Due Diligence

“Due diligence” is an analysis and risk assessment of an impending business transaction. It is the careful and methodological investigation of a business or persons, or the performance of an act with a certain standard of care to ensure that information is accurate and to uncover information that may affect the outcome of the transaction. It is basically a “background check” to make sure that the parties to the transaction have the required information they need, to proceed with the transaction. Types of Due Diligence: Business Due Diligence Legal Due Diligence (including Secretarial due diligence) Financial Due Diligence (including Tax due diligence). Works in the ambit of scrutiny of due diligence Compliance with applicable laws Regulatory violations or disciplinary actions Litigation and assessment of the feasibility of pursuing litigation Financial statements Assets – real and intellectual property, brand value etc. Unpaid tax liens and/or judgments Past business failures and consequential debt Exaggerated credentials/Fraudulent claims Misrepresentations or character issues Reputation, goodwill and other intangible assets