Parking money at the right place, at the right time is a major decision today. And therefore, before relying on any company, what we need is Due Diligence.
Due Diligence involves investigative process that identifies hidden strength & weakness in a business transaction, to check the fulfilment of necessary compliances and to understand the feasibility. But there’s so much at stake, we have to do our due diligence.
Preparation of Due Diligence Report
1. Funding Transactions
2. Merger, Amalgamation & Acquisition
3. Initial Public Offers
5. Intellectual Property
1. Business Due Diligence
2. Financial Due Diligence
3. Vendor Due Diligence
4. Secretarial Due Diligence
5. Legal Due Diligence
Due diligence is an investigation or audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material.
The due diligence of a company can be performed in the following cases:-
Your minimum to maximum signing docs is 2 to 6 weeks.
The financial, legal and compliance aspects of the company, operational data are usually reviewed and the nature and extent of the target company’s contingent liabilities, problematic contracts, litigation risks and intellectual property issues other documents of the company.
The later stage you are and the larger the investment, the more due diligence that is going to happen. There is a fairly direct correlation here.
Once you have received a ‘term sheet’ and have both signed it, due diligence commences. There will be a clause in the term sheet under ‘conditions to closing’ requiring due diligence to happen before you sign the definitive documents and get cash in your bank account.
1. Identifying the objective - merger, acquisition or investment opportunity,
2. Analysing the present and historical financial statements,
3. Taking care of the corporate tax, direct and indirect taxes and quantification of tax risk,
4. Understanding the organization design such as logistics, finance, operations, technologies and corporate strategy.