations, etc.);
finally, certificates confirming good business reputation and solvency (in particular, confirmation of no tax or budget arrears).

What risks arise if Due Diligence is not conducted before a transaction?

Refusing to conduct Due Diligence before concluding a transaction is a significant risk for business. The cost of a mistake may far exceed the value of the transaction itself. The main risks faced by entrepreneurs who ignore legal audits include:

risk of discovering hidden debts and encumbrances on assets (including those involved in the transaction);
probability of receiving claims or lawsuits from third parties asserting rights to the relevant assets;
abuse by the counterparty of its position and imposition of legally unjustified penalties and liabilities on the transaction initiator;
suspicion by law enforcement authorities of the company’s involvement in the counterparty’s illegal activities (especially if the counterparty has faced criminal or administrative liability in the past or present);
risk of receiving low-quality services or defective equipment;
damage to the company’s business reputation in the future.

Find out the cost of company Due Diligence before a transaction

Why choose Prikhodko & Partners Law Firm for company Due Diligence?

The lawyers and managers of Prikhodko & Partners do not merely identify problems — they offer all possible scenarios for their resolution (including within the scope of a consultation), depending on the client’s objectives. To conduct Due Diligence, we involve a team of specialists to analyze the counterparty from all angles — from checks in key state registers to analysis of operational activities. Thanks to many years of experience, our firm offers the following areas of cooperation:

business expertise (verification of status, contracts, obtained licenses);
IT and Tech audit (verification of intellectual property rights and GDPR compliance);
in-depth compliance audit, including checks for ties with the aggressor country, sanctions monitoring, and media reputation analysis;
legal analysis of contracts and amendments to protect the interests of both parties;
preparation of a comprehensive legal report based on audit results.

We invite you to fill out the form below to receive a consultation and learn the cost of company Due Diligence before a transaction from our specialists for your business.

Calculate the cost of services

1 question

Are you planning to buy a business, shares in a company or invest in an existing project?

Yes

2 question

Does the company have assets, contracts or obligations that require legal due diligence (real estate, debts, loans, courts)?

Yes

3 question

Is it important for you to identify hidden risks before signing a contract and record them in a legal position?

Yes

Successful cases on the topic: