Due Diligence

Diligence is a term used for a number of concepts involving either a background of a business or a person prior to signing a contract. A common example of due diligence in various industries is the process through which a potential acquirer or a person who wants to do business evaluates a target company or its assets for acquisition.

Due diligence is the reasonable inquiry into a business proposal or through the process of buying or selling something of value. Through this process, individuals and businesses can often determine whether an investment or transaction may be a good deal.

Due diligence is often used in the corporate setting. When a new business venture is being proposed, executors and their legal counsel may require due diligence before proceeding with the deal. Additionally, due diligence may be used when vetting potential executives, business partners, vendors or contractors.

Due diligence is also a process employed when purchasing another business. The process often helps to establish the assets and liabilities of a company and to determine the potential revenue stream to weigh the transaction as a risky or safe business deal. Due diligence is also used to determine the potential authenticity of an investment or to buy a particular piece of property.

Types of Due Diligence?

There are as many as 20 types of due diligence investigation. Some the common types of due diligence are:

• Legal Due Diligence – it basically includes the check on the balance sheet and off-balance sheet liabilities and potential risks involved. Also, an evaluation of transaction and execution is investigated.
• Accounting Due Diligence – this involves ensuring compliance with rules and policies. Analysis of financial trends, conducting audits for financial statements, and review of records are undertaken.
• Taxes Due Diligence – it requires analyzing the tax-related concerns such as analyzing the tax history, impact assessment, tax saving ideas, and tax-free deal options.
• Financial Due Diligence – Review of business strategy, financing, valuation, audits, and feasibility are kept in check.

We have a proven track record of providing the highest quality business background investigations and research to clients nationwide. Knowledge is the crucial factor in staying ahead of the competition. Contrary to popular belief, what you don’t know can hurt you. Many businesses have hidden liabilities and hidden histories or illicit behavior that few other than a private investigator can uncover.