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What is Due Diligence?

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Have integrity (in the original due diligence), business-report - is a comprehensive verification procedure (analysis) specific investment object with the purpose of obtaining an objective. This procedure includes measures for a comprehensive verification of commercial viability and legality of the planned transaction or investment project. By the way, if you Muscovite and need , then you need to contact business center «DINICA":

Often, this procedure is used when assessing investment risks or purchase of the business. Conducting due diligence helps to ensure that:  

  • you are buying the assets actually exist and are the property of the person who wants you to sell them, and if they have 3 rights of parties;
  • you are buying firm has all necessary permits and licenses to conduct specific types of business;
  • If you are buying the company there are no violations that lead to administrative responsibility;
  • If you are buying the right firm conducted tax and accounting, and whether you buy your company's risk of claims from tax authorities.

What are the types of Due Diligence:

  • Operational. It consists in the analysis of development prospects and the history of the company, evaluating the effectiveness of staff and management, as well as the level of corporate governance;
  • Legal. It involves examination of constituent documents in terms of legality, verification of the formation of the criminal code, verification of the adopted decisions of management bodies of the company, in the assessment of the management powers of the bodies of the company, to verify the share ownership of other companies, in risk assessment of prisoners to challenge the company deals in checking whether the company permits, licenses, authorizations as well as possible risks of their loss, the evaluation concluded by the company agreements, contracts in terms of legal "purity" of risks and their avoidance, in the analysis of potential and existing litigation, etc.;
  • Tax. It is the assessment of the tax burden, main tax risks and of the main taxes, in the detection of risks of claims from tax inspection, etc.;
  • Marketing. He is to estimate the position of the firm in the market and business reputation, in the analysis of existing and potential customers, to identify market trends, etc.;
  • Financial. It is the assessment and analysis: patterns of expenditure and income of the firm, the reliability of the accounting and other reports, the adequacy of the accounting system, dynamics of assets and financial parameters of the company.

Translated by "Yandex.Translate":

Author: Artlife
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