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The due diligence before buying an existing mainland company

Hi,

I am looking to buy a 15% stake in an existing active company (mainland). What is the due diligence which I must do to ensure I am not scammed?

What are the legal and economic aspects I should be aware of?

Kindly assist me.

Thanks in advance!

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Elnaggar & Partners
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17 May 2021, 08:31

As per the economic aspects, you should be aware of the market state and the company movements during the next year, you should make sure that the company is on the right track.

As per the legal aspects, we advise you to draft this agreement through a law firm and to negotiate every single term in this regard and to understand it very well, stacks are risky and always subject to loss.

Therefore, kindly feel free to send the relevant documents and your vision about the matter on my email and I will discuss it with you.

Avrio Legal Group
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17 May 2021, 15:57

Hello,

In such cases, a hands-on approach towards due diligence is imperative. A thorough examination of the company's legal standing and commercial responsibilities must be studied.

Based on this, we will be able to determine whether or not the existing liabilities of the company override the potential benefit of owning shares.

Additionally, should you approve of the company's current standing, a partnership agreement must be executed to implement your rights.

For further information, please contact us via email.

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