Share and Asset Acquisitions: Information to Prepare for Counsel

Describe what the buyer wants to acquire

Begin with the commercial objective: an interest in a company, a defined business, selected assets or another arrangement. Explain which people, customer relationships, rights and operating capabilities are important to that objective. A label such as business acquisition does not identify everything the buyer expects to receive. Counsel needs a sufficiently clear description before assessing the proposed structure and documentation.

Map the entities and the relevant assets

For a proposed share transaction, collect the ownership and entity records and identify existing shareholder arrangements. For an asset-focused transaction, prepare an inventory of the assets and the records supporting ownership or use. In either case, identify group companies and third parties involved in the business. Do not assume that an asset used by the target is owned by it or that a contractual relationship sits in the entity named in the initial proposal.

Identify contracts and operating dependencies

List material customer, supplier, property, finance, technology and licence arrangements. Flag provisions or facts the advisers may need to consider, including proposed changes to the business or parties. The treatment of consents and continuing obligations depends on the actual structure and documents. A statement that everything transfers automatically is not a suitable working assumption for a transaction plan.

Prepare people, IP and information records

Identify the personnel and intellectual property important to continuing operations. Prepare the relevant agreements and rights inventory and explain how business data is used and held. Flag gaps in records or ownership history. Different specialist reviews may be needed. Keeping these groups in separate indexed folders makes it easier to identify which adviser is considering each question and where additional information is needed.

Make a list of structure-dependent questions

Ask the advisers which aspects of the proposed structure affect documentation, approvals, transfer mechanics, financing, tax and transition arrangements. The preparation exercise does not select the legally or commercially preferable structure. Record the assumptions behind the current proposal and revisit them if the deal changes. A concern identified during diligence may affect price, timing, documentation or whether the parties proceed.

Plan the handover as well as signing

Create a proposed transition list covering access, records, contacts, ongoing services and responsibilities after completion. Identify tasks that depend on a counterparty or an external adviser. A fictional asset inventory might show a leased office, licensed software and customer contracts separately rather than grouping them as owned assets. This distinction helps frame questions for counsel but does not determine the legal treatment of any item.

Explain the intended perimeter of the transaction

Describe what the buyer expects to obtain and what the seller expects to retain. An asset transaction may require detailed identification of the proposed assets, contracts and other arrangements; a share transaction raises questions concerning the entity and its existing position. These are starting points for a transaction-specific review, not a rule that one structure always transfers or excludes a particular liability. The parties’ proposed documents and applicable requirements must be considered.

Separate diligence findings from transaction decisions

A finding should identify the source, issue and information still required. A transaction decision should record how the authorised commercial parties propose to address it after advice. Do not close a diligence item merely because drafting is underway. Track the connection between the finding, negotiation position and final agreement, and preserve matters requiring action after completion. This helps distinguish an accepted commercial position from an unresolved factual gap.

References

• Companies Act, 2013 — India Code

Related Insights

• Preparing a Data Room for Legal Due Diligence