Research On Lawyer Due Diligence In Corporate Mergers And Acquisitions

With the rapid development of the commercial society,more and more enterprises choose to expand their strategies through mergers and acquisitions.The transactions between enterprises are increasingly close,and legal risks are emerging.Whether as a merger or a target company,they hope to improve.The success rate of mergers and acquisitions is in an invincible position.To grasp the main risks in the transaction and find effective countermeasures,lawyer due diligence becomes an essential and important task.Due diligence originated from the Anglo-American legal system countries,which has a history of due diligence for many years.However,domestic due diligence still has a certain gap compared with western developed countries,which mainly scattered in the regulations of various departments.At this stage,there are only industry norms and guidance documents of lawyer due diligence.There are no specific legal provisions,but a large number of M&A transactions are constantly occurring in the capital market every day.Therefore,this situation puts high demands on lawyers in practice.Lawyers need to accumulate experience in a large number of practices,continuously summarizing the operation,clarifying the difficulties and key points of mergers and acquisitions due diligence,actively fulfilling their responsibilities,and constantly improving their business level in practice.Due diligence refers to the reasonable discernment,prudence,and decision that a person needs to do to some extent in a given situation.Its English meaning is “appropriate or due diligence”.Due diligence solves the problem of unequal information between the two parties.Through an in-depth investigation,the legal risk of mergers and acquisitions can be reduced as much as possible.There are many types of due diligence,and common types include legal due diligence,financial due diligence,tax due diligence,technical due diligence,and so on.This paper focuses on the due diligence of lawyers in the mergers and acquisitions business.In the first part,we briefly introduce lawyer's practice responsibilities in the due diligence of corporate mergers and acquisition.This section summarizes the professional norms and responsibilities of lawyer due diligence,explains the review duties of lawyers in mergers and acquisitions due diligence from the perspective of key content.In the second part,we focus on the overview of the lawyer due diligence of corporate mergers and acquisitions,the main issues,the practice risks,with two cases to illustrate.The third part points out the basic principles to be followed by lawyer due diligence.The basic principles to be followed by lawyers in due diligence are: the principle of prudence,the principle of materiality,the principle of independence,the principle of confidentiality,the principle of purpose and the principle of order.The principle of due diligence is the due meaning of due diligence,it's the primary principle of due diligence.After introducing the basic principles of lawyer due diligence,the fourth part of this article further elaborates on the main content and review points of the due diligence of corporate mergers and acquisitions lawyers,mainly from the basic information of the target company,historical evolution,corporate compliance documents,major claims and debts,the target company's contract,litigation,arbitration or administrative punishment,related party transactions,human resources,business and product sales are discussed from several angles.Among them,the focus is on the basic documents of the company,major claims and debts,and the contract of the target company.Focus of the investigation process,the articles of association of the company are an important clue to the lawyer due diligence in mergers and acquisitions of the company.As a key to opening the target company,fully understanding and mastering the articles of association and relevant documents of the target company will be of great benefit to the lawyer due diligence.