--- name: workflow-full-due-diligence-pack-sboghossian title: Full Legal Due Diligence Pack description: Use when orchestrating a full legal due diligence exercise for an M&A transaction, private equity investment, or acquisition financing. Covers ten parallel workstreams (corporate, commercial contracts, employment, IP, real estate, litigation, regulatory, tax, data privacy, financial), with MENA-specific flags for change-of-control, foreign ownership restrictions, PDPL readiness, and open-source IP compliance. Produces a structured DD report with green/amber/red workstream ratings. author: sboghossian author_url: https://github.com/sboghossian/mini-claude-for-legal/tree/main/skills/workflow/workflow-full-due-diligence-pack license: MIT version: 0.1.0 execution_mode: open jurisdiction: general practice: corporate language: en --- # Full Legal Due Diligence Pack ## Purpose This workflow orchestrates a complete legal due diligence exercise for acquisitions, equity investments, and financing transactions. It produces a structured DD report with per-workstream risk ratings, a critical findings memo, and a recommended list of actions (reps & warranties scope, specific indemnities, escrow requirements, and required pre-closing remediation). --- ## Inputs | Input | Required | Notes | |-------|---------|-------| | Target company name + jurisdiction | Yes | Drives applicable law for each workstream | | Transaction type | Yes | Acquisition / equity investment / debt financing — affects scope | | Materiality threshold | Yes | Tie to deal size: e.g., findings >$50k flagged; >$500k red | | Data room access | Yes | All documents must be accessible before commencing | | Deal timeline | Yes | Drives workstream prioritization and depth | | Buyer's side priorities | Yes | Any specific areas of concern from acquirer | | Exclusivity terms | Recommended | Know how much time is available | --- ## Logic — Workstream Overview All ten workstreams run in parallel. Each produces: **RAG rating** (Green / Amber / Red) + **list of findings** + **recommended actions**. ### RAG Rating Criteria | Rating | Meaning | Response | |--------|---------|---------| | Green | No material issues found | Confirm in rep | | Amber | Issues present but manageable | Targeted indemnity or escrow; disclosure schedule note | | Red | Material issue requiring action | Pre-closing remediation OR price adjustment OR walk-away | --- ## Workstream 1 — Corporate **Scope**: legal existence and authority of the target Checklist: - [ ] Certificate of incorporation / trade license (current and valid) - [ ] Memorandum and Articles of Association (current, consolidated version) - [ ] Cap table — fully diluted; all share classes, options, warrants, convertible instruments - [ ] Shareholder register — confirms legal ownership - [ ] Board minutes — last 3 years; resolutions for major decisions; authorization trail - [ ] Related-party transactions — arms-length? properly approved? - [ ] Foreign ownership compliance — is the ownership structure compliant with the jurisdiction's FDI/foreign ownership rules? - [ ] UBO (Ultimate Beneficial Ownership) disclosures — AML/regulatory requirement in UAE, KSA, DIFC - [ ] Corporate group structure — any subsidiaries, JVs, branches? **MENA-specific flags:** - UAE mainland: foreign ownership restrictions still apply in certain sectors (check the Positive List under FDI Law); verify local partner arrangements - KSA: foreign investment license required (MISA license); verify it is current and covers the actual business activity - DIFC/ADGM: more flexible foreign ownership; verify regulated activity licenses (DFSA/FSRA) if applicable --- ## Workstream 2 — Commercial Contracts **Scope**: material contracts that drive revenue or create obligations Checklist: - [ ] Top 20 contracts by revenue — check for change-of-control provisions (do they require consent on acquisition?) - [ ] Assignability — can contracts be transferred to the acquirer without consent? - [ ] Key customer contracts — concentration risk; auto-renewal vs. renegotiation risk - [ ] Key supplier contracts — critical dependency? exclusivity? - [ ] Exclusivity clauses — does the target have exclusivity obligations that restrict the acquirer's other business? - [ ] Most-favored-nation (MFN) or pricing commitments - [ ] Termination-for-convenience clauses — can customers exit quickly? - [ ] Force majeure coverage — COVID/pandemic clauses; war clauses (relevant for MENA) - [ ] Government contracts — procurement rules; anti-assignment; local content requirements **Red flags:** - Revenue concentration (>30% from a single customer who can terminate) - Change-of-control provisions requiring third-party consent that may not be obtainable - Unusual exclusivity or non-compete obligations that bind the acquirer --- ## Workstream 3 — Employment **Scope**: material employment obligations and key personnel risk Checklist: - [ ] Top 10 employees + key contractors — contract review; severance exposure; garden leave - [ ] Restrictive covenants — non-compete, non-solicit enforceability in the jurisdiction - [ ] Equity / incentive plans — vesting schedules; change-of-control acceleration provisions - [ ] Employment classification — are contractors correctly classified? Misclassification creates statutory employment liability - [ ] Government registrations current? (Qiwa/GOSI in KSA; MOHRE/WPS in UAE; NSSF in LB) - [ ] Pending or threatened employment claims - [ ] EOSG/EOSA accruals — are they fully provisioned in the accounts? - [ ] Collective agreements or employee representation — consultation obligations on acquisition --- ## Workstream 4 — Intellectual Property **Scope**: IP assets and ownership clarity Checklist: - [ ] IP ownership — is all material IP owned by the company or properly licensed in? - [ ] IP created by founders — was it assigned formally? (see [[draft-ip-assignment]]) - [ ] IP created by employees — employment agreements contain IP assignment provisions? - [ ] IP created by contractors — work-for-hire or assignment clause in contractor agreements? - [ ] Registered IP portfolio — trademarks, patents, domain names: current, valid, renewed? - [ ] Open-source software — list all OSS used in the product; identify any copyleft licenses (GPL, LGPL, AGPL) that impose licensing obligations - [ ] Trade secrets — are NDAs in place for employees and contractors with access? - [ ] License agreements (in) — any material IP licensed in? assignable on transaction? - [ ] License agreements (out) — any IP licensed to third parties? exclusivity? Run [[review-ip-ownership-clarity]] as part of this workstream. --- ## Workstream 5 — Real Estate **Scope**: premises and property obligations Checklist: - [ ] Leases — all locations; term, rent, break clauses, renewal options, assignment on change of control - [ ] Owned property — title, encumbrances, mortgage/charge (registered?) - [ ] Dilapidations exposure at lease end - [ ] Planning / zoning compliance - [ ] Statutory registration current? (Ejari in Dubai; Tawtheeq in Abu Dhabi; Ejar in KSA) --- ## Workstream 6 — Litigation **Scope**: pending and contingent legal liability Checklist: - [ ] Pending litigation — court and arbitration proceedings; amounts at stake - [ ] Threatened claims — received demand letters or pre-action notices - [ ] Settled claims in last 5 years — what was the issue and amount? - [ ] Regulatory investigations or enforcement actions - [ ] Dispute resolution clauses in material contracts — arbitration? forum? **Red flags:** material pending claims; pattern of commercial disputes; regulatory investigations --- ## Workstream 7 — Regulatory / Licensing **Scope**: licenses, permits, and regulatory compliance Checklist: - [ ] All operating licenses current and valid for the actual business activities - [ ] Financial services licenses (if applicable) — DFSA, FSRA, SAMA, CBUAE authorization - [ ] Data protection filings / DPO appointment where required - [ ] Sector-specific compliance: healthcare, education, legal, financial services all have bespoke licensing - [ ] Foreign direct investment restrictions — approvals required on change of control? - [ ] Trade sanctions compliance — no dealings with sanctioned parties (OFAC, EU, UN) Run [[review-compliance-gap-analysis]] and [[research-licensing-requirements-lookup]] as part of this workstream. --- ## Workstream 8 — Tax **Scope**: tax compliance and open liabilities Checklist: - [ ] Corporate tax filings current (UAE CT applies from June 2023; KSA 20% on foreign shareholder profits; LB various) - [ ] VAT registration and filings — UAE 5%; KSA 15%; others - [ ] Withholding tax on dividends / interest / royalties — applicable in KSA, LB; UAE 0% for most - [ ] Transfer pricing — intercompany transactions at arm's length? documentation adequate? - [ ] Open tax assessments or disputes - [ ] Tax losses carried forward — available to acquirer? - [ ] Employee payroll tax compliance --- ## Workstream 9 — Data Privacy **Scope**: personal data compliance posture Checklist: - [ ] Data inventory — what personal data is collected, processed, stored? - [ ] Privacy notice / policy — current, accurate, accessible? - [ ] Consent mechanisms — valid legal basis for each processing activity? - [ ] Third-party data processors — DPAs in place? (see GDPR Art. 28 and PDPL equivalents) - [ ] International data transfers — SCCs or equivalent for transfers outside adequate jurisdictions? - [ ] Breach history — any notified or unnotified breaches? - [ ] UAE PDPL compliance posture (Federal Decree-Law 45/2021) - [ ] KSA PDPL compliance posture (Saudi PDPL, effective September 2023) - [ ] GDPR compliance if serving EU data subjects --- ## Workstream 10 — Financial / Disclosure Schedule **Scope**: reconcile legal DD findings with financial statements Checklist: - [ ] EOSG provisions — are they correctly calculated and fully provisioned? - [ ] Litigation reserves — do the accounts reflect pending claims? - [ ] Lease liabilities — IFRS 16 / ASC 842 right-of-use assets vs. actual lease obligations - [ ] Contingent liabilities — guarantees, letters of credit, off-balance sheet arrangements - [ ] Revenue recognition — does it match the contractual basis? - [ ] Related-party transactions — arms-length and disclosed? --- ## Output — Due Diligence Report Structure ### Report Sections 1. **Executive Summary** (1 page) - Transaction overview - Overall DD verdict (Green / Amber / Red at portfolio level) - Top 3–5 critical findings requiring buyer attention 2. **Critical Findings** (3 pages) - Each material issue: workstream, description, quantum, recommended action 3. **Workstream Sections** (5–10 pages each) - Per-workstream: RAG rating, findings list, recommended actions (indemnity / specific rep / escrow / pre-closing fix) 4. **Disclosure Schedule Recommendations** - Which items to flag for negotiation; what the seller needs to disclose against which reps 5. **Reps & Warranties Scoping** - Based on DD findings, areas where reps should be strengthened or where buyer should seek specific indemnities 6. **Post-Closing Actions Calendar** - Remediation items; filing deadlines; integration milestones --- ## Why This Matters Legal due diligence converts transaction risk from unknown to quantified. Each workstream finding becomes an input to the deal structure: price adjustments, specific indemnities, escrow sizing, and earn-out conditions are all driven by DD output. A thorough DD also protects the buyer: knowledge of a defect at DD prevents it from ripening into a rep & warranty claim later. --- ## Related Skills - [[review-ip-ownership-clarity]] - [[review-compliance-gap-analysis]] - [[research-licensing-requirements-lookup]] - [[draft-ip-assignment]] - [[workflow-investment-round-closing-pack]] - [[workflow-startup-incorporation-pack]] - [[wiki-vc-startups]]