Due Diligence

About Due Diligence

Entrepreneurial activity is the constant work with different parties, the conclusion of transactions, the signing of contracts. I would say that they should not trust the counterparty to work, it is better to be safe and check their reliability. Legal expertise helps in this. And today we will tell.

In accordance with the requirements that must be provided as a reliable partner, all necessary transactions are verified and confirmed. Let’s take a quick look at each moment.

Due diligence of the contract

The entrepreneur may not be aware of the risks that await him. The lack of sufficient liability of the counterparty in the contract may go unnoticed. The entrepreneur was the loser. The agreement was signed.

The specialist assesses whether he complies with the normal norms of the law, which ensures the observance of all your interests, does not contain hidden risks, unclear ambiguous explanations, and whether it guarantees that the contract has the same responsibility on both sides.

After such due diligence, an entrepreneur could sign a contract with a partner.

Counterparty reliability check

Basically, this is based on an honest word. Counterparties for reliability do not check. Well, if you had to work with a bona fide partner. And if not? The risk of an entrepreneur is to deal with dubious transactions. This is a perfectly normal practice – it is a test of its reliability. What is meant?

First, the economic viability of the partner is checked. It is possible to make sure that he conducts business or is at the approval stage in order to find out the composition of the founders, activities, etc. For example, in the state register of lawyers and entrepreneurs. However, if you need to collect more data on counterparties, then you can find all the reports, etc., then you can attract lawyers for examination.

Secondly, you can check whether you have enough authority to make a deal. Maybe this is necessary for everything to be in order?

As a rule, it is necessary to pay attention to the expertise of the partner’s legal reputation. To check whether he participated in the counterparty in any disputes.

Legal expertise of the transaction

Due Diligence (due diligence). Most often, such a test is carried out when selling or buying a business. Major investment in need of such expertise. After all, investors should understand all the pros and cons of the upcoming cooperation.

Legal expertise of the transaction – only part of the procedures due diligence. It also includes financial verification, and marketing, and tax. That is a comprehensive audit. You can read us on the site.

We described the most common situations for legal due diligence. If you have any questions, you can always ask them to our specialists. Good deals and good partners.

One of the forms of investing is investing in an already operating business – by entering a new investor on parity with the previous owners, or by completely transferring control over the existing business.

At the same time, the investor acquires not only real estate, equipment that is associated with this activity, but also gets full control over all current activities (including both its current maintenance and the risks of previous periods).

The report on the results of the due diligence will contain a qualified assessment of all possible risks, legal, tax and organizational, which the investor will be able to take into account when making the final investment decision.