Due diligence is an audit investigation or performance to confirm the facts of a matter under consideration. It’s important to understand the financial status of the company along with the internal control regulation and operations management and it also analyzes and mitigates risk in a systematic way from a business or investment decision. Due diligence examining the company’s number. It also compares the number of overtime and benchmarks them against competitors. Due diligence analyzes the business in a systematic way which helps the person to take the right decision that they want to invest or buy a business or not.
The situation when Corporate Due Diligence Investigations required:-
- For Partnership or Joint Venture Agreements
- For Criminal and civil Litigation History.
- For insurance and Liability.
- For any type of Corporate and Financial Transactions.
- For any Property and Asset Searches
- Evaluating Prospective Clients, Partners, or Executive Appointments
Why Due Diligence is important?
Due diligence is the most essential thing for the investors to get a successful commercial transaction, as it allows them to verify the information related to the business and assess the value of the business. So they can decide whether they have proceeded forward to invest or buy the business. It also permits the investor to determine if there is any risk or barriers with the transaction of the business.
The due diligence is normally performed for two weeks to one month but it can vary according to the complexity of the transaction. Most of the information that completes the due diligence is collected by the seller. If you are considering buying a business then there can are negative risks occurring with the business such as,
- Default on payments
- Market slumps
- Loss of key supplier or customer relationships
- Legal claims
- Loss of key staff
Type of Due Diligence Investigation
Due diligence is a process that is taken by an acquiring firm in order to get complete information about the assets, capabilities, and financial performance of the target company.
- Administrative due diligence
- Financial due diligence
- Asset due diligence
- Human Resources due diligence
- Environmental due diligence
- Taxes due diligence
- Intellectual Property due diligence
- Legal due diligence
- Customer due diligence
- Customer due diligence
- Strategic Fit
Why a Due Diligence report is needed
“Finding a skeleton in the cupboard before the deal is better than finding them later” due diligence is an important process as it helps to make the critical decision about the investment in some organization. it helps to get information about the company’s plans for additional earnings. The due diligence report gives a clear view related to the future progress of the business.
Steps to perform due diligence
- Company Capitalization
- Revenue, Margin Trends
- Competitors and Industries
- Valuation Multiples
- Management and Ownership
- Balance Sheet Exam
- Stock Price History
- Stock Options and Dilution
The benefit of due diligence:-
- Buyers need access to and sight primary information for themselves to make sure that what they have been told is correct.
- Buyers confirm the honesty and forthrightness of sellers by confirming that they have disclosed everything related to the company
- Both Buyers and vendors need a forum for complete disclosure and open discussion of the asset changing hands to provide for a thorough handover and form the basis for integration planning, where the asset is a business.
- Vendors need buyers to have confirmed all information for themselves, to ensure that later claims cannot arise that they have been untruthful or incomplete in their disclosure.
Document required for due diligence
- Memorandum of Association
- Financial Statements
- Property Documents
- Employee Records
- Operational Records
- Tax Payment Receipts
- Utility Bills
- Intellectual Property Registration or Application Documents
- Statutory Registers
- Tax Registration Certificates
- Articles of Association
- Certificate of Incorporation
- Bank Statements
- Income Tax Returns
- Shareholding Pattern
What are the checklists of Due Diligence?
The due diligence checklist helps to analyze a company in a better way and it includes all the areas that have to be analyzed to get the correct information about the business.
- Human resources.
- Future growth potential
- Shareholder value
- The financial ratios
Why VCS is best in due diligence investigations services?
Venus Consulting Solutions Pvt Ltd is India’s No. one business Consulting Company that deals in the field of Brand Protection & Risk Management services and we are providing the best due diligence services in India. We have a team of investigators who are skillful and experienced. our Investigators accumulate all the important information related to the organization such as history and permissions, regulatory destructions, personal and corporate credibility in the market and society, civil litigation, professional and academic records, corporate inconsistency, the bankruptcy of a partner, property-related sources, asset, history related to partnership, another business history, and criminal cases.
In our team, we have investigators that are experts like legal advisors, litigation counselors, cyber-crime, corporate governance experts, members of law enforcement, computer specialists, and ex-business journalists and while performing the due diligence we collect the information about the company in Commercial due diligence, Financial due diligence, and legal due diligence. We provide our service all over India and Our company achieves millstones not only in India but also have the recognition across the world in so many countries like. USA, UK, Egypt, Canada & Mexico, and many more.