Company Due Diligence in Germany

Company Due Diligence in Germany

Updated on Tuesday 26th January 2016

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Company-due-diligence-in-GermanyCompany verification in Germany

Germany, also known as “the engine of the European Union” attracts numerous foreign investors every year. While some of them come here to open new companies, the number of those seeking German partners is also rising. More often than before, foreign entrepreneurs start to verify the companies they are about to go into business with in order to make sure they have made the right choice. This practice is also very common in merger and acquisition transactions in Germany and is known as company due diligence. Whether it is conducted independently or with the help of professionals, company due diligence is very popular nowadays in Germany.

Our German lawyers provide company due diligence services to both local and foreign customers.

What is company due diligence and how is it conducted in Germany?

Company due diligence can be defined as a procedure or set of procedures conducted in order to verify a company from one or more points of view. The most effective way of verifying a German company is to perform a research with the local Trade Register or with the European Commercial Register. However, the information obtained from these two institutions are limited to certain information such as details about the shareholders and directors of the company. Certain details about the company’s financial background are also available. However, certain persons or companies need more specific information which is why they appeal to the services of a professional or a law firm in Germany in order to verify all the legal aspects of doing business with a certain company. This is also why company due diligence procedures can be divided into several types.

Types of company due diligence procedures in Germany

The German business environment can provide multiple investment opportunities, which is why company due diligence services have evolved and become quite complex. The following types of company verification procedures are available in Germany:

  • -          legal due diligence;
  • -          commercial or operational due diligence;
  • -          financial due diligence.

Environmental company due diligence is also available for certain industries.

For complete information about all the types of company due diligence procedures available in Germany, you can contact our lawyers.