Scroll Top

Corporate Compliance

legal due diligence indonesia

Legal Due Diligence in Indonesia

A legal due diligence is the process of collecting and assessing corporate documents and data to obtain a clear overview off all the associated legal risks of a target company.

The legal due diligence performed by our team of lawyers will check and confirm any legal liabilities for our clients, which may include among others:

  1. a review of all corporate licenses to confirm they are complete, fully updated and compliant;
  2. a check if there are no outstanding disputes or litigation cases; and
  3. a review of agreements with creditors and business partners.

The main goal of legal due diligence is to find any legal risks. Once all risks are mapped, our lawyers will analyses and asses the severity of the risks and prepare a recommendation to our client on how to mitigate these risks.

 

Three Phases of Legal Due Diligence

Phase 1: Preparation

During the preparation phase our team of lawyers will meet with our client to understand the exact reason for the due diligence request. Depending on the type of business transaction, we require a clear understanding on the goals of the transaction. This allows us to determine which information we require to investigate from the target company. In addition we can set priorities on the importance of the requested information. The preparation step is essential for us to determine the exact scope of the legal due diligence.

Phase 2: Investigation

Once the initial scope is determined, we move to the investigation phase, which is the most time-consuming phase. During this phase our team of lawyers, in cooperation with the corporate teams of the target company, collect a significant amount of documents and data. The complexity and duration of this phase mainly depends on the size of the target company and the complexity of the legal due diligence request.

Phase 3: Review

During the final phase of the process, our team will review and analyze all collected documents and date. Our team will confirm if there are compliance risks, contractual risks, disputes, and other legal risks. Our team may also require the target company to provide additional information based on the initial findings. Once all relevant documents and date are obtained and reviews, our firm will present our findings to our client and provide recommendations on how to mitigate risks or on whether the client should enter into the transaction or not.

Common documents which are reviewed

Corporate documents

  • Deed of Establishment
  • Amendments of the articles of association
  • Shareholder decisions/circulars
  • Decrees of Ministry of Law and Human Rights
  • Business License or any other approval or license
  • Capital Investment Activities Report
  • Land and office licenses
  • Manpower compliance documents

Litigation

  • Lien searches
  • Pending litigation
  • Judgments