What is Due Diligence
Due Diligence is an organised way to analyse a company that you are acquiring through sale, merger, or another method. One can learn about a company's assets, liabilities, contracts, benefits, and potential problems. It is used for preparing financial statement or private financing transaction or major Bank financing or Joint Venture or initial public offering (IPO) or general risk management. During a Due Diligence process a buyer of lender asses the review all documents to make sure a growth oriented business.
Why is Due Diligence of a Company important?
There main reason to have a Due Diligence of a Company is to make sure you don't overlook anything when acquiring a business or any other substantial transaction. An effective due diligence allows you to see what liabilities, problematic contracts, intellectual property issues, and litigation risks you're assuming. Most of the documents and information on your due diligence checklist is available on request. Once you have the information, it's up to you to analyse it and decide whether it's a good investment.