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If you wish to discuss the due diligence process with a member of our corporate team in more detail, please contact them today to discuss how we can assist you and your company on:
HMRC recently confirmed that an estimated £4.5 billion in Covid Support has been lost by fraud or error and that it is expected to recover £1.1 billion by September 2023. The misuse of Covid Support will continue to be an area of focus for the Government and HMRC.
Any corporate business acquisition should, as a matter of course, be subject to detailed legal, financial and commercial due diligence, but these recent announcements throw particular light on a new area of legal and tax due diligence - the misuse of Covid support.
Due diligence is gathering information about a company’s commercial, financial and legal set-up. On any significant proposed acquisition of a company’s shares or assets, the prospective buyer will arrange (via solicitors/accountants) to obtain and review sufficient information about the target company to form a view on the relevant matters before purchasing a company.
Usually, legal due diligence will aim to establish the key areas affecting the target company relating to its legal obligations and liabilities that the buyer will potentially be acquiring. Legal due diligence will typically focus on the following areas:
It can be important to have discussions with your solicitor and accountant regarding the scope and extent of the due diligence process before beginning it. Points which should ideally be established during the discussions are:
When acquiring a company, it is important to run an effective due diligence process. This will ensure that the target company’s accounts, tax and business status are understood, and if there are any liabilities which arise, they can be properly accounted for in the share purchase agreement before purchasing the target company.
Also, an effective due diligence process can allow a buyer and the buyer’s solicitor to raise relevant and productive further enquiries to ensure that the buyer has the necessary information before completion.
If you wish to discuss the due diligence process with a member of our corporate team in more detail, please contact them today to discuss how we can assist you and your company on: