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Belgium’s Financial Transaction Due Diligence Procedures Under Scrutiny
In Belgium, due diligence and disclosure are crucial aspects of financial transactions. But what does this entail? And how can buyers ensure they are getting accurate information about the companies they’re considering investing in?
What is Due Diligence in Belgium?
According to experts, the typical scope of due diligence in Belgium covers:
- Legal aspects
- Financial matters
- Tax issues
- Commercial aspects
- Corporate matters
- Customer and supplier agreements
- Real estate issues
- Employee benefits
- Intellectual property
- Financing agreements
Pre-Contractual Statements and Liability
In Belgium, sellers have a pre-contractual obligation to inform and can be held liable if they fail to disclose important information. However, parties can agree to exclude extra contractual liability, except in cases of fraud or deceit.
Publicly Available Information
Before entering into an agreement, buyers can access publicly available information about the company, including:
- Documents deposited at the registry of the enterprise court (online)
- Deed of incorporation
- Annual accounts
- Company ownership and real estate transactions on public registers
- Intellectual property rights information
- Complete permits and soil investigations from relevant authorities
Impact of Buyer’s Knowledge
A buyer’s actual or deemed knowledge of a certain matter won’t necessarily prevent them from seeking damages. However, if the buyer had actual knowledge of the issue, they may be seen as acting in bad faith and could potentially limit their chances of successfully claiming damages.
Transaction Documentation Provisions
Transaction documentation often includes provisions specifying whether buyers can claim damages based on matters or circumstances they were aware of at the time of signing the agreement. This can include exclusions for both actual and deemed knowledge.
Conclusion
It’s essential for buyers to understand these procedures and requirements to ensure a smooth and successful financial transaction in Belgium. By being informed about due diligence, pre-contractual statements, publicly available information, and buyer knowledge, you can navigate the complexities of financial transactions with confidence.