Due Diligence

Before buying a business or any assets, you must order Due Diligence. This is a comprehensive check that allows you to collect information about the object that the company intends to purchase, which mainly concerns the financial and legal aspects of the business. Currently, this service is becoming more and more popular in business circles. More and more owners, managers of companies resort to the service of conducting Due Diligence when buying/selling enterprises, concluding long-term contracts, etc.

It is necessary to justify financial investments. In addition, due diligence allows you to predict tax and financial risks, possible difficulties.

Objectives and Benefits of Due Diligence

The main purpose of the Due Diligence procedure is the security of the planned transaction. Analysis and assessment of all available pros and cons of the deal, a comprehensive audit of possible risks (for example, legal, tax or financial) will allow you to:

Avoid risks associated with buying or selling a business, concluding an important agreement. You will not be afraid of such risks as: the risk of buying a company (its shares) at an inflated cost, the risk of initiating lawsuits, the risk of losing intellectual property, and much more.
The results of Due Diligence, the report and expert recommendations after it are a source of ways for the further development of the investment object.
For investors, it is also a way to protect their interests.
For sellers, it is possible to avoid claims from the buyer. Since the data provided by the seller will be confirmed by experts.

One of the main purposes of such a service is to determine the financial condition of the business being purchased. The potential owner receives information on accounting, tax accounting, the cadastral state of affairs, as well as a conclusion on the investment attractiveness of the asset.

The Due Diligence service allows you to determine:

how correctly and timely tax, accounting, and financial reports were prepared;
what is the degree of competitiveness of the enterprise;
level of management competence.

The audit is divided into two main parts: legal and tax.

The results of both directions will give an idea of the expediency of future investments. With their help, you can form an objective opinion about how justified these investments are. Marketing, operational, and financial audits can also be conducted for enterprises of various profiles. In any case, the price of due diligence is lower than the possible risk.

Legal Due Diligence

In this case, the Due Diligence service is aimed at assessing all kinds of legal risks. This is done in order to adequately assess possible difficulties, as well as to exclude or minimize any negative consequences from the conclusion of the agreement or the purchase of assets. For example, legal due diligence finds out whether there are no lawsuits in the company, whether its property has been partially or completely seized, what are the risks that the agreement may be invalidated.

This procedure includes:

detailed analysis of founding, primary and other documents;
verification of the authorized capital, the rights of co-founders, the legality of the formation of the company’s assets;
inspection of movable and immovable property of the intended object for investment;
finding out whether there are no lawsuits, seizure of property and other risks;
analysis of possible claims from the company’s creditors or counterparties;
checking the availability of licenses and permits;
confirmation of conscientious compliance with labor, migration and other legislation;
analysis of document flow and work of management bodies.

In what situations are Due Diligence services required?

Such a multifaceted check helps to reduce risks or avoid them altogether in any transactions with counterparties. The price of due diligence is small compared to the costs or losses it prevents. But there is a list of situations when an audit cannot be done without. First of all, you should contact specialists and carry out an inspection:

with the planned purchase of other companies, their merger, takeover;
if the company decided to buy securities or shares of another company;
when buying various types of real estate;
before starting work with new partners;
in cases where it is necessary to lend funds;
if targeted investments are planned.

In addition, verification is required in any situations where the correctness of the information provided by the parties may affect the outcome of the agreement. This is especially true when it comes to financial transactions or large amounts of property.

Cost of Due Diligence service

Lawyers of ICC Bondar offer to conduct Due Diligence at a price that is much lower than possible losses or risks. Our employees are competent in various areas of law, so they will be able to assess the possible consequences of the agreement from all sides. In addition, we work closely with other experts, so we guarantee the most complete information about the property or business being purchased.

After the inspection, we will provide the client with a detailed report in a convenient form

If necessary, we will clarify its content and indicate information that can be used to obtain more favorable terms of the agreement. We also guarantee:

prompt inspection of urgent contracts – in the shortest possible time;
complete confidentiality and non-disclosure of the obtained results to third parties;
detailed consultations on any issues related to the inspection and its results.

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