top of page

Cyprus Company Legal Due Diligence Exercise

Prior to entry in a transaction, be it a joint venture, merger or acquisition of a target company, or entry into a major contract, the buyer or investor normally undertakes a limited legal due diligence to ascertain reliable information that will allow them to determine the current legal status of the company in question.

Such legal due diligence exercise subsequently offers the buyer the chance to assess any legal risks concerning the target and its assets, before completing the transaction. The exercise is carried out as part of reasonable care during business, with a due diligence check that involves careful investigation of the legal circumstances of a business.

The type of due diligence which may be appropriate will depend on the situation, business transactions and the level of risk involved. It is undoubtedly an important business method to consider prior to any vital decision-making or acquisition of a Cyprus entity to avail of any unpleasant surprises and liabilities in the future.

In the Digital Age the use of appropriate, cutting-edge technology should be employed to automate certain parts of the due diligence checks to ensure risk monitoring. Initially a questionnaire may be completed directly by the target company as regards details of the company, shareholders, beneficiaries, group structure, and members of the board. Subsequently, formal supporting documents and agreements are also normally requested and provided by the target entity to be assessed accordingly.

The lawyers who undertake the legal due diligence upon completing and assessing all necessary checks will issue a due diligence report providing a detailed summary to the interested party, subject to the scope of the report requested. This should normally identify any legal risks affecting the rights or obligations of the target including, but not limited to, ownership of assets, employment disputes, ongoing litigation, intellectual property and customer agreements.

Our law firm performs from a Cyprus legal perspective the requested scope of work in connection with proposed acquisitions of targets or entry into major contracts and delivers a legal due diligence report with respect to the transaction in order for the interested party to carefully review their investment decision.

Disclaimer: This article is intended for informational purposes only and should not be construed as legal advice. For specific legal guidance on Cyprus legal matters, it is advisable to consult with a qualified legal professional. If you have any questions or require any legal advice or assistance, please do not hesitate to contact us at


bottom of page