Due diligence is where an agreed price becomes a real one. The list is long — corporate, contracts, property, employees, IP, litigation, licences, insurance — but in an owner-managed business it turns up the same handful of findings with remarkable consistency, all of which are findable in advance.
The Usual Findings
Key customers with no written contract, or contracts expired years ago and running on by habit. A lease with limited term remaining, or restrictions on assignment. IP, domains or software licences in an individual’s name rather than the company’s. Company registers and filings out of date. Employment terms never issued in writing, or contractor arrangements that look a good deal like employment. Shareholder arrangements agreed verbally years ago. Personal guarantees the owner had forgotten. And change-of-control clauses nobody knew were there. Each finding does one of three things, and all three move value from seller to buyer: the price drops, a retention or indemnity appears, or the warranties expand so that the seller personally stands behind something that could not be verified.
Preparation, and the Counterintuitive Part
Assemble the material before going to market, not in response to a request list under time pressure inside an exclusivity period: constitution, register and filings current; written contracts with key customers and suppliers; the lease read properly with assignment provisions identified; written employment terms; confirmation that IP, domains and licences sit with the company; a schedule of guarantees, charges and finance arrangements. Then the part sellers resist: volunteer the problems. Raising a known issue yourself is a materially stronger position than having it found — it changes the tone of the entire exercise, and it matters technically, because a matter properly disclosed is generally carved out of the warranties while a matter not disclosed is one you have effectively warranted against. On confidentiality, which is a genuine concern where the buyer is a competitor: stage the disclosure. Less sensitive material first; customer-by-customer detail and margins only when the deal is advanced. And make sure the NDA restricts use, covers the buyer’s advisers and funders, and prevents solicitation of your staff and customers.
A buyer who finds nothing gets suspicious, not reassured. Clean files that unravel late produce worse outcomes than honest ones that were flagged early.
Want to know what they will find? Readiness check, or 01 5827148.
Richard O’Shea — Solicitor & TEP
Solicitor at Mary Molloy Solicitors, established 1981, and a TEP of the Society of Trust and Estate Practitioners. The firm acts for buyers and sellers on business sales and acquisitions — structure, heads of terms, due diligence, the sale agreement, warranties and disclosure, completion and what follows it. Because a substantial share of Irish business sales are retirement exits, the firm’s estate and succession practice sits alongside the transactional work: the deal and what happens to the proceeds are usually the same client’s problem. Nothing here is tax advice — structure is tax-driven and that belongs with your accountant and Revenue, before heads of terms are signed. 01 5827148 · richardoshea@marymolloysolicitors.com · LinkedIn
General information, not legal advice. This website contains general information about Irish law on business sales and acquisitions. It is not legal advice and does not create a solicitor—client relationship. Every transaction turns on its own facts — the structure, the documents, the parties, the consents required — and advice on yours requires a consultation.
Nothing here is tax advice, and tax drives structure. The choice between an asset sale and a share sale is very largely a tax question, and it should be settled with your accountant or tax adviser, and by reference to Revenue’s own guidance, before heads of terms are signed rather than afterwards. This firm does not advise on tax, does not state rates, thresholds, reliefs or conditions, and does not indicate any tax outcome.
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