Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Due diligence definition

What does Due diligence mean? In legal practice, due diligence describes (1) compliance steps to prevent offences; and (2) pre‑transaction investigation in corporate and finance work. As a statutory defence to many strict‑liability and regulatory offences (for example under the UK Consumer Protection from Unfair Trading Regulations 2008 and the Food Safety Act 1990, and under Ireland’s Consumer Protection Act 2007 and food legislation), it requires the defendant to show that all reasonable precautions were taken and all due diligence was exercised to avoid the commission of the offence. Depending on the statute, this may place a legal or evidential burden on the defendant,...

AIM admissions (London Stock Exchange): business, financial and legal due diligence, verification, and directors’ and advisers’ liabilities

Published by a LexisNexis Corporate expert

Practice notes

As part of an application for an initial Admission to trading on AIM (AIM admission), a thorough review is undertaken into the company’s financial and commercial standing, its prospects, and the risks inherent in its business.

Due diligence for an AIM admission is typically broader and deeper than on an acquisition. In an acquisition, a buyer may tolerate certain matters because contractual protections apply; on an AIM admission such protections are absent, and the company, its directors and the nominated adviser (nomad) must comply with the AIM Rules for Companies (AIM Rules) and the AIM Rules for Nominated Advisers (Nomad Rules).

In addition, the company and its directors may incur civil and criminal liability if any published information is inaccurate or misleading. See Practice Notes: Misleading statements under the Financial Services Act 2012 and Misleading impressions under the Financial Services Act 2012.

Why do due diligence?

There are several reasons to undertake a comprehensive and detailed due diligence exercise as part of the AIM admission process...

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Web page updated on 21/05/2026

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