Harper James advises ambitious start-ups, scale-ups and established companies on due diligence under the laws of England and Wales. Whether you are buying a company, raising investment or preparing for a sale, due diligence tests the business behind the headline numbers and identifies issues that affect price, structure and completion.
Start with a clear information request and timetable. Corporate due diligence should cover the group structure, articles of association, shareholder agreements, registers, cap table, historic allotments and Companies House filings. Commercial review covers key customer and supplier contracts, change-of-control provisions, exclusivity, termination rights, liability caps and recurring revenue commitments.
The review should also address employment contracts, incentive arrangements, pensions, intellectual property ownership, data protection, property, finance, litigation, tax and regulatory permissions. A focused request prevents management from spending time on documents that do not affect the transaction. See this practical due diligence resource for further guidance on organising the process and assessing legal risk.
Not every defect deserves the same response. Separate issues that affect valuation from those that need a completion condition, a specific indemnity, a warranty, an undertaking or a post-completion action. For example, an unassigned founder-created trade mark requires a different solution from a missing supplier signature or an outdated privacy notice.
Current reviews place greater emphasis on cyber security, data use, artificial intelligence governance, ownership of software and the quality of recurring revenue. Buyers also examine whether key customer contracts transfer on a sale and whether workers, contractors and consultants have assigned intellectual property correctly. These points often influence the share purchase agreement more than a long list of minor document gaps.
The seller normally provides a disclosure letter against warranties in the share purchase agreement. Good disclosure gives the buyer enough information to understand a risk, while warranties allocate responsibility for matters the buyer has not accepted. Specific indemnities address identified exposures, such as an employment claim, tax liability or disputed intellectual property ownership.
Before signing, prepare an issues list showing the finding, commercial impact, proposed protection, owner and deadline. After completion, record undertakings, Companies House filings, releases of security and any required contract notices. This turns due diligence from a document exercise into a decision-making process that supports price, structure and a controlled handover.