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Legal documents for due diligence are documents that lawyers look over as part of a procedure to discover relevant information prior to the conclusion of a transaction. They are a mandatory requirement for any company which is contemplating merging with another company or acquiring stakes in other businesses, real estate or intellectual property. Certain of these documents are accessible immediately, while others, such as audited financial statements or tax records might take time to compile. In addition to the normal documents, a rising number laws require companies to document various issues, such as human rights and modern slavery as well as transparency of beneficial ownership.

A well-run legal due diligence process is an opportunity for a business to identify potential risks and liabilities, and create strategies to reduce these. It is also an opportunity for companies to evaluate their own value and ensure that they are doing their best in any negotiations with potential buyers, investors, or partners.

As the legal environment for M&A is constantly changing the legal landscape for M&A is changing. It is becoming more common for companies to seek additional protection via a process known as representations and warranties liability insurance, which can cover costs in the case that any misrepresentations were made and later proved untrue. Conducting an effective legal due diligence will minimize the risk of unintentional legal liabilities following the closing of a deal. A thorough and well-documented checklist is a crucial step to achieving this.

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