Compliance Due Diligence in Germany
Company acquisitions and shareholdings can carry significant compliance risks, where even minor mistakes can result in serious financial and liability repercussions.
To prevent any adverse outcomes for all involved parties, purchasers should identify and efficiently manage compliance-related pitfalls both before and after M&A transactions.
Points to verify before a transaction
Relevant capital market transparency and publicity regulations should be adhered to in the lead-up to contract discussions to evade pre-contractual liability. Besides tax and financial risks, issues emerging from, for instance, a change in ownership structure post-transaction, also factor into such a review, along with all compliance-related matters that should already be on the target’s agenda due to the target’s risk-prone areas:
- Employee qualifications,
- Client base, business partners, suppliers,
- Authorization processes, monitoring, policies, reporting systems,
- The company’s finances, valuations, balance sheets, and taxes.
Key factors to consider also include:
- Employee qualifications,
- Client base, business partners, suppliers,
- Authorization processes, monitoring, policies, reporting systems,
- The company’s finances, valuations, balance sheets, and taxes.
Timely identification of liability risks
From the buyer’s viewpoint, any liability risks must be discovered and mitigated, especially as part of the ongoing due diligence process. At this stage, a compliance due diligence becomes beneficial to reveal potential uncertainties in past business operations that could impact the buyer following the transaction.
Managing a company’s sale with legal certainty
Sufficient measures must also be implemented on the seller’s side to safeguard confidential information and business secrets against unauthorized access.
Moreover, when formulating the purchase agreement, the list of guarantees and indemnities must also be crafted in line with the mutual interests of the parties involved from a compliance perspective.
Incorporating a new company into the compliance organization
Upon a successful M&A transaction, an efficient compliance organization should be established and maintained as part of the integration of the acquired company into the existing structures.
Our expert team assists you in all stages of the M&A transaction, particularly in avoiding liability risks and adhering to management due diligence obligations both in the planning and execution of M&A transactions.
Your attorney for compliance due diligence in Germany
Are you looking to buy or sell a company in Germany? Do you want to ensure that you are not held accountable for any mistakes in the transaction?
The most convenient way to reach your point of contact for all compliance matters is via e-mail (info@winheller.com) or phone (+49 69 76 75 77 85 30). We look forward to hearing from you and addressing your queries!
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