This term in relation to the disclosure of information by a broker to an investor appeared at the beginning of the last century. It was more popular in relation to companies engaged in the financial sector, banking institutions. Today, due diligence is understood as the collection and analysis of information before making a deal.
Sometimes:
- technical due diligence (audit of technical documentation);
- environmental due diligence (checking the company's careful attitude to land, water, air);
- tax due diligence (checking the correctness of paying taxes, a preliminary tax audit in order to find out if there are risks of falling under a fine from the State Fiscal Service);
- financial due diligence (research of the financial solvency of a business and results of economic activity).
The following can be checked:
- real estate;
- holdings;
- trusts.
Often, the due diligence procedure is carried out not only when buying a business, but also when buying real estate and land.
Due diligence
It is unlikely that an investor will want to deal with a company that has overdue debts. Therefore, an audit is carried out in order to feel more confident when buying large assets. The cost of it is fully justified: they are much less than those that may be when buying an unreliable company.
To feel more confident when investing, order a comprehensive company audit service from Key Solutions experts.
During the check, the following work:
- lawyers, checking all documents for compliance with the law;
- auditors;
- tax consultants.
Legal analysis of a company by lawyers always begins with the collection of as much information as possible on each transaction. Key Solutions lawyers take most of the information on the object of study itself, from open sources on the Internet and in print media.
Professional approach and critical thinking are extremely important when processing such information. Key Solutions lawyers do not draw their conclusions only on the basis of 1-2 sources. This is always a big job, a complex set of studies. Every detail is very important, especially if the company is engaged in foreign economic activity or there are questions on intellectual property, which often happens in IT firms.
Initially, such checks were made only in the banking sector. Today, due diligence is relevant for any company. After all, it is important for a potential investor to know how reliable the business in which he invests.
If things aren't going well for your company and you want to find the cause, it's time to start due diligence.
For more information about auditing, please contact Key Solutions consultants.
Due Diligence report
Based on the results of the work, a report with a certain structure is always compiled. Everything is written in a very clear and understandable language. Usually the report sections are as follows:
- introduction;
- risks;
- conclusions.
It is especially important to carefully choose the company that will conduct the analysis if the business is international. You can use not only open sources, but also get information during negotiations and interviews with top officials of the company.
This approach is effective to use in the case of a somewhat dubious attractiveness of the investment object. The interview allows you to find out the main points as quickly as possible. If you need an assessment of solvency, this method of extracting information is suitable. It is often practiced in the West. Negotiations are being held with the owner, questions are being asked, not very detailed, but the documents are being studied. If the results of the interview remain interesting, then there is a need for a more thorough analysis.
Do you want to profitably acquire a commercial property? Then you should learn about it as much as possible! Request an audit from Key Solutions.
An independent expert assessment of economic activity will reduce all risks. You can even evaluate a land plot, and not just a corporation.
In Ukraine, there are still no legal acts that regulate the due diligence procedure. However, already now investors are actively requesting this service in order to know the real market value and all the difficulties that they may face after investing. Also among the interested parties are the shareholders of the company, the board, top managers. Often such a check is required by the company itself if it wants to get a large loan or is looking for sponsor support.
If a company starts to show a loss-making balance, only a full audit can help identify the reasons for this and prevent bankruptcy.
It is better to contact a well-known company with a name. The more experience the conducting an audit of its employees, the better for the client. For serious firms, the cost of due diligence cannot be low. Since 3 people are working on the audit. It all starts with a preliminary call, a thorough analysis of the problem, and only after that a contract for the provision of audit services is concluded.
Due diligence Kyiv
Order the service of conducting due diligence procedures in the audit company Key Solutions, and our highly qualified specialists with considerable practical experience in this area will give you a complete and detailed picture of the state of affairs in the company.