Employment due diligence—share and asset purchases
Employment due diligence—share and asset purchases

The following Employment guidance note provides comprehensive and up to date legal information covering:

  • Employment due diligence—share and asset purchases
  • Introduction to the due diligence process
  • Relationship with disclosure
  • Level of detail required
  • Timing of due diligence
  • Responding to the due diligence questionnaire—the seller
  • Dealing with responses to the due diligence questionnaire—the buyer
  • The due diligence report

This Practice Note provides employment lawyers with an introduction to the due diligence process in which they will be involved as advisers to the seller or the buyer prior to the acquisition of shares in a private limited company or the acquisition of a business and its assets (the target). It also considers the factors affecting the nature and extent of due diligence that an employment lawyer for the buyer or seller should consider.

For more detailed guidance on the particular issues to consider in employment due diligence on a share purchase, see Practice Notes:

  1. Share purchases—employment issues acting for the buyer, and

  2. Share purchases—employment issues acting for the seller

For further information on complying with data protection obligations under Regulation (EU) 2016/679, the General Data Protection Regulation (GDPR) and the Data Protection Act 2018 (DPA 2018) during due diligence and on completion of a share or asset purchase, see Practice Note: Corporate transactions and service provision changes (employment)—data protection issues under the GDPR.

Introduction to the due diligence process

The starting point for a buyer in any share or asset purchase transaction is the maxim caveat emptor (let the buyer beware). Since the seller is under no duty to disclose to the buyer any defects in, or liabilities of, the target, the buyer will always need to conduct its