Due diligence is an independent detailed investigation or assessment made on the target entity / asset to understand the potential risks involved in a proposed transaction. Due diligence is an independent detailed investigation or assessment made on the target entity / asset to understand the potential risks involved in a proposed transaction. Due diligence is a process of verification, investigation, or audit of a potential deal or investment opportunity to confirm all relevant facts and information. Due diligence is completed before a deal closes to provide the buyer with an assurance of what they’re getting. Due Diligence is commonly used as a pre-investment intelligence tool by investing partners, in order to obtain an independent and sophisticated report concerning the investee’s credentials. Due diligence refers to the process of research and analysis that is done before an acquisition, investment, business partnership or bank loan in order to determine the value of the subject of the due diligence or whether there are any major issues or potential issues. Investors, bankers and acquirers rely on due diligence as a standard of care during Mergers and Acquisitions. We at Consultavenee.com provide Due Diligence assistance to investors (buy-side) as well as, vendors (sell-side) across the transaction cycle
The three main categories of due diligence are legal, financial and commercial. Since due diligence involves the study of the entire functioning of the targeted entity or the asset, it becomes essential to approach the investigation with a multi-dimensional view. This involves providing due importance to the business, legal, tax, financial and other relevant aspects. The ultimate objective is to embrace the benefits and evade from the unexpected liabilities. Thus, it is necessary to follow different types of due diligence such as:
There are several reasons why due diligence is conducted:
The ultimate aim of due diligence is to determine whether to enter into a particular transaction or not
