DUE DILIGENCE IN NIGERIA
Due Diligence is the level of care or judgment put into a particular circumstance. Legal due diligence in Nigeria is more of a process that involves collecting, understanding and assessing all legal risks, carried out on a target company.
Legal due diligence is necessary when conducting a business transaction, investments, or purchase of landed or commercial properties. This can be done by proper review, investigation and carrying out a
Legal Due Diligence in Corporate Matters
Corporate legal refers to the process of investigating companies in advance of joint partnership, sales, mergers and acquisitions by gaining an
Legal due diligence may also entail investigating the corporate legal status of a targeted company with the Nigerian Corporate Affairs Commission (CAC). In this regard, a manual search, which will reveal the due incorporation of the company, names of directors, names of shareholders and whether any charges are registered on the company will be conducted on the targeted company at the CAC.
Generally, the main purpose of due diligence is to carry out a
Benefits of conducting legal due diligence
It is important for investors to conduct legal due diligence on a Nigerian company before involving in any mergers, acquisitions, takeovers or other transactions with any company. The benefits of conducting due diligence on the company
If a company is involved in a significant transaction, such as business combinations, securing any credit facility or public offering of shares, then due diligence is significant to such transaction.
Steps of Corporate Due Diligence
Legal Due Diligence involves but limited to the following steps:
Legal due diligence is necessary before corporate transactions with a third party. The idea behind the investigation carried out in the corporate field especially in matters relating to contracts, mergers and acquisition in other to understand if there will be any future legal problems as a result of such transaction. Due diligence is very necessary for a corporate- commercial related fields, as it helps to identify various obstacles, risk and potential solutions.
Finally, it is important to understand that a conventional due diligence involves 3 main levels that cut deeper into the investigation of the targeted entities as it progresses. While level may involve merely conducting a search at necessary places in respect of the targeted company or entity; level 2 involves scrutinizing corporate entity through global and local media; and level 3 involves direct investigation, scrutinizing public records or data coupled together with physical visitation of any necessary and required places.
Written by Corporate & Commercial Law Department at Resolution Law Firm. The Firm has engaged in carrying out due diligence on behalf of various local and foreign companies seeking to do business in Nigeria