One of the hottest TV series in the summer of 2020 should be "Thirty Only", right? Each character in the play is alive, independent and multifaceted, and the three 30-year-old heroines are at different stages of life, but they are all caught in the cracks of marriage, family, and career. It is precisely because the plot resonates with the audience that the audience is substituted for it and full of emotion. As an ordinary person, watching TV may not only be a pastime, but also a "promotion and understanding" to some extent, when we encounter difficulties, in addition to rationality, we also need to understand certain legal common sense, and use the weapon of law to escort our life road. The author wants to talk about how Gu Jia, one of the shrewd and independent heroines, can not be deceived by Mrs. Li, the C position of the wife's circle?

The plot is very simple, after Gu Jia pulled the fireworks business from the playground of Mrs. Yu's house, the values were briefly misaligned, she blindly recognized the character of the wives, and as her position continued to move closer to the C position when taking a group photo, she had the "illusion" of successfully blending into the wife's circle, resulting in being deceived by Mrs. Li when buying the tea factory business.

"Vanity Fair One" in the play "Thirty Only"

In fact, Gu Jia's acquisition of a tea factory is a typical asset/equity acquisition project, which is a relatively mature service project for non-litigators. Gu Jia should not have a lawyer who has cooperated for many years, otherwise, with a phone call, the lawyer can point out how necessary the buyer's due diligence work is before signing the asset/equity acquisition agreement, and I believe that Gu Jia's shrewdness and rationality will definitely adopt the lawyer's advice.

"Due diligence work" mainly includes legal due diligence and financial due diligence, and individual projects may have due diligence work of other third-party institutions due to the particularity of the transaction target.

The so-called legal due diligence refers to the fact that in a business plan or transaction in which the enterprise under investigation and its equity or related assets are the subject of the transaction (including but not limited to new investment, equity financing, bond financing, acquisition, merger, restructuring, asset purchase, equity transfer and other transaction forms), the lawyer accepts the entrustment of the party to the proposed business plan or transaction, conducts a comprehensive investigation of the investigated enterprise based on professional knowledge and skills and the full cooperation of the investigated enterprise, and discovers and sorts out the complex facts and situations. And the process of forming a legal due diligence report after analyzing and judging from a legal perspective to provide legal advice for the client to make a business plan or transaction decision. In the process of legal due diligence, there are also cases where the party under investigation entrusts a lawyer to assist in sorting out and providing investigation documents and materials to respond to the investigation by the client (relatively rare).

Generally speaking, legal due diligence mainly includes the following processes:

1. Accept the commission

In the name of the law firm, the lawyer shall communicate and confirm with the client on the purpose of the entrusted due diligence, the entrusted matters, the scope of services, the form and delivery of the work results, the service period, the lawyer's fees, confidential matters and other substantive contents, and sign the entrustment contract.

2. Background check before legal due diligence

Background checks mainly include business information investigations and legal search studies. On the basis of a general understanding of the business information of the party under investigation, lawyers should conduct preliminary research and sort out the legal issues involved in the party under investigation and the industry in which they operate in advance.

3. On-site due diligence

On-site due diligence mainly includes the preparation of a legal due diligence checklist, the collection of documents, personnel interviews, on-site investigations, etc. according to the content of the legal due diligence checklist. Generally speaking, the investigation list mainly includes the basic information, historical development, qualification license, assets and owner's equity, liabilities and credit, intellectual property rights and major trade secrets, foreign investment and guarantees, employee information, litigation, arbitration, penalties, etc. of the party under investigation.

4. Independent investigation

Independent investigation means that in the process of due diligence, lawyers do not need to obtain the information of the party under investigation from relevant institutions or departments in an existing legal and feasible manner without the consent and assistance of the party under investigation, so as to verify whether the relevant information of the party under investigation is complete, accurate and true, and whether it reflects the current and latest actual situation of the party under investigation. For example, verifying with the industry and commerce department the equity pledge, mortgage of machinery and equipment, and judicial seizure of the party under investigation; Check whether there is any litigation involved through the court's official website or professional database.

5. Issue due diligence reports

In due diligence, lawyers conduct legal analysis of the problems found, analyze the legal consequences and impact on the party under investigation, the business plan or transaction, and report the results of the analysis to the client in writing.

6. Organize and file working papers

Working papers should have index numbers and should reflect the entire due diligence exercise truthfully, accurately and completely.

In particular, it is important to note that the examination of the qualifications of the surveyed enterprises is very important. Qualification review mainly includes intellectual property rights and various qualification certificates/licenses, etc., especially the qualification review of some high-tech enterprises and industries whose business scope requires special licenses is particularly important. Taking Gu Jia's tea factory as an example, according to the understanding of ordinary people, tea as an edible product must require special licenses or qualifications. After Gu Jia took over, he found that there were three main problems in the tea factory: first, financial problems, financial problems can be found through preliminary financial due diligence; second, the issues involved in litigation; Third, organic labeling/qualification issues, the latter two issues can be discovered through legal due diligence. Taking a step back, if the above problems are discovered during the due diligence process and Gu Jia is still willing to take over, the follow-up lawyers will also help Gu Jia fight for more rights and interests or set up a relatively safe transaction model when participating in negotiations and drafting supporting legal documents such as asset/equity acquisition agreements, which is more valuable and decent than Gu Jia running to his wife's party afterwards to "make a generous statement" and "be careless".

"Vanity Fair III" in the play "Thirty Only"

Taking the classic case of the Supreme People's Court (2013) Min Er Zhong Zi No. 67 as an example, the case held that "the equity transferor should fully disclose and the transferee should exercise due diligence in a corporate merger", and further put forward the following suggestions:

First, the transferor must disclose complete information about the target company, otherwise it may bear the liability for breach of contract.

Second, the transferee should conduct due diligence and complete the terms of the Equity Transfer Agreement:

1. Before transferring, be sure to entrust professional law firms, accounting firms and other intermediaries to do due diligence to minimize the problem of information asymmetry.

2. Carefully study relevant company documents, find transaction risks and prevent them in advance.

3. Set up complete statement and warranty clauses, liability clauses for breach of contract, annexes to the agreement, etc. in the equity transfer agreement.

Finally, Gu Jia has not done a good job of due diligence, is there still the possibility of making amends? At this point, professional services from litigators are required.

According to Article 148 of the Civil Code, which has not yet taken effect, if a party fraudulently causes the other party to carry out a civil legal act contrary to its true intention, the defrauded party has the right to request the people's court or arbitration institution to revoke it. Article 500 stipulates: If a party causes losses to the other party in any of the following circumstances during the conclusion of a contract, it shall bear liability for damages:

(1) Conducting consultations in bad faith under the guise of concluding a contract;

(2) intentionally concealing important facts related to the conclusion of a contract or providing false information;

(3) Other conduct that violates the principle of good faith.

Therefore, Gu Jia's top priority is to hire a professional litigation lawyer to sort out the evidence as soon as possible, exercise the statutory right of revocation within the statutory time limit, and require Mrs. Li to compensate for the loss.

(This article is translated by software translator for reference only.)