CONFIDENTIALDue diligence
Due diligence
report
MUSTERFIRMA GmbH
36Findings
7High risks
9Value potential
As at: 21.07.2026
Request a demoRequest a demoCONFIDENTIALThe due diligence – the in-depth review of your company – produced 40 findings in total: 9 rated high, 27 medium and 4 low. Particularly relevant is the contradictory commercial register identity of MUSTERFIRMA GmbH – it is therefore not clearly documented which legal entity is being reviewed. In addition, trademarks used in day-to-day operations are held by an affiliated holding company and may only be used by MUSTERFIRMA under a time-limited licence. Finally, the list of creditors – the overview of outstanding obligations – has not been reconciled with the documented financing arrangements and the Frachtmuster receivable.
These points concern your legal identity, key rights of use and the completeness of your financial obligations.
The remaining findings should be worked through in a structured way, in line with their rating.
We will tackle these points together with you and thereby create a solid basis for the sale process.
You must prove beyond doubt which company is being sold, otherwise the transaction may fail on the target's legal identity alone.
If MUSTERFIRMA does not itself own its core trademark, or may not use it permanently, the buyer is not acquiring the operating business in full and will demand a solution before closing.
Without a reliable, reconciled overview of all financial debt, the buyer cannot reliably determine the actual deduction from the purchase price.
You should provide the missing documents in full and in an orderly manner at an early stage, so that the review does not stall and no unnecessary mistrust arises on the buyer's side.
MUSTERFIRMA GmbH appears in the documents with contradictory register data: on the one hand Musterstadt, HRB 84213 is stated, while the same number is assigned to MUSTER Design GmbH in another document; on the other hand Beispielstadt, HRB 210574 and the VAT ID 312457800 appear. Behind this there may be an incorrect document assignment, an unclarified change of company name, or a mix-up of the legal entity. As things stand, it is therefore not clearly evidenced which company you are actually buying and whether the seller is legally entitled to sell it (seller's title).
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Several documents that are material to the due diligence (DD) – the review of your company ahead of a sale – are missing from the current document set. Not included are managing director and shareholder agreements, official concessions or approval certificates, customer lists and the order book, documents on pension commitments, and the lease for the business premises. Without these documents, important legal and economic aspects of the company cannot be reviewed in full.
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In the commercial register you have disclosed only the statutory minimum share capital of EUR 25,000 – the base amount contributed by the shareholders on incorporation. At the same time there is a NordPay business loan of EUR 49,000 plus a fixed fee of EUR 4,588; it therefore has to be examined whether your equity base and liquidity match your actual financing activity. This matters for the sale because possible loss carryforwards – accumulated losses from earlier years – or additional financing needs can affect the economic value and hence the purchase price.
Who helps: Your auditor/trustee – we coordinate this for you
What is this? A working capital / net debt adjustment is a mechanism that corrects the purchase price on the basis of the financial position as at the agreed reference date. It examines whether sufficient working capital – capital available at short notice for operations – is in place, and how high net financial debt is after deducting eligible cash and cash equivalents.
This is what you get from your lawyer/adviser: You receive a transparent calculation of working capital and net financial debt, together with a proposal for the definitions and the calculation mechanism in the purchase agreement.
What you need to watch out for: Check whether the NordPay loan, including the fixed fee, is fully recognised as financial debt. Set out clearly which cash items are offset and which reference date applies to the calculation. Also make sure that the financial figures used agree with the accounts and the liquidity planning.
The current account credit line of EUR 60,000 is secured by personal guarantees – i.e. personal liability towards the bank – from Musterfrau and Max Mustermann of EUR 30,000 each. As both are managing directors of MUSTERFIRMA GmbH, this financing depends on them personally. On a sale they must be released from the guarantees so that they no longer remain liable for the company's loan.
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The financing agreements with RevShare and NordPay may restrict the planned sale, because certain disposals are only permitted with prior written consent. With RevShare, a sale or change of control – a change in control over your company – may in addition trigger a payment. The NordPay clause is in any event relevant in an asset deal, i.e. the sale of the business or of individual assets; whether it also applies to a share deal, the sale of the shares in the company, is not clear from the present wording.
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What is this? A change-of-control clause governs what happens if control over your company changes, for example through a sale of shares. It can trigger a consent requirement, a termination right or a payment, and can therefore delay the sale or require additional steps before closing.
This is what you get from your lawyer/adviser: The lawyer examines whether the clauses apply to the planned asset deal or share deal and prepares the necessary consent and repayment requests. They also draft the conditions precedent for the SPA, so that the sale is only completed once consent, repayment and release of collateral are in place.
What you need to watch out for: Review the full contractual wording, including the consequences for termination and payment. Clarify separately whether the clauses apply to an asset deal, a share deal or both forms of sale. Make sure that the required consents, repayment confirmations and releases of collateral are available in writing before closing.
The list of creditors, described as complete, shows outstanding amounts totalling EUR 717,190.57, but omits several financings documented elsewhere, including C. Musterhaus, RevShare, Musterbank AG, the private EUR 20,000 loan, TradeFin AG and TradeBridge GmbH. For Frachtmuster the list states EUR 58,781.25, whereas an acknowledgement of debt shows EUR 181,864.14 plus EUR 10,761.97 in interest. As no reference date is apparent either, you cannot reliably determine net debt – the net financial debt relevant to the purchase price – nor the repayment amounts and the closing funds flow, i.e. the sequence of payments on completion of the sale.
Who helps: Your auditor/trustee – we coordinate this for you
What is this? With closing accounts, the purchase price is adjusted on the basis of the actual financial figures on the completion date. The debt-like definition determines which obligations are treated economically like financial debt and are therefore deducted from the purchase price; the funds flow shows which amount goes to whom on completion.
This is what you get from your lawyer/adviser: You receive a net debt list drawn up as at a fixed reference date, with supporting evidence, plus a transparent calculation of the purchase price adjustment and of the individual payments on completion.
What you need to watch out for: Check whether all financings and the Frachtmuster receivable are genuinely included, with principal and interest. Make sure that all confirmations use the same reference date and that payoff amounts take into account any interest or fees up to the payment date. The funds flow must agree with the confirmed balances and the agreed purchase price adjustments.
A VAT group has been documented since 01.09.2016 – under which MUSTERFIRMA is treated for VAT purposes together with MUSTER Plus Holding GmbH as the controlling company. Later information on shareholders and managing directors deviates from this, which is why it is unclear when the financial, economic or organisational integration – the connection required between the companies – changed or ended. This is relevant to your sale because it leaves open which legal entity the VAT and liability positions for each period are attributable to.
Who helps: Your tax adviser – we coordinate this for you
What is this? A VAT group means that several legally independent companies are treated as a single entity for VAT purposes. This requires financial, economic and organisational integration – a sufficiently close connection in terms of shareholding, business activity and management.
This is what you get from your lawyer/adviser: The tax adviser prepares a timeline of the VAT group for you, reconciles it with the VAT returns and drafts the key tax parameters for a specific indemnity in the SPA (company purchase agreement).
What you need to watch out for: For each period, review the shareholdings, the actual management and the economic connection between the companies. Also reconcile which legal entity declared the VAT and to whom the respective VAT and liability positions were allocated. The indemnity should expressly also cover the consequences of a retroactive termination of the VAT group.
You have several short-term financings running at the same time: a NordPay business loan, RevShare revenue share, a CashFlow Partners GmbH merchant cash advance, a TradeFin AG fine-trading facility and a very short-term interim loan of EUR 500,000. With several of these financings, repayment is linked directly to revenue or debited daily from the money coming into your accounts, so liquidity is continuously drained from the company. For the sale, it is critical which residual debt exists, which collateral or assignments – claims to payments that have been transferred – apply, and which financing provider ranks first in the event of a conflict.
Who helps: Your M&A lawyer – we coordinate this for you
What is this? Revenue-linked financings such as revenue share or a merchant cash advance are not repaid only in fixed monthly instalments, but directly out of an agreed share of your revenue or of the money coming into your accounts. Collateral and assignments can additionally give the financing provider access to certain receivables or incoming payments; a waiver is its written renunciation of certain rights or conditions.
This is what you get from your lawyer/adviser: The lawyer reviews all financing agreements and prepares an overview of residual debt, collateral, assignments and their ranking. They also obtain or review payoff letters and waivers that state clearly which rights lapse after repayment or on the sale.
What you need to watch out for: Check whether the residual debt figures stated really include all fees and payoff amounts. Clarify which financing provider ranks first with regard to incoming payments, revenue or other collateral. Make sure that, after repayment, direct debit rights, assignments and other collateral are also demonstrably terminated or released.
For the period from 01.06.2020 to 31.05.2022 you were awarded a ZIM grant of 45% of eligible costs, up to a maximum of EUR 238,272. Although the grant is in principle non-repayable, it can be revoked with retroactive effect, reclaimed and made subject to interest under section 49a VwVfG in the event of breaches of the earmarking, the reporting and use-of-funds evidence, or the competitive procurement rules. Until the final statement has been confirmed, the amount should therefore not be treated as a cash-like item – i.e. as freely available cash that increases the purchase price.
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What is this? An indemnity obliges the seller to compensate you for a later reclaim, including any interest. With a purchase price retention, part of the purchase price is initially not paid out until it is established that no repayment obligation can arise from the ZIM grant.
This is what you get from your lawyer/adviser: The lawyer drafts a specific indemnity clause and a provision setting out which part of the purchase price is retained until which evidence is provided, and under what conditions it is paid out.
What you need to watch out for: Check whether the earmarking requirements, the reporting and use-of-funds evidence have been fully complied with and whether the contracts were awarded competitively. Set out clearly which reclaims and interest are covered by the indemnity. Define unambiguously which confirmation of the final statement triggers payment of the retained purchase price.
The tax status overview still shows the special audit for 2020 as ongoing, but names neither the subject matter of the audit nor the current status of proceedings or possible additional tax. This leaves it open for you which tax payments could still arise from that earlier year. In a share deal – the sale of the shares in the company – this risk stays with the company sold (the target); in an asset deal – the sale of individual assets – potential liability under section 75 AO must also be examined.
Who helps: Your tax adviser – we coordinate this for you
What is this? Section 75 AO governs, on the transfer of a business or part of a business, whether the buyer can be liable for certain business taxes of the seller. A tax indemnity allocates this risk to the seller in the purchase agreement; an escrow additionally secures payment through a part of the purchase price held temporarily in a trust account.
This is what you get from your lawyer/adviser: Your tax adviser clarifies and documents the subject matter of the audit, the status of proceedings and the possible tax burden, as well as the applicability of section 75 AO. On that basis, the lawyer can draft a specific tax indemnity and, if required, an escrow arrangement.
What you need to watch out for: Check that the indemnity expressly covers all outcomes of the 2020 special audit and applies for long enough. Determine the size of any escrow, when it is released and who decides on payments to the tax authorities. In an asset deal, whether and to what extent section 75 AO applies must be examined separately.
The commitment letter – the written financing and transaction undertaking – from Textilmuster GmbH refers to a short-term interim loan of EUR 500,000 as well as exclusivity and an earn-out, i.e. a portion of the purchase price that depends on the company's later performance. Alongside this, there is a loan and security agreement with C. Musterhaus GmbH & Co. KG, likewise for EUR 500,000, which refers to a participation "via Textilmuster GmbH". From the documents available it is therefore not clear whether you received EUR 500,000 in total or two separate loans amounting together to EUR 1,000,000 – which is material to determining your debt correctly for the sale.
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What is this? An interim loan is short-term financing that bridges the period until a planned transaction or permanent financing. What matters here is whether the commitment letter and the loan agreement describe the same financing or create two independent obligations.
This is what you get from your lawyer/adviser: You receive a reconciled overview of documents and payments showing which party committed and paid out which amount, and what repayment and security obligations exist.
What you need to watch out for: Check in particular the contracting parties, the signature and drawdown dates and the tranches named. Also reconcile assignments, collateral and the reference to the participation "via Textilmuster GmbH", so that the same loan is not counted twice and a separate loan is not overlooked.
For 2019 and 2020 the commercial results from the annual financial statements and the figures extracted from the tax documents contradict each other: in part, losses stand against positive tax results. This may be caused by tax adjustments or by incorrectly recognised signs in the automated text recognition (OCR). As long as the differences are not clarified, you can reliably assess neither the actual earnings position nor the tax burden – both of which are relevant to the purchase price and to any financial warranties.
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The framework agreement with Muster Sport GmbH & Co. KG contains a schedule of charges – fixed euro amounts that you have to pay if you breach shipping or packaging requirements. This contractual liability goes beyond the statutory warranty and can lead to additional costs, which represents a latent liability risk for a buyer.
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The documents provided contain only a credit application showing total revenue, but no breakdown by individual customer. You therefore cannot currently assess whether a large share of revenue depends on a few customers – this customer concentration risk matters to buyers, because the loss of a key customer could put a significant dent in revenue.
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Taken together, your Sportverbund contracts result in ongoing gross-to-net deductions – deductions from gross revenue down to the net proceeds actually retained – of at least 7.50%. These comprise a 4.80% central settlement commission for centralised payment processing, a 1.00% bonus, a 1.00% advertising cost subsidy (WKZ) and a 0.70% ZR-Plus commission; further early payment discounts or other deductions may be added. If your valuation is built on gross revenue, this can materially overstate the sustainable margin – the share of revenue that can be earned as profit in the long run.
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What is this? Outstanding accruals are charges that have economically already arisen but have not yet been fully settled or paid. Depending on their classification, they either change net working capital (NWC) or are deducted directly from the purchase price as a debt-like item.
This is what you get from your lawyer/adviser: You receive a complete schedule of the outstanding Sportverbund accruals, their allocation to NWC or debt-like items, and the corresponding balance confirmations from Sportverbund as evidence.
What you need to watch out for: Check whether all bonuses, advertising cost subsidies, commissions, early payment discounts and returns have been captured; whether the same item is not counted twice, both in NWC and as a debt-like item; and whether the confirmed Sportverbund balances agree with the accruals in your accounts.
The key contracts with Sportverbund and Sportmarkt Deutschland GmbH contain no change-of-control clause (CoC) – no provision that triggers special rights such as a consent requirement or termination simply because of a change of ownership. The customer protection agreement with brandmuster GmbH, by contrast, contains a non-compete or post-contractual restriction that can limit certain business even after the transaction, together with a contractual penalty for breaches. In addition, the Sportverbund bonus agreement terminates automatically if an insolvency application is filed; these points can affect the buyer's freedom of action and its economic planning.
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What is this? A change-of-control clause (CoC) governs what happens if the owners of, or control over, your company change. It can, for example, give the other contracting party a right of consent or termination; where there is no such clause, it should still be checked whether other contractual provisions have similar consequences.
This is what you get from your lawyer/adviser: The lawyer reviews the contracts concerned, drafts the written confirmations and waivers for the contracting partners and prepares the necessary provisions for the SPA (company purchase agreement).
What you need to watch out for: Check whether, in addition to expressly designated CoC clauses, there are also special termination rights, consent requirements or prohibitions on transfer. In the case of the customer protection agreement, clarify in particular the customers affected, the scope in time and substance, and the amount of the contractual penalty and what triggers it. Determine which confirmations or waivers must be in place before closing.
You have to keep agreed quantities of goods available for Muster-Idee GmbH & Co KG, even though the call-off contracts – blanket agreements without a firm order – do not oblige Muster-Idee GmbH & Co KG to purchase. You therefore bear the risk that capital remains tied up in the goods, that the goods are not sold, or that they lose value through ageing or becoming outdated (obsolescence risk). This is relevant to the sale because such stock can affect the actual value of your inventory and hence the purchase price.
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The proprietary ROPT® software provided by SELLBOOST GmbH – a vendor-tied solution that is not freely available – is not secured by any documented transfer of rights or data portability that would allow you to migrate your data in full to another provider. From Admuster Marketing GmbH you hold only simple, non-exclusive rights of use, and the service provider is not obliged to hand over the editable open source files. With the invoicing portal of raw Rechenzentrum Muster GmbH, too, ownership, copyright and usage rights in the programs remain with the service provider. As a result, it may become more difficult for you to continue using the marketing and analytics assets concerned after the sale, to integrate them into other systems, or to change service provider.
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Max Mustermann and Musterfrau, as shareholders, resolved changes to their own remuneration – which means there is self-benefit, i.e. a personal financial interest in their own decision. The addendum to Max Mustermann's employment contract also involves self-dealing – he represented MUSTERFIRMA GmbH as managing director while at the same time being the employee benefiting from it. For the sale it is therefore relevant whether the resolutions and the contract addendum are valid and whether the remuneration withstands an arm's length comparison, i.e. corresponds to market terms between independent parties.
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What is this? Self-dealing exists where the same person acts on both sides of a contract – here as representative of MUSTERFIRMA GmbH and at the same time as the employee benefiting from it. Because of this conflict of interest, it may be questionable whether the representation was permissible and the contract addendum is valid.
This is what you get from your lawyer/adviser: The lawyer provides you with a legal assessment of the resolutions and the contract addendum and, if necessary, a legally sound approval or ratification resolution.
What you need to watch out for: Check who was entitled to validly represent MUSTERFIRMA GmbH in the contract addendum, whether an exemption from the prohibition on self-dealing was in place, and whether subsequent approval is possible. Also record transparently how the level of remuneration was decided and why it is in line with the market.
Your standard employment contract provides for a contractual penalty of EUR 5,000 per breach or per month of impermissible employment. Because of the flat amount and the absence of any recognisable cap, the clause could be unreasonable under standard terms law – the rules governing pre-formulated standard contracts – and therefore open to legal challenge. This is relevant to the sale because the clause may not be enforceable as intended and may have to be amended.
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The two personnel lists contradict each other: one shows 15 employees and annual remuneration of EUR 588,373.40, the other 16 employees and EUR 598,929. In addition, hourly wages and interns' remuneration are in part not extrapolated to a full year (annualised), which is why the payroll totals – overall personnel costs – are not directly comparable. It is therefore unclear how high normalised personnel expenses – the personnel costs to be expected on a lasting basis – actually are, and how they affect EBITDA, i.e. earnings before interest, taxes, depreciation and amortisation.
Who helps: Your auditor/trustee – we coordinate this for you
Your commercial lease runs for an indefinite term but can only be terminated on 12 months' ordinary notice. This period is longer than the statutory notice period for business premises and therefore also ties a buyer in for longer if it takes over the lease. This is relevant to the sale because the buyer may factor this longer lease commitment into its valuation.
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Your inventory list mixes individual line items and subtotal lines for each article and shows different quantities for the same SKU (unique article number). This makes it only partly possible to follow how the value of your inventories was calculated for each storage item, and there is an increased risk of error. This matters for the sale because the buyer cannot reliably verify the inventory value shown.
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The inventory valuation as at 1 January 2022 was only prepared on 7 October 2022 and is therefore not a reliable basis for closing NWC (net working capital at completion – the operating net current assets that affect the final purchase price). The list mixes individual line items and totals, contains historical storage locations and consignment stock at MUSTERFIRMA USA Inc. – goods stored there that do not necessarily belong to the company – and shows unexplained quantity differences as at the cut-off date. As a result, inventories may be valued incorrectly or counted twice, which can distort the purchase price.
Who helps: Your auditor/trustee – we coordinate this for you
What is this? Closing NWC is the operating net working capital as at completion of the sale and can increase or reduce the final purchase price. The cut-off is the clear demarcation in time determining which stock and goods movements are recorded before or after the agreed reference date.
This is what you get from your lawyer/adviser: You receive transparent stock count and reconciliation documentation as a basis for calculating the purchase price, together with clearly defined rules for the treatment and valuation of inventories in the purchase agreement.
What you need to watch out for: Check that each item is recorded only once and can be allocated to a current storage location and to an unambiguous owner. Reconcile goods movements and sales around the cut-off date with the inventory list. Record which consignment or unsaleable stock is excluded and which valuation discounts are applied.
The warehouse lease for around 761 m² with a monthly charge of EUR 5,671.40 plus VAT ties up additional money: you have to provide a cash deposit of three months' net rent and a dilapidation guarantee – security for the potential cost of later restoring the premises to the agreed condition. The guarantee is also intended to remain in place if the lease is transferred; in addition, the landlord may terminate for cause if you do not use the premises exclusively for VAT-liable turnover. On a sale or a restructuring, these points can reduce the purchase price available or strain your liquidity, because they can be treated as debt-like – similar to financial debt – or as tied-up cash.
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What is this? "Debt-like" describes obligations that are not necessarily reported as classic bank debt but which, on a sale, can be deducted from enterprise value in the same way as debt. Net working capital (NWC) is the capital tied up short-term in day-to-day business; depending on the purchase price mechanism agreed, a deposit may be taken into account there.
This is what you get from your lawyer/adviser: The lawyer drafts a clear provision in the purchase agreement on how the guarantee, deposit and dilapidation costs are treated in the purchase price. They also prepare or negotiate the agreement with the landlord on the release or replacement of the existing security.
What you need to watch out for: Check which specific restoration works the lease requires and what costs these may entail. Avoid the deposit or restoration costs being deducted twice, both as debt-like and within NWC. Also record in writing the timing and conditions for release or replacement of the security, and the VAT-liable use.
Your warehouse/office space of around 761 m² in Neumünster can be terminated on twelve months' notice and is therefore not secured for the long term. You rent the office space of around 207 m² at Musterweg 63 A for EUR 4,891.02 per month from MUSTER Plus Holding GmbH; this related-party arrangement – a contract with an affiliated company – ends automatically when the holding company's head lease ends. This is material to the sale because a buyer cannot take over either of the two key locations on a long-term secured basis, and the Musterstadt premises additionally depend on the holding company and its landlord.
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What is this? A change of control occurs where, through the sale, a new owner obtains control over your company. In the case of leases and subleases, such a change can trigger consent requirements, termination rights or automatic termination; here, in particular, continued use of the Musterstadt premises must be secured.
This is what you get from your lawyer/adviser: Your lawyer prepares or negotiates a direct lease or written landlord consent that expressly governs the continued use of the premises after the change of control.
What you need to watch out for: Check the fixed minimum term and the termination rights for Neumünster. For Musterstadt, the term of the head lease, the automatic termination of the sublease and the landlord's written consent to continuation after the change of control are decisive.
No findings.
The Musterstadt Commissioner for Data Protection and Freedom of Information established that personal data was processed unlawfully through tracking on www.MUSTERFIRMA.de. Although the fee imposed was only EUR 193, an actual data protection breach did occur. This is relevant to your sale because the finding points to weaknesses in consent management – obtaining and administering consents – and in tag management, the technical control of tracking services.
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No findings.
The trademarks used in day-to-day operations, including Towell+, belong to the affiliated MUSTER Plus Holding GmbH and not to MUSTERFIRMA. MUSTERFIRMA uses them solely on the basis of a licence agreement whose licence is expressly limited until 31.12.2021; a secured continuation or change-of-control provision – i.e. continued use after a change of ownership – is not evidenced in the documents provided. It is therefore not secured that you will be able to continue using the trademarks essential to the operating business after the sale.
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What is this? A change-of-control provision determines what happens to a contract if the owners of MUSTERFIRMA change. Here it must ensure that the trademark licence can neither end nor be terminated or restricted as a result of the sale.
This is what you get from your lawyer/adviser: The lawyer prepares either the agreement transferring the trademarks to MUSTERFIRMA or a long-term licence agreement that survives a change of ownership, with renewal rights and the ability to assign it to the acquirer.
What you need to watch out for: Check which trademarks are material to the operating business and who is registered as owner in each case. Make sure that the licence is long-term and irrevocable, expressly permits a change of ownership and contains clear renewal rights. Also ensure that the rights can be transferred to an acquirer.
The documents show at least two disputes over intellectual property (IP), namely with CKM/Bonanno/Greco and with Fitness Muster United Pty Ltd. In both cases the dispute was only to end after a payment and the subsequent withdrawal of applications or actions; however, there is no evidence of performance or of final closure. This is relevant to your sale because it leaves open whether claims or restrictions still arise from these proceedings, and because several IP disputes point to an elevated IP risk.
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What is this? Warranties are binding assurances in the purchase agreement that certain information – for example on the closure of the IP proceedings – is correct and complete. An indemnity additionally provides that the seller assumes specifically identified costs or losses should claims nevertheless arise from the known IP disputes.
This is what you get from your lawyer/adviser: Your lawyer reviews the closure documents and drafts specific warranty and indemnity clauses for the known IP proceedings and any other disclosed IP disputes.
What you need to watch out for: Check whether payment, withdrawal and court closure are fully evidenced for each set of proceedings. Clarify whether any cease-and-desist claims, trademark proceedings, cost claims or other obligations remain outstanding. In the indemnity, set out unambiguously which proceedings and which resulting costs or losses are covered.
MUSTERFIRMA obtains business-critical intellectual property rights (IP) from affiliated companies at low or flat fees: geographically unlimited exclusive Towell+ rights for EUR 2,500 per year, design rights from MUSTER Design GmbH for a flat EUR 2,500, and the Medifit GmbH product for a variable fee of EUR 3.25 per unit. There is no evidence that these terms are at market level – i.e. that they correspond to prices between independent companies. After a carve-out you could face higher stand-alone costs, i.e. higher costs as an independent company, which may make the result presented for the sale look too favourable.
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In 2018, MUSTERFIRMA, MUSTER Design GmbH and MUSTER Plus Holding GmbH transferred all possible rights in the design and functioning of the Aqualux drinking bottle to Mustersolution GmbH. At the same time they undertook not to develop, market or distribute Aqualux or similar systems, either themselves or through third parties. As a bacteriostatic plastic drinking bottle – a bottle with an effect that inhibits bacterial growth – has been developed since 2020 with ZIM funding, this project may fall within the transferred or contractually blocked area unless there is a clear technical demarcation. This is relevant to your sale because Mustersolution GmbH could derive rights or claims against you from it.
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What is this? A freedom-to-operate (FTO) analysis establishes whether you may develop, market and distribute a product without infringing third-party rights or contractual prohibitions. Here it must show in particular whether the ZIM-funded drinking bottle falls, technically or functionally, within the transferred Aqualux rights or the prohibition on similar systems.
This is what you get from your lawyer/adviser: You receive a documented technical and legal demarcation of the two bottle projects. If there is an overlap, the lawyer also prepares or reviews written consent or an agreement with Mustersolution GmbH that clearly resolves the rights concerned.
What you need to watch out for: Compare the design, functioning, development documentation and inventor contributions of both projects. Check the precise scope of the rights transferred in 2018 and of the prohibition on developing, marketing or distributing similar systems. Any consent or clearing of rights required should be concluded in writing before closing.
EU design right 003156090-0001 for the "ST1" sports/fitness towel is documented with an expiry date of 27.05.2021 and is held by MUSTER Design GmbH or a predecessor company. This IP right was the basis for cease-and-desist, information, recall and destruction provisions – claims under which a third party had to stop selling, disclose information and recall and destroy products. If protection has in fact expired, this can weaken your exclusivity for the product and your ability to act against imitators, which matters to a buyer.
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The trademark register extract provided shows the trademarks as held by MUSTER Plus Holding GmbH, not by the target company MUSTERFIRMA GmbH. The documents assigned contain no evidence of any re-registration or documented transfer of these trademarks to MUSTERFIRMA GmbH. This constitutes a finding of an ownership discrepancy on the register side.
The licence in Community design 007260146-0001 – the protected design – was not granted directly to MUSTERFIRMA but to MUSTER Plus Holding GmbH. MUSTERFIRMA may only use the design for as long as you belong to the licensee as an affiliated company; the sale can end that group membership. Your entitlement to manufacture, distribute and sub-license could then fall away, with only three months remaining after the end of the agreement to sell off stock, after which destruction can be demanded.
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What is this? A change of control is a change in control over MUSTERFIRMA, typically through the sale of the company. As the licence applies only to MUSTER Plus Holding GmbH and its affiliated companies, MUSTERFIRMA may fall outside the permitted group of users as a result of the sale.
This is what you get from your lawyer/adviser: Your lawyer prepares either written consent from Medifit GmbH or a direct licence for MUSTERFIRMA that is robust against a change of control. They also draft the closing condition and clear provisions on sell-off, destruction and audit consequences.
What you need to watch out for: Check whether manufacture, distribution and sub-licensing remain permitted without interruption after the sale. Clarify whether the three-month sell-off period and any demand for destruction fall away or are adjusted. Also determine which audit rights exist and what consequences an audit can have.
The MUSTERFIRMA standard employment contract provides that, for foreign design applications, the managing director of MUSTER Design GmbH is named as author. This can make it unclear who actually created the design, who was entitled to file it and whether the economic rights validly sit with MUSTERFIRMA – this unbroken chain of rights is known as the chain of title. Merely naming an author does not transfer economic rights and can therefore raise doubts on a sale as to whether MUSTERFIRMA may use and transfer its designs without restriction.
Who helps: Your M&A lawyer – we coordinate this for you
What is this? The chain of title is the unbroken documentation of how intellectual property rights passed from the actual inventor or designer to MUSTERFIRMA. An IP assignment is the contractual transfer of those rights; naming an author alone is not sufficient.
This is what you get from your lawyer/adviser: The lawyer prepares an overview of the chain of title for each IP right, assesses the corrections required and drafts standardised IP assignment clauses in favour of MUSTERFIRMA.
What you need to watch out for: Check in particular the actual inventor or designer, the registered applicant and the written evidence of transfer. Also clarify whether existing foreign design applications are wrongly allocated and have to be corrected.
The key EU word mark MUSTERFIRMA 018472530 – protection for the name MUSTERFIRMA in the EU – and a German figurative mark belong to MUSTER Design GmbH and not to MUSTERFIRMA GmbH. The licence agreement provided governs only exclusive design usage rights retroactively for 2020 and does not clearly identify the products and trademarks covered. Your company is therefore permanently dependent on an affiliated company for a central corporate asset, which calls into question legally secured use after the sale.
Who helps: Your M&A lawyer – we coordinate this for you
What is this? A trademark licence allows MUSTERFIRMA to use a trademark even though it belongs to another company. "Change-of-control proof" means that this permission does not end simply because of the sale or a new owner; transferable and sub-licensable means that the rights can be passed on where required.
This is what you get from your lawyer/adviser: The lawyer prepares either an agreement transferring the trademarks to MUSTERFIRMA GmbH or a long-term licence agreement with an unambiguous schedule of IP rights and the necessary usage, transfer and sub-licensing rights.
What you need to watch out for: First, check that the EU word mark MUSTERFIRMA 018472530 and the German figurative mark are expressly covered. Second, make sure that the rights cannot end or be revoked as a result of the sale or a change of control. Third, clarify unambiguously for which products, territories and types of use the rights apply.
No findings.
No findings.
These opportunities are sitting in your documents – each of them can improve the value or the saleability of your company. We will prioritise them together with you.
By transferring the trademarks and designs to MUSTERFIRMA – or alternatively agreeing an exclusive, unlimited licence that also survives a change of control – you secure the company's core operating value. Fully documented chains of title create clarity for buyers and reduce the risk that open IP questions lead to an aborted deal, an IP escrow or a purchase price discount.
With a bank-confirmed overview of financial debt, cash and collateral, you create clarity about the actual net financial position at an early stage. Repayment confirmations, releases of collateral, change-of-control consents and an agreed payment sequence reduce the number of open points at completion. This forestalls blanket deductions by buyers and prevents unresolved debt or releases from making the closing unnecessarily difficult.
A sell-side quality of earnings review creates transparency about how robust your EBITDA is. Customer, channel and product analyses, a transparent bridge from gross to net revenue and the reconciliation of personnel costs remove key uncertainties for buyers. A physical stock count and clearly documented rules on cut-off and obsolete stock also help to set a robust target value for the net working capital needed to run the business – and thereby reduce the scope for discounts or buyer-friendly purchase price adjustments at completion.
With a structured tax fact book you create transparency about the VAT group history, OSS returns, the open audit and loss carryforwards. This allows you to delimit tax risks clearly and assess them transparently – reducing the risk that a buyer demands an unlimited tax indemnity or additional security.
You create certainty for continued operations at an early stage by extending key contracts, entering into direct site agreements on market terms and obtaining the necessary consents from landlords and financing providers. This reduces uncertainty around contract or site disruptions and forestalls additional conditions or retentions at completion.
With a corporate clean-up you make sure that your company details in the registers are correct, that ownership can be evidenced without gaps and that the necessary consents or waivers are in place. A title certificate built on this confirms that clean legal starting position to buyers. This reduces completion risk, protects the closing timetable and forestalls far-reaching warranty and liability claims.
You strengthen the certainty of closing by resolving open compliance issues cleanly in advance. This includes remedying data protection issues, complete grant documentation, confirmations of account holders and site-specific insurance addenda. This reduces the risk that buyers demand additional protection, reserves or a postponement of the closing.
You create clear, market-standard foundations for all contracts with related parties – in particular for IP, office space, accounts and other services. Transparent arm's length documentation and robust new contracts make your stand-alone earnings position clearer and reduce the scope for blanket cost deductions or additional leakage protection demanded by buyers.
With a controlled valuation bridge you can tie part of the enterprise value you are seeking to clearly measurable conditions, instead of letting uncertainties translate immediately into a final purchase price discount. A short, objectively defined earn-out or a secured vendor loan is suitable for this. It allows the low EBITDA base and the patchy revenue quality to be bridged in a targeted way, without hiding these points in the sale process.
We coordinate every task with you – you don't have to shoulder any of it alone.
| Task | Urgency | Who helps |
|---|---|---|
| Provide the current trademark licence or transfer | High | Your M&A lawyer |
| Review customer contract risks and post-contractual restrictions manually | High | Your M&A lawyer |
| Provide current register and identity documents | High | Your M&A lawyer |
| Validate the net revenue and NWC impact manually | High | We do |
| Clarify VAT-liable use and collateral in writing | High | Your M&A lawyer |
| Clarify release of personal guarantees with the bank | High | Your M&A lawyer |
| Provide customer revenue and receivables analysis | High | We do |
| Provide documents on the VAT group and structural history | High | Your tax adviser |
| Provide IP transfer and development documents for the drinking bottles | High | Your M&A lawyer |
| Provide a reconciled employee bridge as at the reference date | High | Your auditor/trustee |
| Provide documents on the claim asserted | High | Your M&A lawyer |
| Request a separate stock overview of goods reserved for customers | High | We do |
| Clarify consent to IP use after a change of control | High | Your M&A lawyer |
| Address the lease notice period in the purchase agreement | High | Your M&A lawyer |
| Provide a net debt list as at the reference date | High | Your auditor/trustee |
| Provide intercompany IP agreements and licence terms | High | We do |
| Clarify the status of the 2020 special tax audit | High | Your tax adviser |
| Clarify trademark transfer or a robust licence | High | Your M&A lawyer |
| Review the equity bridge classification of the receivable | High | We do |
| Request a robust stock count as at the reference date and cut-off documents | High | Your auditor/trustee |
| Request current IP documents on the EU design right | High | Your M&A lawyer |
| Provide contracts on software and marketing assets | High | Your M&A lawyer |
| Have CoC clauses in financings reviewed legally | High | Your M&A lawyer |
| Provide reconciliations and original assessments for 2019/2020 | High | Your tax adviser |
| Request evidence of the closure of the IP proceedings | High | Your M&A lawyer |
| Request a raw inventory list with consistent valuation logic | High | Your auditor/trustee |
| Clarify how site terms are secured before closing | High | Your M&A lawyer |
| Provide the IP chain of title and assignments for designs | High | Your M&A lawyer |
| Provide documents on short-term financings and collateral | High | Your M&A lawyer |
| Provide signed loan and drawdown documents | High | We do |
| Review the liability regime in the framework agreement with Muster Sport GmbH & Co. KG | Medium | Your M&A lawyer |
| Review and amend the standard employment contract under employment law | Medium | Your M&A lawyer |
| Provide grant documents and the status of use of funds | Medium | Your M&A lawyer |
| Request evidence that the tracking breach has been remedied | Medium | We do |
This report is the starting point, not the end: we at majiq will go through every point together with you – at your pace, step by step. You don't have to work anything out on your own. Get in touch – we'll plan the next steps together and bring in the right specialists wherever they're needed.
203 documents reviewed in total.
| Shareholders' list | MUSTERFIRMA-GmbH-Gesellschafterliste.pdf |
| Commercial register extract | Musterstadt-HRB-123456-MUSTERFIRMA-GmbH.pdf |
| Bank statement (evidence of share capital payment) | MUSTERFIRMA-GmbH-Stammeinlage-2016.pdf MUSTERFIRMA-GmbH-Stammeinlage-2017.pdf |
| Shareholding overview / list of subsidiaries and participations | MUSTERFIRMA-MUSTER-Company-Matrix.png |
| Certificate of incorporation | MUSTERFIRMA-GmbH-Gruendungsunterlagen-mit-Gesellschaftervertrag.pdf |
| Service contracts of management/corporate bodies | 200330-Vollzeit-AV-Max-Mustermann.pdf 200330-Vollzeit-AV-Erika-Musterfrau.pdf |
| Grants / financial assistance + status of use of funds | MUSTERFIRMA-GmbH-Bewilligung-Umweltbonus.pdf |
| Tax audit reports (all types of tax) | MUSTERFIRMA-GmbH-Aussenprüfung-Betriebsprüfung-2016-2019.pdf |
| Tax groups (VAT / corporate income tax / trade tax) | MUSTERFIRMA-MUSTER-Umsatzsteuerliche-Organschaft-1.pdf MUSTERFIRMA-GmbH-Teilnahme-EU-One-Stop-Shop-Steuervereinbarung.pdf |
| List of creditors with amounts, interest rates and repayment dates | MUSTERFIRMA-GmbH-Liste-Glaeubiger.xlsx |
| Annual financial statements / annual reports of the target company | Jahresabschluss-2020-Musterfirma-GmbH.pdf Jahresabschluss-2019-Musterfirma-GmbH.pdf |
| Bank details + bank mandates | MUSTERFIRMA-GmbH-Bankverbindungen.xlsx MUSTERFIRMA-Übersicht-der-Bankmandate.xlsx |
| Loan documents (bank + intercompany) | MUSTERFIRMA-GmbH-Vertrag-RevShare.pdf MUSTERFIRMA-GmbH-Vertrag-CashFlow.pdf MUSTERFIRMA-GmbH-Vertrag-TradeFin.pdf Darlehensvertrag_Mustermann_MUSTERFIRMA.pdf MUBA-Kontokorrentkredit.pdf MUSTERFIRMA-GmbH-Kreditvertrag-NordPay.pdf Darlehen- und Sicherungsvereinbarung.pdf |
| Loss carryforward assessments + history under sections 8c/8d KStG | KSt-Verlustvortrag-Bescheid-2019.pdf 93636 - GewSt-Verlustvortrag-Bescheid 2020.pdf |
| Customer list with revenue share | MUSTERFIRMA-GmbH-Geschaeftskundenliste.xlsx |
| Logistics agreements | MUSTERFIRMA-Lagervertrag.pdf MUSTERFIRMA-GmbH-DHL-Konditionen-DE.PDF |
| Non-compete undertakings | MUSTERFIRMA-GmbH-Markenhaus-Kundenschutzvereinbarung.pdf |
| Service, maintenance and consultancy agreements | MUSTERFIRMA-GmbH-FitSteps.pdf MUSTERFIRMA-GmbH-Mercano-Sellboost.pdf MUSTERFIRMA-GmbH-Vertrag-Social-Media-Admuster.pdf MUSTERFIRMA-GmbH-Sport2000-ZR.pdf MUSTERFIRMA-GmbH-Mandatsvereinbarung-Weigert.pdf MUSTERFIRMA-GmbH-RAW-Dienstleistungsvertrag.pdf MUSTERFIRMA-GmbH-Agreement-GreenBens.pdf |
| Joint ventures / cooperation agreements | MUSTERFIRMA-GmbH-Vitacheck.pdf MUSTERFIRMA-GmbH-HBM-Bank-Teilnahme.pdf MUSTERFIRMA-GmbH-Kooperationsvertrag-NordWater-DSV.pdf |
| Advertising agreements / influencers / sponsoring | MUSTERFIRMA-Kooperationsvereinbarung-be-a-brand.pdf |
| Supplier agreements with top partners | 200827-Aufhebungsvertrag.pdf |
| Supplier/purchasing terms including advertising cost subsidy, bonus and annual agreements | MUSTERFIRMA-GmbH-WKZ-Vereinbarung-Sportverbund.pdf MUSTERFIRMA-GmbH-Sportverbund-WKZ-Vereinbarung.pdf MUSTERFIRMA-GmbH-Sportverbund-Bonusvereinbarung.pdf |
| Commercial agents / distributors / sales partners | ALT_Liefer-Rahmenvereinbarung-Süd-Korea.pdf ALT_Liefer-Rahmenvereinbarung-Tschechien.pdf ALT_Liefer-Rahmenvereinbarung-Kroatien-Slowenien.pdf Fulfano-Rechtsverbindliche-Vereinbarung.pdf Alt_Liefer-Rahmenvereinbarung-Kirgisistan-Kasachstan.pdf MUSTERFIRMA-GmbH-Sportverbund-ZR-Plus-Vereinbarung.pdf Fulfano-Rechtsverbindliche-Einigung.pdf Fit-Sport-Nordic.pdf ALT_Iran-Liefer-Rahmenvereinbarung.pdf ALT_Rahmenvereinbarung-Mexico.pdf ALT_Liefer-Rahmenvereinbarung-Arabischer-Raum.pdf SPORTIQO-Liefer-Rahmenvereinbarung.pdf Prime-Ace-Liefer-Rahmenvereinbarung.pdf |
| Research and development agreements | MUSTERFIRMA-GmbH-Kooperationsvereinbarung-Fermlab.pdf MUSTERFIRMA-GmbH-Bestätigung-Angebot-Fermlab.pdf |
| Anonymised employee list | MUSTERFIRMA-gmbH-Personalliste-anonymisiert.xlsx Personalliste_anonymisiert.xlsx |
| Leases | MUSTERFIRMA-GmbH-Mietvertrag-Parkplaetze-Beispiel-Vermoegensverwaltungs.pdf MUSTERFIRMA-GmbH-Untermietvertrag-MUSTER-Holding-Musterweg63a.pdf MUSTERFIRMA-GmbH-Lagermietvertrag.pdf |
| Fixed asset register | MUSTERFIRMA-GmbH-Inventarübersicht.xlsx |
| Inventory as at the reference date (raw materials/work in progress/finished goods) | MUSTERFIRMA-Lagerbewertung-zum-221009.xlsx |
| Overview of insurance policies | MUSTERFIRMA-GmbH-Uebersicht-Versicherungen.xlsx |
| Software inventory | Technologien- Informationsverarbeitung-Musterfirma.xlsx |
| Patents, trademarks, domain names, IP portfolio | MUSTER-Design-Gebauchsmuster.xls |
| IP licences granted / acquired + disputes | Nutzungsrechtevertrag_211019.pdf 211001-Lizenzvereinbarung-Massage-Tool.pdf |
| Official approvals / CE registrations | Muster Overseas Declaration of Conformity.PDF |
Due diligence — careful review of the target company ahead of a transaction.
Share deal — purchase of the shares (stock/quotas) in the target company.
Asset deal — purchase of individual assets instead of the shares.
CP (condition precedent) — a condition that must be satisfied before completion.
Warranty — a contractual assurance by the seller as to certain facts.
Indemnity — an undertaking by the seller to cover a specific risk.
Risk rating:
Low — low risk – we keep an eye on it together.
Medium — relevant risk – we deal with it in the purchase agreement; we prepare that with you.
High — material risk – we resolve it before the sale, otherwise it jeopardises the transaction.