We can list numerous corporations who rushed into professional marriages without performing legal due diligence or reviewing the corporate structure and relevant documents of the company.
Legal due diligence of a corporate entity is often a lengthy and a cumbersome task, which can significantly impact the timeline of the project. In any merger or acquisition, parties are usually concerned about the time frame and desire to finish the transaction at the earliest. The Corporate Lawyers of UAE will highlight certain important aspects of due diligence in any merger or acquisition transaction under UAE laws.
The scope of due diligence exercise vary in each transaction, and it will rarely be general and covers all aspects of the company related to the sale. It is less likely that the due diligence review will be limited in scope as it involves review of all significant issues pertaining to the company which might impact the merger or acquisition transaction. It further depends upon the organization structure and the business of the target company that can either be retail, construction, telecommunication or any other activity. In each of the companies, the lawyers have to review the business structure, assets in order to determine the shortcomings of the company and how to improvise such deficiencies. There is a direct nexus between the size of the company and the extent of due diligence review as for a small acquisition transaction does not require extensive due diligence review. However, in a significant acquisition transaction, a thorough investigation of documents is required for in-depth knowledge of target-company.