Lawyer due diligence report writing
Lawyer refers to the law to obtain a lawyer's practicing certificate, accept the entrustment or designation, for the parties to provide legal services to the practitioner. Here I have organized the lawyer due diligence report writing, welcome to read!
A lawyer due diligence
(a) the concept of lawyer due diligence
Lawyer due diligence refers to the issue of stock listing, mergers and acquisitions, major asset transfers, and other transactions in the transaction of the object of the transaction and the transaction matters of the legal matters. The client entrusts the lawyer in accordance with its professional guidelines, the prudent and appropriate investigation and analysis. It includes the lawyer to review the relevant information and legal evaluation, mainly for the query of the establishment of the target company, the survival of the state as well as its liabilities of a legal nature, which consists of a series of ongoing activities, not only involves the collection of information on the company, but also involves the lawyer how to use their expertise to find out, analyze and evaluate the relevant information.
Lawyers due diligence is with the development of China's market economy, open to the outside world as well as the gradual establishment and development of the capital market in the practice of lawyers is widely used, and has become one of the most important duties of lawyers in the capital operation activities. Lawyers due diligence in practice in a very wide range of applications, including large-scale acquisitions and mergers, stocks and bonds, public offering and listing, major asset transfers, venture capital and general large-scale project investment, in addition to the aforementioned capital operation, corporate guarantee services and bank loans and other corporate finance activities, clients and lawyers have gradually begun to carry out due diligence.
Lawyers due diligence in the practice of the relatively early application, but as a formal legal concept is in March 6, 2001, China Securities Regulatory Commission issued the "public offering of securities companies to disclose the compilation of the rules No. 12 - lawyers and lawyers legal opinions and work reports" (hereinafter referred to as "Rules"). Article 5 of the Rules provides that: ? The lawyer shall, in the lawyer's work report, set forth exhaustively and completely the due diligence performed, the basis for the opinions or conclusions expressed in the legal opinion, the process of conducting the relevant verification and validation, and the necessary information or documents involved? This is the first time in our country in the legal normative documents? Lawyer due diligence? this concept. However, the Rules do not give specific or basic working guidelines and norms for lawyers' due diligence, and within the lawyers' profession, there is also a lack of sufficient research on due diligence and a lack of basic working norms.
(2) the lawyer due diligence 's purpose
the lawyer due diligence investigation is mainly to review and determine the subject of the investigation to provide relevant information on the authenticity, accuracy and completeness; to assist the client to more fully understand the subject of the investigation of the organizational structure, assets and business property rights status and legal status; to find and Analyze the legal risks and problems of the subject of investigation, as well as the nature of the problem and the degree of risk; so that the client as far as possible to find out the subject of investigation and the transaction matters of the whole situation, so that the client can effectively make judgments and avoid the relevant risks and make decisions. For example, in mergers and acquisitions, the buyer's attorney due diligence is to enable the buyer to find out as much as possible about the shares or assets they want to buy all the circumstances. From the buyer's perspective, due diligence is also risk management. There are various risks inherent in mergers and acquisitions for buyers and their financiers, such as the accuracy of the target company's past financial books; whether the target company's key employees, suppliers and customers will remain after the merger; and whether there are any obligations that could cause the target company's operations or financial operations to fall apart. Thus, it is necessary for the buyer to remedy the information imbalance between the buyer and the seller by performing due diligence. Once the due diligence identifies the risks and legal issues, the buyer and seller can negotiate which risks and obligations should be borne by which party, and the buyer can decide under what conditions to proceed with the acquisition.
(C) the lawyer's due diligence process
The lawyer's due diligence has a wide range, the size of the subject of the investigation is also very different, from the private sector to multinational corporations, each due diligence project is unique. However, for each activity, the respective commissioned law firm due diligence due diligence should follow the same basic working procedures, as follows:
1, the commissioning party and the law firm signed the commissioning contract entrusted to the law firm to conduct due diligence investigation. 2, the lawyer and the target enterprise signed the "Due Diligence Confidentiality Agreement. 3, the lawyer drafted according to the commissioned business Due Diligence Checklist and Questionnaire. The due diligence checklist and questionnaire form are designed by the lawyer according to the needs. The main content of the due diligence checklist is the need for the target enterprise to provide all kinds of documents, generally include: the organizational structure of the enterprise documents; all kinds of assets of the enterprise's documents; all kinds of loans, financing documents; the enterprise's major contracts, agreements; the enterprise's business operations and the government involved in approvals or licenses; all kinds of tax documents; all kinds of insurance documents; the enterprise's employees' labor documents; the enterprise involved in all kinds of litigation, arbitration or disputes The various types of litigation, arbitration or dispute documents, etc. 4. After confirmation by the client, the lawyer will send the prepared due diligence checklist and questionnaire to the target enterprise. 5. After receiving the information provided by the target enterprise, the lawyer will check the copies and originals, make a good list of the information and prepare an index of the information, which will be signed by the representatives of the two parties. 6. The lawyer will conduct a study of the received information in accordance with the agreement of the contract of entrustment and report it to the client. 7. The information received by the lawyer to study and report to the client. 8, the lawyer on the information received by the research judgment, decide whether to draft again "due diligence checklist" or questionnaire, until the identification of the situation. 9, the lawyer on the due diligence investigation of all the information obtained, repeated research judgment, the corresponding verification verification, in the process of verification verification, production of the work of the transcript. 10, if the information is incomplete, the situation is not clear, the lawyer should ask the target enterprise to make a statement and the situation is not clear. The lawyer should ask the target enterprise to make a statement and guarantee.11. Organize and file all the documents and information, and formulate the working draft. The contents of the working draft include: the basic information of the project, including the name of the commissioning unit, the name of the project, the time and period of the production project, workload statistics; the formulation of the work program, plan and its operating procedures of the record; the client to provide copies of all documents, including but not limited to the client's establishment of the certificate of approval, business licenses, contracts, statutes, agreements, and other important documents and minutes of the meeting of the summary or copy; with the client and the relevant documents; the client and the relevant documents and records of the meeting of the summary or copy; and the client and the relevant documents and records of the meeting. copies; records of mutual communication with the client and relevant personnel, review of information provided by the client, records of investigation visits, correspondence, records of on-site inspections, lists of documents to be inspected, and other relevant information and detailed explanations; copies of written assurances or declarations issued by the client; explanations of reservations and doubts; and other relevant and important documents or information. The source of the above information shall be indicated. 12. The lawyer drafts and submits an accurate, complete and detailed due diligence report to the client.
Two, due diligence report drafting
Lawyers due diligence report is an important basis for the client to make decisions, therefore, lawyers should be drafted due diligence report objectively and comprehensively reflect the status of the target enterprise, and each judgment should be made on a clear and reliable basis. At the same time, the due diligence report should also focus on the legal issues and legal risks, especially on the tips of the legal risks, and the legal defects that can be solved to give legal rectification recommendations.
In general, lawyers carry out due diligence in the following five ways: 1, send a list of investigations to the target company, and ask the target company to provide relevant documents in accordance with the list of investigations; 2, participate in relevant meetings; 3, field visits; 4, visit the relevant departments and the formation of a visit to the transcripts; 5, to the relevant people to carry out inquiries and the formation of interrogation notes. After the above due diligence activities, lawyers for the entrusted matters to draft due diligence report, the due diligence report mainly includes the following aspects:
(a) the beginning of the part
due diligence report of the beginning of the part of the lawyers should be entrusted to the authorization of the matter and the scope of due diligence to be elaborated.
(b) the lawyer shall declare the documents provided by the client
The lawyer declares that the documents provided by the client are true, and copies of the submitted documents are consistent with their originals; the documents submitted by the relevant parties are legally authorized, signed and submitted; signatures, seals are true; all the facts of the client's statements, declarations, assurances are true, accurate and reliable. For true, accurate and reliable; and so on.
(3) body
The lawyer should be fully verified on the basis of verification, the commission to make a detailed and clear due diligence report. Its content mainly includes:
1, the establishment and survival of the target enterprise
Mainly for the shareholding structure, capital verification, the evolution of equity and other circumstances to explain, and for the legal evaluation of these matters, on the existence of irregularities and the existence of the risk of rectification recommendations.
2, organizational structure and corporate governance structure
mainly for the articles of association, corporate organizational structure, corporate governance structure (including shareholders' meeting, board of directors, supervisory board) to elaborate on the specifics of these matters, and for the existence of such matters of the legal issues and legal risk of legal evaluation, the existence of irregularities and the existence of the risk of the standardization proposals.
3. Business
The Company mainly elaborated on the scope and mode of operation of the Target Enterprise, the change of business, and the main business, and made legal evaluation and recommendations as to whether or not there are any legal impediments to or potential legal risks in the continued operation of the Target Enterprise.
4. Major properties
The main assets owned or used by the target enterprise are mainly elaborated. Evaluate whether there are any legal obstacles to the main assets and make recommendations to solve the legal obstacles.
5. Major debts and guarantees
Verification of the debts and guarantees of the target enterprise, and legal evaluation and legal advice on their legality and relevance.
6. Affiliated Relationships
Investigate whether there are affiliated transactions and investigate the controlling shareholders and other companies under their control, and elaborate on the situation of affiliates holding more than 5% of the shares, and analyze the existence of affiliations or other legal risks and put forward rectification proposals.
7, tax
Mainly for the target enterprise tax types, tax rates, and the existence of exemptions or reductions in tax items and tax payment, etc. to verify and make legal evaluation.
8. Litigation, arbitration and administrative penalties
Includes the elaboration of the litigation, arbitration and administrative penalties that the target enterprise, its senior management (chairman, general manager, etc.) or its affiliates have yet to be settled or are about to be faced with, as well as the legal analysis of the litigation and the provision of recommendations.
(4) The scope of use of due diligence reports
Attention should be paid to clarifying that the client and the relevant units authorized to use the attorney's due diligence report within the scope of the limit, if the use of the limited scope of the lawyer will not be responsible.
With the rapid development of China's economy, the capital operation of enterprises is also developing rapidly, and lawyers intervene in the capital operation due diligence more and more frequently. Therefore, lawyers must be prudent and appropriate investigation and analysis, and make objective and comprehensive due diligence report, so as to make the right decision for the enterprise to provide a strong legal reference.
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