Business and asset sale due diligence checklist in Zimbabwe

A useful starting point for parties entering into a business and asset sale in terms of which a Purchaser purchases a business and the trading assets of a company from the Seller for a consideration, is for the parties and/or their representatives to have a tailor made checklist to help with the transaction.

During the negotiating stages for such a transaction it is not unusual for the parties to sign a Non – Disclosure Agreement (NDA) in terms of which certain documents are then exchanged to prepare for the transaction.

The initial documents are usually the following, but not limited to:

• Articles of Association;
• Annual Returns;
• Certificate of Incorporation;
• Memorandum of Association;
• List of Directors and Secretaries/Principal Officers
• Share Certificate;
• Share Register.

As indicated above, each transaction should have a tailor made checklist. The essential features of a business and asset sale due diligence checklist in Zimbabwe include but are not limited to:

• (a) Accounting records;
• (b) Asset inventory and title to assets;
• (c) Contracts;
• (d) Currency exchange control;
• (e) Competition (antitrust) law;
• (f) Environmental law;
• (g) Employment and labour law issues;
• (h) Leases;
• (i) Litigation;
• (j) Organizational structure of the business;
• (k) Organizational restrictions and/or limitations;
• (l) Insurance of assets;
• (m) Intellectual property;
• (n) Tax liabilities;
• (o) Title to assets;
• (p) Valuation of the business and basis of such value.