HowtoWriteaDueDiligenceReport如何写尽职调查报告

bj-25398v4MORRISON&FOERSTERLLPHowtoWriteaDueDiligenceReportforInvestmentPurposesTheMostPopularDraftingModelforMemosandDDReportIntheUnitedStates’legaleducationorpractices,IRACstructureisthemostusedwritingprocessforeachandeverylegaldocument.Itisefficient,andveryeasilytobegrasped.I------issueR-----rulesandcases,backgroundA-----analysisC----conclusionWecancomparethisstructurewithourChinese’sclassicalwritingmethods:qi(起),cheng（承）,zhuan（转）,andhe（合）.TheInvestmentModelAninternationalinvestorwishestoputsomecapitalmoneyintoadomesticcompany,wecallitatargetcompany,andafterthetargetcompanyearnsenoughprofits,forinstance,thecompanycanmakeanIPOinChinasecuritiesmarket,thentheinvestormaywithdrawitinvestment,plusthepremiuminterestsorprofitsfromthecompany,bytransferringthesharesithasinthetargetcompany.Itshouldbenotedthatinthisprocess,theinvestorshalldealwiththeshareholdersofthetargetcompany.AtcurrentChinafinancialmarket,probablyalltheshareholderswishtogotothepublicmarkettoattractmoreinvestment,sodealingwiththeseshareholdersisnotamajorproblem.Themajorproblemishowtoavoidthelegalandthefinancialrisksintheinvestment.Whatiftheinvestmenthassomelegalobstaclesthatprohibititfromwithdrawal?ThisisthekeyissueandthemostimportantconcernintheDDReport.DefinitionAduediligencereport,alsocalledDDReport,isawidelyusedlegaldocumentintoday’slegalpractice.Especiallyininternationalinvestmentactivities,DDReportcanhelptheinvestortomaketherightdecisionforitsinvestmentstrategies.WhatisaDDReport?Wecandefinethelegaldocumentasthekeyandbasicinformationaboutatargetcompany’sfinanceandmanagement.Theinformationcanshowtherisksorthebenefitsfortheinvestments.Beforetakinganyactions,arationalinvestor,ofcourseincludingalltheexperiencedones,generallywillretainalawfirmoranaccountingfirmtodothereport.WecancompareaDDReportwithyourpersonaldiary.IwritealltheactivitiesIdidinonedayintomydiary,andformostoftimes,IonlygiveashortsummaryofthemostimportantthingsIhadinthisday.Forinstance,IdonotwritewhatIeatinacommondayinmydiary,butIwilldescribeonedishindetailifIattendmyfriend’smarriageceremony,ifthisdishimpressedmesowell.Imeanwhetheritisverydelicious,oritisverybadlytasted.Thereasonissimple,itgivesmesomeunusualexperience,pleasantorunpleasant.PreliminaryDueDiligenceDocumentRequestListbj-25398v42MORRISON&FOERSTERLLPADDReportshowsuswhatwereadandexaminedinthedocumentscomingfromthetargetcompany.Wewritewhatwesawinthesedocumentsandreportthemtoourclients,justaswewritewhatweexperienceinonedayforourdiary.Ofcourse,sincethedocumentsaresobigandwegenerallyhavetomakemostsummariesforourwritings.Occasionally,wejusttranslatesomeofthekeydocumentsfromChineseintoEnglishandputthemintoourreport.BecauseIamalegalpractitioner,IwillexplaintheDDReportfromalegalpointofview.Asaresult,theDDReportformyclientmustshowthemostimportantinvestmentrisks.StepstoDotheDDReportGenerally,ifwewishtohaveacompleteDDReport,thefollowingfourstepshavetobefollowed.AndamoderateDDReportusuallywilltakeustwotothreeweekstofinish.StepOne:CollectAlltheInformationfromtheTargetCompanyAtthisstep,weshallproduceaDocumentationRequestListandasktherelevantlegaldocumentsfromthecompany.Igiveyousuchanexampleasanattachmentone.Letusgothroughthelistveryquickly,Iamsurethatafteryouhavefinishedreadingofthislist,youcangetaroughimpressiononatargetcompany’sstructure,andmanagementsystem.StepTwo:ReviewtheDocumentsandProduceaQuestionListAtthisstage,weshallcarefullyreadwordbyword,numberbynumber,datebydate,figurebyfigure,everyofthedelivereddocumentsfromthecompany,andaskquestionsindetailaboutthelegalityandclearnessforthem.Forexample,ifweseesomewhereinonedocumentisunclearbecauseoftheprintingprocess,andthenweshallrequestanotherclearcopyofthisdocument.Theotherexample,ifwemissonepageofacontract,thenweshallaskforthemissingonefromthecompany.Anotherexample,ifonecertificateneedstobeannuallyregistered,anditisnotforthepastyear,thenweshouldaskwhenthecertificatewillberegisteredorexaminedthisyear.Kindlyremindthecompanytodeliverthemissingdocumentsinareasonabletime.Thisprocessisverytime-consuming.Weshallkeepalertoneverysuspiciouspointinthedocuments.StepThree:OnsiteInterviewwiththeOfficersoftheCompanyIfthedocumentsarecompleteandverysound,Imean,theycananswereveryquestionorsolvethelegalissuesfortheinvestment,thisstepcanbedeleted,orcanbeconductedthroughaPreliminaryDueDiligenceDocumentRequestListbj-25398v43MORRISON&FOERSTERLLPtelephonecall.Althoughthisdoingcansavemuchtimeforus,Ipersonallyandstronglyrecommenddoingsuchanonsiteinterview.Notonlymaywepromoteorjustestablishbetterconnectionswiththecompanyasafuturepotentialclientforotherdeals,butwecanpersonallyseethewholeprocessoftheproductionorthemanagementofthecompany.Andwecangetaroughimpressiononthefixedorotherassetslistedonthedelivereddocuments.Finally,wemayalsoexperiencesomelocalbusinessculture,orjusthaveanewtasteoflocalfoods.StepFour:DraftandProducetheDDReportUsuallythefirstthreestepswilltakeusaboutoneoroneandahalfweektofinish,foracomplexproject,itmaycostamonth,ormonths.Afterwehavefinishedthepreparationprocess----Icallthefirstthreestepstoge