A signed term sheet does not transfer legal ownership or authorise a company buyback.
CFO, company secretary and legal counsel
Per transaction
Review charter and investor rights.
Articles and shareholders’ agreement.
Transfers require review of the articles, shareholders’ agreement, rights of first refusal, tag or drag rights, lock-ins and board process. Transfer and transmission should not be confused.
A buyback is a company-funded capital transaction with statutory conditions, approvals, financial tests and restrictions. The exact route and tax treatment require current professional review.
Non-resident buyers or sellers create FEMA pricing, sectoral and reporting questions. Closing funds should not move until the legal route and documents are complete.
| Control | What it covers | Operating rule |
|---|---|---|
| Transfer restrictions | Contractual and charter rights are checked. | Obtain required waivers. |
| Pricing and tax | Valuation, withholding and tax positions are documented. | Review resident status. |
| Company approval | Board, shareholder and statutory steps are completed. | Do not pre-date records. |
| Closing | Money, instruments, filings and registers align. | Issue a closing binder. |
Use a closing conditions checklist. Every condition should identify who confirms it, which document proves it and whether it can be waived.
After closing, reconcile legal ownership, accounting, tax, bank and public filings before announcing completion.
Record the decision, owner, due date and evidence expected. A verbal explanation should become an approved working, board note, contract amendment, statutory filing or reconciliation before the item is treated as closed.
Rules, forms, thresholds and procedures can change. Use the latest official source and the actual company facts rather than copying a prior-year control or another entity’s legal position.
Classify every exception as a timing difference, data error, missing document, legal non-compliance, control-design gap or control-operating failure. This prevents management from treating fundamentally different problems as one ageing list.
The exception file should show amount or exposure, root cause, immediate correction, preventive action, owner and board-escalation threshold. Repeated low-value issues can become material when they reveal weak systems or management override.
Close the item only after the evidence agrees across source documents, books, portal data and management reporting. A screenshot or email promise is not equivalent to a completed filing, lender waiver, signed contract or reconciled ledger.
The control should operate across the full transaction population, not only the samples management expects a reviewer to inspect. For this topic, the key stages are transfer restrictions, pricing and tax, company approval, closing. Each stage should identify the source system, preparer, reviewer, deadline and evidence retained.
A useful management review asks whether the legal document, accounting entry, bank movement, tax treatment and public filing describe the same event. Differences may be valid, but they should be reconciled through a dated working rather than explained from memory during audit or diligence.
Materiality should determine escalation, not whether the company keeps a record. Repeated small exceptions can show weak master data, unclear authority, system bypass or management override. Root cause and preventive action should therefore be documented separately from the immediate correction.
Corporate action should follow the correct sequence: authority, offer or decision, execution, money or asset movement, filing, statutory-register update and public-record verification. Reversing the sequence can create a transaction that is commercially agreed but legally incomplete.
Before any fundraising, restructuring or lender diligence, compare the articles, shareholders’ agreement, board records, statutory registers and MCA data. A mismatch in ownership, director authority or charge status should be escalated before closing documents are signed.