In Indonesia, many businesses appoint a legal consultant to perform due diligence to evaluate another business that the buyer intends to invest in or collaborate with.
Due diligence may also be a legal requirement when it comes to certain transactions to protect the rights and interests of the transaction parties.
On top of that, due diligence can be conducted to evaluate the commercial opportunities and to establish the assets and liabilities.
Often, a professional due diligence involves collecting critical background information and facts of a company or a transaction.
The results of the due diligence will be utilised for buyers or investors to make a decision for their prospective investment or partnership.
Legal due diligence in Indonesia is conducted by taking into account the essentials, which will be discussed in this article.
Comprehensive Due Diligence Investigation
When carrying out legal due diligence, the process must be thorough and meticulous. The entire procedure must include the investigation of the company’s documents, structure, financial conditions.
Important company’s documents to be checked include the articles of association, shareholders’ list, organisational structure, deed of Incorporation, among many others.
The legal consultant you appoint for the due diligence must be able to scrutinise various company activities, meeting procedures and appointment of commissioners and directors. Statements from directors and commissioners must be obtained as well.
In need of a resident director or a resident commissioner? Check out our local nominee services!
Agreements & Licenses
Legal due diligence should also involve the examination of the company’s agreements signed with third parties. The signed agreements must be inspected for their validity and their compliance with the current laws and regulations.
When it comes to licenses, licenses, permits and approval relevant to the company’s business activities must also be reviewed when conducting the due diligence.
These business activities encompass property and asset ownership, environmental management, and other investment activities.
Insurance Coverage for Assets
A professional legal consultant of due diligence will also check the assets of the company and determine if these assets are insured. It also involves the analysis of the potential circumstances and impacts if there aren’t any insurance.
Staff, Professionals and Other Workers
Last but not least, a competent legal consultant will go through the company documents with regard to its employees and personnel during the due diligence process. This is the last step of the due diligence but it is considered significantly important.
The inspection is done to ensure that there are positive and harmonious relationships between employees and employers as well as between one employee and another. The documents should be examined in this step include employment contract, payroll processing, and work hours and more.
Cekindo as Your Due Diligence Partner in Indonesia
Due diligence is a critical process by which all the details related to making a business decision comes to light.
Cekindo’s due diligence service investigates the background information, potential risks and opportunities of an investment you want to commit or a partner you wish to work with – so that you can make a more informed decision for a successful transaction.
Our competent and licensed team at Cekindo can enhance your probability of success substantially through due diligence by recognising your business objectives and developing professionally effective strategies.
Cekindo will transparently communicate and record all findings and discovery of a potential partner or an investment you will engage with. Contact us to know more.