We analyse the company you are going to buy or invest in, so that you can negotiate the price and the contract with verified data and without surprises after completion.
Reviewed by Controlaudit's audit team · Firm registered with the ROAC under no. S1604 · Updated 13 October 2026
A due diligence review is an in-depth analysis of the financial, tax and employment position of a company or business, carried out before a transaction is completed. Its purpose is not to express an opinion on the annual accounts, but to answer the questions an investor asks: what exactly is being bought, what recurring earnings it generates, how much debt and working capital it needs, and what contingencies may surface after completion.
At Controlaudit we support investors and business groups with a practical, decision-focused approach. We work regularly with venture capital and private equity firms, investment funds and family offices, and we bring the financial, tax and employment workstreams together in a single team to provide a comprehensive, consistent view of the transaction. We work on transactions throughout Spain.
Due diligence differs from an audit of annual accounts in its purpose, scope and intended users. An audit is regulated by the Spanish Audit Act (Law 22/2015) and the International Standards on Auditing as adapted for Spain (NIA-ES), concludes with an opinion on whether the accounts give a true and fair view, and is addressed to the entity itself and to third parties in general. Due diligence is a private engagement whose scope is agreed by the client: it focuses on matters that affect the price and the contract, also uses non-accounting information (budgets, contracts, payroll records, minutes), and its report is delivered only to the party that commissioned it. The two are therefore complementary: audited accounts make the review easier, but do not replace it.
No legislation requires a due diligence review. It is good practice that protects the buyer and usually shapes the drafting of the sale and purchase agreement: the seller's representations and warranties, retentions or escrow deposits, and price adjustments. Several pieces of legislation explain why it is so important in Spain.
In tax matters, art. 42.1.c) of the Spanish General Taxation Act (Law 58/2003) makes anyone who succeeds, by any means, to the ownership or operation of businesses or economic activities jointly and severally liable for the previous owner's tax obligations arising from that activity. This liability can be limited if, with the consent of the current owner, the acquirer requests from the tax authorities the certificate of debts provided for in art. 175.2 of the same Act, which must be issued within three months. The rule does not apply to the acquisition of isolated assets that do not allow the activity to continue, nor to acquisitions made within insolvency proceedings.
In employment matters, art. 44 of the Spanish Workers' Statute (Estatuto de los Trabajadores) provides that a change in ownership of a company, workplace or autonomous business unit does not in itself terminate employment relationships: the new employer is subrogated to the previous employer's employment and Social Security rights and obligations, and transferor and transferee are jointly and severally liable for three years for employment obligations arising before the transfer that remain unpaid.
Where what is bought is the company's shares, rather than the business, all contingencies remain within the acquired company itself, so the review is equally necessary. Legal matters and the drafting of the agreement are the responsibility of the parties' legal advisers, with whom we coordinate.
| Situation | Rule | What it means |
|---|---|---|
| Purchase of a business or economic operation | Art. 42.1.c) Law 58/2003, General Taxation Act | The acquirer may be jointly and severally liable for the previous owner's tax debts arising from the activity. |
| Limiting the buyer's tax liability | Art. 175.2 Law 58/2003, General Taxation Act | Certificate of debts requested with the owner's consent; the tax authorities must issue it within three months. |
| Transfer of a company, workplace or business unit | Art. 44 Workers' Statute (RDLeg 2/2015) | The new employer is subrogated, and transferor and transferee are jointly and severally liable for three years. |
| Purchase of shares | Agreement between the parties | Contingencies remain within the company: they are covered through representations, warranties and price adjustments. |
Quality of earnings (normalised, recurring EBITDA), analysis of working capital and its seasonality, net financial debt and debt-like items, off-balance-sheet commitments and the consistency of projections.
Review of the main taxes for the years still open to inspection, tax audits and disputes, related-party transactions, tax losses carried forward and tax credits, and the risks of succession to tax liabilities.
Workforce, contracts and applicable collective agreement, pay and special arrangements, Social Security contributions, disputes and contingencies arising from subrogation under art. 44 of the Workers' Statute.
Reviews tailored to the fund's or family office's timetable and investment criteria, focusing on cash generation, net debt and the points that affect the investment case.
A review commissioned by the seller to organise the information, anticipate the buyer's findings and defend the price in negotiations.
Translating findings into price adjustments, completion accounts or locked box mechanisms, and reviewing completion balance sheets, in coordination with the legal advisers.
Initial meeting to understand the transaction and agree the areas to be reviewed, materiality and the timetable. Signing of the confidentiality agreement and the engagement letter. Indicative timing: 1 week.
We send a prioritised information request list and work on the virtual data room set up by the seller, keeping track of what has been received and what is outstanding.
Financial, tax and employment review, interviews with the target company's management and follow-up of questions and answers. Indicative timing: 3 to 6 weeks depending on size and complexity.
We present the significant matters ranked by impact, with their estimated effect on the price and the proposed treatment in the agreement.
We issue the final report and, if requested, provide support in the negotiation, review the agreement from a financial standpoint and assist with completion adjustments.
No. No legislation requires it, but it is standard practice in sales and investments. It allows you to understand the risks before signing and to negotiate the price and the contractual warranties with verified data.
An audit expresses an opinion on whether the annual accounts give a true and fair view, in accordance with the Spanish Audit Act and the NIA-ES. Due diligence does not express that opinion: it focuses on what affects the transaction, such as recurring earnings, net debt, working capital and contingencies, and its report is only for the party that commissions it.
It depends on the size of the company, the number of areas and how quickly the information is provided. A financial review of an SME can be completed in a few weeks; transactions involving several companies or areas take longer. The timetable is set when the scope is defined.
It is operating profit before depreciation and amortisation, adjusted for income and expenses that are non-recurring, unrelated to the business or not at arm’s length, such as one-off severance payments or shareholder remuneration that differs from market rates. It is the usual basis for setting the price when multiples are applied.
The company remains the same, so it retains all its debts and contingencies, including tax and employment liabilities. That is why they are reviewed before the purchase and covered in the agreement through representations and warranties, price retentions or adjustments.
The buyer may be liable for tax debts arising from the activity (art. 42.1.c of the Spanish General Taxation Act), subject to the statutory exceptions, and is subrogated to the employment relationships (art. 44 of the Spanish Workers’ Statute). The certificate of tax debts under art. 175.2 of the General Taxation Act makes it possible to limit the tax risk.
It is the data room, usually virtual, where the seller makes the company’s documentation available to the buyer. It makes it possible to control who has access, record questions and answers, and keep evidence of the information provided, which is relevant to the contractual warranties.
Before accepting any engagement, we analyse potential conflicts of interest and the independence requirements of audit legislation. If there is a conflict, we will tell you and will not accept the engagement.
Legislation cited on this page, linked to its official text:
General information updated on 13/10/2026. It is not a substitute for an analysis of your specific case.
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