May 20, 2016

Korean M & A Due Diligence Checklist: Mergers & Acquisitions in Korea

This Korean Merger & Acquisition Due Diligence Checklist is not a substitute for retaining an attorney to assist with your M & A.  Please, only, use this checklist as an initial guide and to insure that your attorney is checking off all of the boxes.  

Korean companies often are, often, very poor at keeping accurate records that reflect a rational reality.  Thus you must know where to find the red flags.  This skills comes with experience in Korea. We do work, also, in China. The flags are found in different places in Korea, than, in China and in the West.

M & A Due Diligence Checklist
  • Company History
    • Company History/Background
    • Founder, Family & Key Individuals in Company
    • Historical Profitability
    • Credit Rating
    • Primary Customers, Suppliers & Vendors
    • Reason for Sale or Merger
    • Stinky Fish & Stinky People
    • Old Hats
  • Financials & Shareholder Distributions
    • Audited Financial Statements
    • Tax Returns, Tax Certificates, Tax Filings & VAT Receipts etc.
    • Government Filings, Government Notices and Tax Office Communications
    • Local Taxes & Communications
    • 4 Insurances
    • Cash Flow, Current Financials & Year End Statements
    • Shareholder Distributions
    • Interested Transactions
  • Company Formation Documents
    • Business Licenses, Tax License & Commercial Register
    • Articles/Constitution, By-laws, Amendments etc.
    • Shareholder Agreements/Joint Venture Agreements
    • Government Approvals & Certificates
    • Interested Directors, Officers, Share Holdings
    • Representative Director & Directors Acceptance Documents
    • Formation Docs
    • Insurance Contracts
    • Seal Certificate
  • Assets & Receivables
    • Receivables List & Records
    • Real Property List & Records
    • Movables List & Records
    • IP (trademark, patents, copyrights, licenses etc.)
    • Registration documents for IP
  • Liabilities & Lawsuits
    • Lawsuits & Administrative Actions
    • Government Liabilities
    • Loans & Guarantees
    • Interested Transactions
    • Licenses
    • Contingents
    • Liabilities to Shareholders, Employees, Family & Directors
  •  Customers & Relationships
    • Major Customers
    • Agreements & POAs
    • Customer & Vendor Relationship Issues
    • Customer Relationship with Key Employees Leaving
  • Employee/Directors
    • Employee List
    • Job Specs
    • Employment Contracts
    • Government Obligations
    • Severance Obligations
    • Director Contracts
    • Former Director List
    • Employees Terminated in Last Year
    • Independent Contractor Contracts
    • Employment Related Tax Obligations
    • Labor Union Representatives/Union
    • Disciplinary Dismissals
  • Real Property
    • Title, Lease, Property Records
    • Adjoining Landowners
    • Tax Assessment
    • Mortgages, Liens & Encumbrances etc.
Please search for other articles we have written on Due Diligence and Mergers in Korea via the labels to the right.
___
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He is ranked, for Korea, as one of only two non-Korean attorneys as a Top Attorney by AsiaLaw.