Share your needs with us, get contacted by law firms.
Free. Takes 2 min.
Free Consultation: 1 hour
Due Diligence in Abu Dhabi, United Arab Emirates, is considered an obligation by an individual or organization to carry out a careful, meticulous, assessment of any matter at hand. Due Diligence is most commonly required in various business dealings, such as mergers and acquisitions, establishing partnerships, public listings of companies, or engaging in joint ventures. It's all about understanding the risks associated with these transactions. The laws in Abu Dhabi are thorough and align with international standards ensuring that Due Diligence is carried out under strict regulatory compliance.
Many scenarios may dictate the need of a lawyer's involvement for Due Diligence. Legal professionals can vet contractual agreements, verify the legitimacy of businesses, ensure regulatory compliance, and identify potential legal glitches that could lead to future disputes. A lawyer's role is especially critical in scrutinizing financial statements, assets, liabilities and evaluating the overall growth potential and health of businesses. Lawyers will also hold key knowledge regarding Abu Dhabi regional laws and compliance that are integral for Due Diligence.
Abu Dhabi follows the UAE Federal Law No. 2 of 2015 on Commercial Companies, which details all regulations related to business-related transactions such as Mergers and Acquisitions (M&A), making it a key aspect in local due diligence. The law warrants full disclosure of all necessary information between the transacting parties. Abu Dhabi Global Market (ADGM) laws and regulations, along with the UAE Anti-Money Laundering and Combating Financing Terrorism laws, are other crucial legal frameworks that guide due diligence within the region. The UAE Civil Transaction Code is another important law in this field, setting provisions and legal guidelines for contracts and agreements.
The purpose is to inspect the business you are planning to invest in or partner with. It involves reviewing legal, financial, compliance, operations, and other aspects of your prospective business venture.
The duration varies depending on the complexity of the business and transaction. It could range from a few weeks to several months.
Without Due Diligence, you could risk investing in a financially unstable, legally tangled, or otherwise high-risk business. This could lead to substantial financial losses and legal liabilities.
While it's possible to conduct Due Diligence without a lawyer, it's not advisable due to the intricate legal aspects involved that require expert knowledge and understanding.
A Due Diligence checklist typically contains financial analysis, legal structure examination, investigation of all contracts and commitments, verification of tax obligations, checking employment and labor conditions, and inspection of regulatory compliance.
Although not obligatory, conducting Due Diligence is highly recommended before entering any sizable business transactions to avoid legal and financial pitfalls.
Documents like financial reports, list of assets and liabilities, tax returns, client and supplier contracts, and corporate legal documents are needed during a typical Due Diligence process.
While there may not be direct penalties for skipping Due Diligence, it could indirectly lead to breaches of regulations, resulting in heavy fines and legal actions.
The cost varies widely based on the complexity of the case, expertise of the lawyer, and duration of the process.
Though Due Diligence can significantly decrease the risk, it cannot guarantee a successful deal or prevent all potential future issues.
Abu Dhabi Global Market (ADGM) would be a resourceful place for regulations and guidelines. UAE government's official portal can provide comprehensive details about commercial laws and penalties if any. Local law firms and legal consultancies are also helpful resources for obtaining legal advice in this field.
If you require legal assistance in Due Diligence, the next step would be to consult with a local legal expert or firm specializing in commercial law and transactions. They can provide you with personalized advice, guidance, and services tailored to your specific situation. Preparing all relevant business documents and information would be crucial to facilitate a smooth Due Diligence process.
