When a company enters into a major corporate transaction, such as a merger, acquisition, disposal of assets or strategic investment, attention often focuses on the business and finance teams negotiating the commercial aspects.

Yet, behind every successful transaction is a legal process that must be carefully assessed, structured and managed.

The general counsel is not simply a legal adviser who appears at the end of the process to review documents and confirm that everything is in order.

In a well-governed company, the general counsel is involved from the early stages of the transaction through negotiation, approval, execution and implementation.

The quality and timing of that involvement can determine whether a transaction is merely commercially attractive or is legally sound, properly authorised and capable of delivering the intended business value.

The general counsel’s role can be understood through these main functions: legally structuring the transaction to achieve the company’s commercial objectives; drafting, reviewing and negotiating legal agreements that give effect to the transaction; and coordinating the required legal and corporate approvals.

A major corporate transaction can affect a company’s ownership, assets, finances, employees, clients, governance and long-term strategy.

The general counsel therefore helps ensure that commercial ambition is balanced with legal and governance discipline by assessing whether the proposed transaction complies with applicable laws, including company law, tax requirements, data protection and sector-specific regulations.

Importantly, this assessment should happen at the structuring stage, rather than after the commercial terms have already been agreed.

Article 47 of Law No. 007/2021 of 5 February 2021 Governing Companies in Rwanda provides for the manner in which a company enters into contracts and recognises the authority of directors, the company secretary and other duly authorised persons.

Therefore, the general counsel plays an important role in confirming that transaction documents are executed by the appropriate representatives and that the company’s internal authority requirements have been satisfied.

The objective is not simply to produce a favourable contract, but to ensure that the company understands the risks it is accepting and has appropriate protection against risks that should remain with the other party.

Corporate governance and decision-making

The general counsel plays an important role in supporting the Board in fulfilling its legal responsibilities. For instance, Article 147 of the Companies Law requires directors to act in good faith and in the best interests of the company and to exercise reasonable diligence.

In major transactions, legal counsel helps the Board understand the legal consequences, risks, obligations and available legal options, allowing directors to make informed decisions and effectively fulfil their legal duties.

Additionally, the general counsel works closely with the Company Secretary and relevant business functions to ensure that the appropriate approvals are obtained and properly documented, including Board resolutions, minutes, disclosures and other transaction documents that may be required in such a transaction.

The general counsel is expected to go beyond merely identifying legal risks and to assist the company in achieving its commercial goals in ways that are legally sound.

This role requires an understanding of the company’s strategy, financial position, operational framework, risk tolerance and stakeholder expectations, positioning the general counsel at the intersection of law, business, risk and corporate governance.

The value of a general counsel in a corporate transaction is measured not only by the documents produced at closing, but also by the problems prevented before the transaction is signed.

A transaction that closes on time, receives the necessary approvals, protects the company against foreseeable liabilities and delivers its intended commercial objectives is rarely the result of good fortune.

Rather, it is the result of early legal involvement, effective due diligence, disciplined negotiation and proper corporate governance.

The writer is the Head of Legal and Company Secretary at PTS.