Due diligence is conducted before a transaction is finalised. The scope of verification scales with the size and complexity of the deal.
Types of Due Diligence
Legal Due Diligence
Analysis of the legal aspects of the target: founding agreements, charters, contracts, lease agreements. Review of disputes, licences, environmental obligations, and subsidiary structures. Assessment of legal and regulatory compliance risks.
Financial Due Diligence
Evaluation of the target's financial health: financial statements, accounting practices, cash flow, credit history, past transactions. Assessment of profitability and long-term financial stability.
Commercial Due Diligence
Analysis of market position: market trends, customer preferences, competitive landscape, business model, and growth opportunities.
Tax Due Diligence
Identification of tax risks: review of tax records, compliance assessment, tax liabilities and benefits. Structuring the transaction to minimise tax exposure for both parties.
When Due Diligence Is Needed
- Purchasing property or a business in Georgia.
- Entering a partnership or joint venture.
- Making or attracting investments.
- Vetting a new counterparty or supplier.
- Mergers and acquisitions.
What is checked in state registries
The first part of a legal check relies on data from the National Agency of Public Registry:
- Company. An extract from the Registry of Entrepreneurs shows the company's registration data, partners, director and legal address. The fee is GEL 20 within 1 working day and GEL 75 on the day of filing, an electronic extract GEL 13 and 52, and an English version adds GEL 26 to the fee.
- Property. An extract from the property registry by cadastral code shows the owner, area, designated use and registered encumbrances. The extract costs GEL 20 within 1 working day and GEL 75 on the day of filing, an electronic one GEL 13 and 52.
The registry shows only registered rights. Third-party claims, unregistered encumbrances and disputes without security do not appear in an extract, so the check does not stop at the registry. More on this is in our guide to property due diligence before you buy, and on the types of business checks in our article on what due diligence is.
Due diligence when buying property
For a deal on a flat or house, the check is built into our legal support in real estate transactions: we check the property and the seller before any payment and set up the payment order so that money passes after the right is registered. If the property is mortgaged or pledged, the order is explained in our article on buying encumbered property.
Frequently asked questions
How much does a registry extract cost for checking a company or property?
A National Agency of Public Registry extract costs GEL 20 within 1 working day and GEL 75 on the day of filing. An electronic extract costs GEL 13 and 52 respectively. An English-language Registry of Entrepreneurs extract adds GEL 26 to the fee.
Is a registry extract enough for due diligence?
No. An extract shows only registered rights and encumbrances. Unregistered claims, disputes without security and hidden liabilities do not appear in it, so a legal check includes analysis of documents, contracts and the history of title transfers.