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International Public Records and Due Diligence - Part One

By: Teri Mayor, COGENCY GLOBAL on Mon, Apr 22, 2013

PART ONE:  Certified Copies of Company Formation Documents 



The examination of a potential target in a merger or acquisition or a borrower in a financial transaction requires looking at many documents, both private and public, to obtain an accurate picture of a company’s value. Three documents that are part of the public record in the United States and that can be considered to be the foundation documents of a legal opinion regarding the formation, registration and existence of an entity along with the encumbrances attached to the company’s personal property are:International Due Diligence

  • the certified copy of the company’s charter documents, with amendments, if any
  • the Certificate of Good Standing; and
  • the UCC search

You cannot always get an exact equivalent of these documents for companies formed outside theU.S.In some cases, there is no public record equivalent; in others, there are similar documents but the costs and time frame may create issues. In some countries, you can obtain much more information than would be available in theU.S.  

The focus of this article is on the certified copy. Certified copies of a company’s charter documents show that the entity is legally formed and registered and can provide information concerning the structure and other details about the company.


Certification Available by Notary Only
Outside theUnited States, a copy of a company’s formation documents, certified by the corporate registrar to be a true copy, is not always available. In many countries, such as inIreland,New Zealandand theNetherlands, plain copies are quick and easy to obtain but the companies registrar does not certify them to be a true copy. For example, in bothIrelandandNew Zealand, a copy of the registration documents can be obtained online, but certification is usually done by a notary or attorney, rather than an official from the Companies Office. For use abroad, you may need to have that certification further apostilled or authenticated depending on the requirements of the deal and whether the country is a part of the Hague Convention.


The Extract
In other countries, the equivalent of a company’s charter documents is either not filed or copies cannot be obtained; Japan, Germany and Finland are three such countries. In these cases, the registrar issues an “extract” which lists the information used to register the company. Often, this extract can be plain or certified by the registrar. What is included varies, but the name, date of formation, stock structure, location, and purpose of the entity are usually provided. In these countries, there are actual legal papers drawn up to form the entity, so it’s not that the “Articles of Incorporation” or “Memorandum and Articles of Association” don’t exist. These documents are just not filed publicly. Due diligence practice in these countries does require review of these documents, but they are generally requested from the company itself, along with an extract  from the company registrar showing the company was properly registered.


Registered Agent Provides Certified Copies
In some offshore jurisdictions, the registered agent for the company, either instead of or in addition to the registrar, can provide certified copies. In the Cayman Islands andAnguilla, for example, the company’s registered agent must be contacted in order to obtain certified copies of charter documents. The agent will then contact the company itself to get its permission prior to releasing these documents to a third party.  When you need copies for an entity in the Caymans orAnguilla, make sure the company is aware that you will be making this request to help things flow more smoothly and quickly. These jurisdictions and other offshore jurisdictions, such as theBahamasand theBritish Virgin Islandsoffer either “registry certified” or “agent certified” copies. If the document must be further authenticated by apostille, registry certified copies will be required.


Beware of Terminology Differences
Terminology can be tricky once outside theUnited Statesand it’s important to state exactly what you are looking for. In the U.S., it is common to refer to the company’s formation documents, and any subsequent amendments, as its “Certificate of Incorporation.” In many common-law jurisdictions outside theU.S., such asHong Kong,Singaporeand the Caymans, the term Certificate of Incorporation has a very different meaning. The formation document is the “Articles and Memorandum of Association” and the “Certificate of Incorporation” is instead a certificate issued by the registrar upon registration of the entity. In some countries, such asSingapore, if you request a Certificate of Incorporation, you will be told that can only be issued to the company itself. However certified copies of the companies formation documents are readily available to any party. 


Time Frame and Costs:
When working internationally, the timeframe and costs to obtain certified copies are often much greater than what is found in theU.S., especially when corporate registries are not national but local, as is true in many South American countries. Other factors, such as the need to translate documents that are not in English and the need for further authentication of the those documents by apostille or legalization, can also increase the costs and turnaround time to obtain these documents. It is not unusual for a request to take weeks and cost several hundred dollars.

As you can see, while review of a company’s formation and governing documents is standard in due diligence around the world, what can be obtained from the public record varies greatly. Understanding the general differences and terminology, as well as being prepared for much higher costs and longer turnaround times, will help you to obtain what you need and avoid unpleasant surprises.

Look for Parts 2 and 3 of this article where the international equivalents of Certificates of Good Standing and UCC searches will be discussed in more detail.


This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: International Secured Transactions