3.1
Are there any jurisdiction-specific points relating to the following aspects of the target that a buyer should consider when conducting due diligence on the target? (a) Commercial/corporate, (b) Financial, (c) Litigation, (d) Tax, (e) Employment, (f) Intellectual property and IT, (g) Data protection, (h) Cybersecurity and (i) Real estate.
Mauritius
Answer ... (a) Commercial/corporate
Legal and financial due diligence is undertaken by the buyer. This will involve a review of the following documents in respect of the Mauritian target:
- a certificate of incorporation, including a certificate of incorporation on a change of name;
- the constitution of the company;
- the register of members, directors and beneficial owners; and
- any charges against the assets of the target or pledges created by shareholders in respect of the shares which they hold in the target.
(b) Financial/tax
This is unregulated and therefore remains an arrangement between the buyer and the seller. However, there is no capital gains tax or withholding tax in Mauritius.
(c) Litigation
Litigation searches with the Supreme Court of Mauritius are generally undertaken as part of the due diligence exercise. This is a public search and results are available as from 2012 onwards.
(d) Employment
The Workers’ Rights Act is the governing law on employment and its provisions will apply if there is a termination of employment upon a merger or takeover.
(e) Intellectual property/information technology
The governing legislation for intellectual property is the Industrial Property Act, which establishes a register of patents, industrial designs, marks, geographical indications and layout designs maintained by the director of the Industrial Property Office.
The Copyright Act captures a computer program as ‘artistic, literary or scientific work’ and would extend partly to information technology.
(f) Data protection and cybersecurity
The Data Protection Act is the governing legislation for data protection in Mauritius. It is based on the EU General Data Protection Regulation and its aim is to strengthen the control and personal autonomy of data subjects over their personal data, in line with current international standards.
(g) Real estate
Under Mauritius law, legal title to real estate is evidenced by registration in the register of the registrar general of Mauritius. The register is a public document and is the source of information on real estate due diligence in Mauritius.
Mauritius
Answer ... These will be searches with:
- the registrar of companies (ROC), who is responsible for incorporating companies; and
- the registrar general/conservator of mortgages (RG/CM), who is the supervisor of property of Mauritian citizens and companies.
The register maintained by the RG/CM is public and discloses whether the assets of the Mauritian company or citizen have been charged in favour of secured creditors that will enjoy priority in ranking on the insolvency of the Mauritian company or citizen.
The register of the ROC confirms:
- whether the company is still registered with the ROC; and
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details such as:
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- the names of directors, shareholders and the company secretary;
- accounts filed; and
- whether the company has paid its dues to the ROC.
The register of the ROC is public only in respect of companies which undertake domestic activities, as the ROC keeps confidential the files which she maintains in respect of companies licensed by the Financial Services Commission of Mauritius (FSC) to undertake global business activities either as a global business company (GBC) or an authorised company (AC).
The ROC will only grant access to the records maintained in respect of a GBC or an AC upon the production of a letter of authorisation issued by an officer of such companies.
Mauritius
Answer ... Yes, pre-sale vendor legal due diligence is customary in Mauritius. However, there are no forms which are prescribed and to be used towards this end.