What factors should be considered in the process of acquiring property for development due diligence?

Due diligence of merger and acquisition refers to a series of investigations on the overall financial operation of the target company before the merger and acquisition transaction. Due diligence is of great significance for designing transaction structure, determining transaction price and preventing transaction risks. Due Diligence Content The basic purpose of due diligence of M&A exhibition acquisition service is to prevent transaction risks. Generally speaking, due diligence includes the following contents: (1) the subject status and shareholder status of the target company. This survey mainly determines whether the target company exists and its basic situation. Matters involved: 1) Company's main body: including the company's business scope, registration authority, establishment, business license, company tax registration certificate, household registration certificate, company inspection records, etc. 2) Organizational structure and rules of procedure of the company: including articles of association and amendments, resolutions of the board of directors and shareholders 3) Shareholders and ownership of the company: Our company stipulates that the original shareholders of the equity transfer company have priority in the equity transfer. I met a case in which the acquisition of the target company failed because the shareholders maliciously exercised their priority. It is important to explain whether the shareholder structure and shareholders' rights and interests are pledged, or whether their forms provide guarantees for mergers and acquisitions. 4) Investment outside the company and establishment of the company: Understanding the establishment of the company or its shares or the establishment of the company or representative office is helpful to evaluate the company's market. Channel operation risk (II) The production, equipment and property of the target company are 1) The value products produced by the company generally include the land use right and the main property rights of buildings, such as ownership, lease right, mortgage right and sealing right. 2) Important machinery and equipment: According to the target company of family business, the advanced degree of machinery and equipment can basically depend on the technical level of the parent company, which determines the value of the target company to some extent. Pay attention to the ownership of machinery and equipment and look at the sales contract. Shopping invoices, etc. 3) The company has equity: it only helps to judge the value of the target company and help the target company expand its business. 3) Before intellectual property rights, intellectual economy replaced intellectual property rights, which is particularly important for companies to acquire intellectual property rights. Intellectual property investigation should attract enough attention. 1) pending patents and patent applications: special invention patents reflect the scientific and technological content and innovation degree of the target company. Patents mainly look at patent certificates. 2) Trademarks: Trademarks are aimed at the company logos and the collective market influence. See the trademark registration certificate for the current trademark. 3) Copyright: Copyright is very important in industry or game industry. 4) Trade secrets: Due diligence and prediction of trade secrets can really keep enterprises competitive. 5) Intellectual property licensing: including the investigation of the intellectual property rights of the target company; Investigation on whether intellectual property rights are allowed to be used; Whether there are defects in intellectual property rights, such as pledge, custody, seizure, etc. 6) The protection of intellectual property rights by the target company: whether there is a confidentiality agreement or cooperation with employees, whether there is an agreement with employees on the ownership of intellectual property rights, etc. (4) Important contracts The target company signs some important contracts that affect the company's development. The target company's business channels and market resources include goods sales, China, investment, management services, packaging, R&D contracts, and according to the importance of the target company's operation, it includes: 1) intellectual property transfer or agreements on patents, trademarks and copyright licensing agreements. 2) Sign cooperation agreements and continuous supply agreements with suppliers and manufacturers. The raw materials of the target company mainly come from suppliers. The supply contracts between the target company and several raw material suppliers are extremely important. Raw material suppliers decide to distribute the products of the target company after the death of the enterprise. The distribution contract between the target company and the distributor determines the sales channel of the target company. 3) The company's rights are restricted. Some contracts stipulate that the equity transfer or acquisition of the target company shall be terminated accordingly. Some loan contracts stipulate that if the company's holding changes, it will be borrowed. Acceleration period, etc. 4) Joint venture contracts or some cooperation agreements 5) Contracts with affiliated companies: The contracts with affiliated companies can make the target company be controlled by the target company even if it obtains the controlling stake; 5) The company's debt and the creditor's rights and debts of the guaranteed target company determine the purchase price to a certain extent; Seed guarantee or debt can break out, leading to the enterprise's demise. 65,438+0) Various loan agreements signed by companies and banks. 2) Companies signed with their companies or by themselves. Various loan agreements: the company is short of funds and the bank can lend. 3) The company's customers or suppliers owe money. 4) The company signs various guarantee agreements, including the company's own debt guarantee agreement, including providing guarantee. It is particularly important to note that the company may lose tens of millions or even hundreds of millions by providing guarantee and seal. (6) With the implementation of the labor contract, the labor situation becomes more and more important. The problem can directly determine the labor investigation that the enterprise has not carried out, mainly including the following aspects: 1) The number of employees and post arrangement, including the name, salary, position, employment period and vacation of employees who have signed or have not signed labor contracts, which is particularly serious. 2) Labor contracts and signing conditions: labor contracts signed with employees and their contents, unsigned labor contracts, and original conditions, including the signing period and renewal of labor contracts. According to the new labor law, unsigned labor contracts require double salary compensation, and unsigned employees sign fixed-term labor contracts. 3) Pay social insurance and housing accumulation fund for employees: Social insurance includes endowment insurance, medical insurance, career insurance and work injury insurance, and the housing accumulation fund is underpaid. See comparison of survival history. The company's underpaid and underpaid social insurance premiums can reach tens of millions. I have been in contact with equity acquisition projects and found that the target company missed or underpaid tens of millions of social insurance premiums. Consider giving up the acquisition because it is risky. 4) Special workers of the target company: mainly workers with work-related injuries. The acquisition of occupational disease patients is a heavy burden, and due diligence should be paid attention to. 5) The target company signs contracts with senior managers and special talents: service period agreement, non-competition agreement, confidentiality agreement, stock option arrangement and profit enjoyment plan, etc. 6) Work situation: The status of industrial companies is stronger, and the role of labor relations is more important. Need to know the organization and operation mode of the target company. 7) Company rules and regulations such as employee handbook are more important. The implementation of new "labor" depends on employee management. 8) Signing and performance of collective contracts. 9) The company's labor outsourcing and labor dispatch: Labor outsourcing or labor dispatch is widely used. Need to know the situation of labor outsourcing and labor dispatch (VII) environmental issues. Environmental problem is a problem of sustainable development. People tend to pay attention to production enterprises, especially important enterprises. Emission standards can directly lead to the closure of enterprises. Specifically, it mainly includes: 1) various emission inspection records of the target company: mainly to understand whether the emission standards meet the national standards and norms. 2) Environmental protection devices of the target company: sewage discharge system, gas pollution detection system, etc. 3) Penalties and suggestions of the environmental protection department: whether the business process of the target company is subject to administrative punishment, whether there is any change, and whether the environmental protection department has any suggestions or plans for the environmental protection of the target company. 4) Records of hazardous waste discharge and disposal of the target company, self-disposal and description of waste, self-disposal of waste incinerator, installation certificate of wastewater treatment facilities, etc. 5) Litigation related to environmental pollution: Environmental pollution litigation is the same as economic litigation. The fate of the enterprise. I have dealt with complaints from people near the factory about environmental noise pollution, which led to the suspension of production and rectification of enterprises. (8) Tax issues. Whether the tax status of the target company belongs to tax exemption or tax evasion, and whether it enjoys tax preference or not, all are concerned about the value of M&A.. 1) Taxes and tax rates applicable to the company at present, indicating the taxes that must be considered in mergers and acquisitions such as value-added tax, business tax and stamp duty. Special mergers and acquisitions are in the same industry as the target company, with special attention. 2) the company's tax payment certificate, whether the company owes taxes. Whether the target company pays taxes in full, whether it owes taxes or evades taxes; 3) Details of preferential tax treatment enjoyed by the target company and relevant approval documents or certificates of tax reduction or exemption enjoyed by the target company. Compared with high-tech innovative enterprises, the industry to which the target company belongs can enjoy tax refund, etc. 4) Whether the target company is subject to administrative punishment by the tax authorities, etc. (9) The information system of the target company is now an information society, and enterprise management plays a more important role in the information management system of the target company. 8+0) Information infrastructure structure and description of the target company 2) Hardware equipment list and description of purchase period, model and function. 3) Software list and descriptions of software purchase cycle, model, function and sales service system. 4) Relevant information technology contracts and text agreements, sales service agreements, instructions for use, etc. (10) Litigation and arbitration involving the target company can directly affect the operation and production of the target company. Litigation or arbitration can affect the economic losses of the target company. Litigation arbitration investigation can mainly include: 1) list of effective arbitration or litigation cases. Focus on the analysis of case types and the impact on the target company. 2) In litigation or arbitration, due to its determination, it should be judged that the output is higher. The dispute over intellectual property rights of nuclear technology in scientific and technological enterprises determines the value of enterprises. 3) Any violation of laws, regulations or contract details or its infringement is known to cause arbitration or litigation. Due Diligence Type What target companies should M&A consider when conducting due diligence? Due diligence type M&A needs the cooperation of the target company to complete. In order to protect business secrets, the target company always wants to know as much as possible about the information of the target company, and always provides M&A with as little information as possible or makes the acquirer suffer. Due diligence type: (1) Due diligence list is provided to the target company according to the target company, and it should be listed according to the specific characteristics of the acquired project and the target company concerned, and the due diligence list should be as few as a few pages. Then dozens or even hundreds of pages of the target company can provide the materials in the due diligence list, and can refuse to provide materials to the target company. It is necessary to judge its authenticity and legal risks. It is required to explain its progress by refusing to provide materials, and it is necessary to analyze its original understanding and hidden risks. (2) Investigate the relevant government departments or enterprises of the target company, find out the shareholders of the target company or their articles of association, and register the shareholders, capital, articles of association and their changes. The inspection data can be understood from the industrial and commercial registration department. The environmental problems faced by the company can be inquired through the environmental protection department whether it is subject to administrative punishment for violating environmental protection or whether the preliminary construction has been reviewed by the environmental protection department. The tax department can inquire whether there are tax evasion, tax evasion and administrative punishment. The insurance status of labor intermediary can be inquired about employment registration and social insurance premium payment through the labor and social security department. Involving land use rights. Housing property rights, etc. Go to the real estate department to inquire about its ownership, mortgage and seizure. Inquire about the ownership and pledge of the equity of the target company from the securities registration and settlement department or the administrative department for industry and commerce, and make a summary solution through its customers. (3) Solve the management, existence and development problems of the information company of the target company, and always leave a mark on the public. (4) Report the advertisement of the target company to the target company of Zhongzhan Media. (4) Conduct actual investigations on employees, conduct interviews and due diligence to resolve the risks of mergers and acquisitions. The design of M&A transaction mode, the adoption of equity transfer and the adoption of asset acquisition all play an important role and should attract my attention. Due diligence on M&A is a complicated work, involving legal issues. This paper introduces the basic content of due diligence based on my experience in handling cases. Authors: Lawyer Zhu Hui (partner of Shihai Tonggan Law Firm) and Lawyer Chen Huiying (managing partner of Shihai Tonggan Law Firm).