GHI Ltd. wants to acquire RST Ltd., the target company. Prepare a check list to undertake a preliminary study on the target company before taking over.

CS Professional · Secretarial Audit, Compliance Management and Due Diligence · PYQS · December 2021
GHI Ltd. wants to acquire RST Ltd., the target company. Prepare a check list to undertake a preliminary study on the target company before taking over.

Answer & Explanation:

Preliminary Examination of a target company include the following: The acquirer has to undertake a preliminary study on the target company, before taking for over a company. The following points may be considered- information has to be collected on Target Company and to be analyzed on financial and legal angle; Register of Members is to be examined to verify the profile of the shareholders; title of the target company with respect to immovable properties may be verified; financial statements of target company have to be examined; examination of Articles and Memorandum of Association of the Company; examination of charges created by the company; applicability of FEMA provisions if any relating to FDI has to be looked into; Deference between intrinsic value and market value Import and Export of technology, if any; Any specific know how (IPR) - Intellectual Property right. business prospects etc. The above list is not an exhaustive one and it varies depending on size of the nature of the company.

Topics: Due Diligence

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