"DUE DILIGENCE" BEFORE THE PURCHASE OF REAL ESTATE ACROSS COMPANIES

We are going to analyze and examine the "due diligence" before the purchase of real-estate assets across companies.

 In this occasion we do not buy directly the building, but we realize the purchase of the company proprietary of the building.

We must not forget that our aim is the investigation or "due diligence" urban development previous of the building, in spite of buying a juridical figure since it is a company.

It would be necessary to include in this type of operations the suppositions of transactions with patrimonial interposed companies, with headquarters in tax havens. This one is the general case of proprietary companies of real estate that there form a part of another company head-board or principal shareholder located in the exterior (tax haven), who has an instrumental character. On having bought the actions of the instrumental company, it is acquired of automatic form the control of the foreign company in Spain - for example-.

These suppositions are in occasions of very difficult study, since several interposed companies happen and in different territories, there being a sequence of transactions impossibly to continue. It is important to indicate that, at first, every link of the chain knows the previous one and the later one, but his knowledge does not go beyond these. The examination of this type of operations needs a fiscal special analysis in order to respect the Spanish legislation, for what we will obviate this succession of companies.

Our previous report must be restricted directly to the study of acquisition of the shareholding of the property company which owns the real estate.

In these cases, the report, in general and of summarized form, must be completed by the following documents:

               - Copies of the title deed of the company from his constitution. Copies of the minutes book of the last six financial years society. Contracts with the only partner (if it is the case). Contracts of article, option, "warrant", etc. That had relation with the actions of the company. Copy of any title deeds of bond issue.

               - Shareholders' relation and distribution of actions and copy of the title deeds. Copies of the book of record of shareholders and of the extra-statutory agreements between shareholders. In case of shareholders not residents, copy of the declarations to the Record of Foreign Investments on the direct investments.

               - Current flowchart of the company, relation of proxies and copies of the deed of power granted and that have not been revoked.

               -Data on the ownership of shares of the company in other companies.

               -Documentation of contracts, correspondence and audit procedures.

               -Inventory accounting ledgers, financial statements, audit reports and balance sheets.

               -Copies of all insurance policies, society, employees, etc. and corresponding receipts to be aware of the payments. Summary of incidents in the last three years and pending claims.

               - Respect of the relations with the Administration, to obtain processes, receipts, denunciations and liquidations of:

                              - Environmental taxes.

- Water supplies and energy.

- Elimination and waste treatment and atmospheric emission in it case.

- Related natural spaces.

- Evaluations of environmental impact.

- Subsidies for the improvement of the production with regard to the protection in          general of the environment.

- Authorizations and fulfillment with the sectorial industry regulation.