Due diligence is also a concept found in the concept of limitation period in civil law. Often, a limitation period begins against a plaintiff when the plaintiff knew, or should have known, if they had investigated the matter with due diligence, that they had a claim against a defendant. In this context, the term “due diligence” determines the extent of a party`s implied knowledge when it receives sufficient disclosure of facts to constitute a “notice of investigation” warning a potential claimant that further investigation may give rise to a cause of action. Al termine dell`attività di Due diligence legale, le risultanze vengono descritte in un rapporto scritto (c.d. DD report), che costituisce la base per la valutazione della convenienza e dei rischi dell`operazione, nonché il presupposto per la negoziazione delle condizioni e delle modalità della stessa. Due diligence is the investigation or exercise of due diligence normally expected of a reasonable entity or reasonable person before entering into an agreement or contract with another party or an act with a certain standard of care. Among the contracts that deserve more attention are bank contracts. The relationship between the target company and credit institutions must be assessed and analysed both from the point of view of the existence of active financial situations, such as cash deposits, debt securities, loans, and passive financial situations, such as loans, bank loans, etc. It is therefore necessary to examine the various loan opening agreements, mortgage and bank account agreements in order to enter the duration, withdrawal conditions, operating conditions, etc. The analysis of the correspondence between the different credit institutions and the target company will not be neglected, also in order to identify critical points such as the revocation of loans. Particular attention must be paid to guarantees of all kinds in favour of third parties. Due diligence also covers another very important aspect.

We refer to the health and safety of workers, with regard to whom it is necessary to verify compliance by the target company with the obligations referred to in Legislative Decree no. 626 of 19 September 1994 and the subsequent additional and amending measures relating to measures to prevent accidents and major accidents. In view of the criminal liability arising from non-compliance with the above-mentioned legal provisions, this phase is absolutely necessary and delicate and consists of the examination of the managers, the doctor in charge, the internal regulations of the organization, the establishment of the security and prevention service, training, regular reports). Due Diligence Costs – The costs are often very high, especially when it comes to companies with significant structural dimensions or when it comes to groups or companies located in different countries and requiring extensive travel by the entire Due Diligence Committee. The first element of analysis and evaluation is information on the legal, patrimonial and organizational structure of the company: they aim to obtain information on the shareholding structure and on the main activities of the seller. In this sense, the first data collected are identification data: name, registered office, registration in the commercial register, VAT number, tax code; Subsequently, the constituent as well as the memorandum of association, the shareholders` agreements, the articles of association and their amendments, then the functional ones such as the structure of the company, changes, extraordinary operations already carried out, the powers of the administrative organ, the identification of the members of the collegiate bodies, the powers, the duration, the remuneration and the slavish analysis of their work by the vision of the books of the corresponding meetings and the verification of the existence and functioning of supervisory bodies and general or special powers. A careful analysis of the structure cannot ignore the control of the correct compliance with the obligations of publication in the commercial register (filing of annual accounts, appointments, registration of powers, existence of the sole shareholder, existence of a management and coordination relationship in accordance with Article 2497 of the Civil Code, etc.). After submission of the list of requests, the documents will then be compiled by the seller and/or its legal advisor and made available to the buyer. In recent years, it has become increasingly common to convert documents created for due diligence purposes into electronic format and make them available either on data carriers or via an online database such as a virtual data room. The term “due diligence” can literally be translated from English as “due diligence”.

It is a procedure to identify and assess the “state of health” of a company, not only in terms of economic, financial and patrimonial strength, but also in terms of compliance and compliance with applicable laws by those who have led the company since its creation. This process is necessary if the company subject to future “due diligence” has a relationship with external parties who intend to be part of the corporate structure in any way, through the purchase of shares or simply a branch thereof, prior to the acquisition of “due diligence”. To evaluate the timeliness and convenience of the transaction, but also to determine the purchase price, it is more necessary than ever to determine the health of the “product” you want to buy; “International Due Diligence”. It is easier for an IP holder to exercise legal due diligence. It helps identify gaps or problems. It starts with correcting any gaps or problems. Legal status of due diligence consultants – Responsible consultants are bound to the client by a professional mandate/contract relationship with specific characteristics, especially in terms of skills and powers, but they will also work in an area in which they maintain relationships with external subjects (directors, employees of the company subject to the d.d., public services, etc.) who did not give them a mandate. This is a real “minefield”, and therefore, before accepting the order and commencing operations, the Due Diligence Committee must be informed of the existing relationship between the buyer and the seller and the latter`s desire to facilitate the operations and not hinder their work. Just as a legal due diligence investigation can help your business assess itself, legal due diligence can help you understand the value of another business.

Il potenziale acquirente vuole essere nella condizione di prendere una decisione consapevole e la “due diligence” risponde proprio a questa esigenza. Regardless of the form, the presentation of the results of the legal due diligence investigation should describe all documents reviewed, analyze the key issues identified, and make recommendations to address the issues presented. An exemplary initial document required for the seller or target company in an M&A transaction so that the acquirer`s advisor can conduct due diligence.