2 WHAT IS DUE DILIGENCE?

Due diligence — term emerged in the early twentieth century in the United States, literally translated as “reasonable precaution”. Originally “due diligence” was called a procedure of disclosure of data about investor by broker to a company, whose shares are listed on the market.

Currently, the term has a somewhat broader interpretation. Due diligence is now – a comprehensive review conducted by the investor to identify potential risks associated with investment projects. It also includes information about the expert evaluation regarding to selling assets. Typically, the need for such procedures arises before buying shares in any business or investing in a business project. Sometimes, due diligence can be understood as collecting and analysis of information about existing or potential partners or customers to understand their financial solvency.

Thus, we can formulate the main purpose of due diligence – identification and / or minimization of business risks (including legal, economic, marketing, tax, political) that may occur during all kinds of commercial operations.

WHEN THE DUE DILIGENCE PROCEDURE IS NECESSARY?

Originally appeared in the Western countries as a companion procedure of broker and banking operations, due diligence today – a necessary action at the conclusion of a variety of transactions, where a preliminary collection of objective information is needed. Due diligence procedure is required when:

  • acquisition of shares of the companies;
  • acquisition of real estate;
  • purchase of property complex;
  • provision of loans;
  • reorganization of legal entity upon accession or merge with another company;
  • targeted financing of business projects;
  • other commercial operations where reliable information about the investment project, transactions funded companies, etc. is needed;

In some cases the service is necessary for the optimization of business processes in the long term future activity of the company.

CONDUCTING OF DUE DILIGENCE PROCEDURE

Due diligence procedure involves several steps:

  • Evaluation and analysis of investment object.
  • Financial audit.
  • Legal expertise and legal support.

After passing of each phase experts draw up a detailed report about the investment. Usually each step of the due diligence procedure is parallel, what can significantly save the customer’s time. On the basis of the examination the customer can make an informed decision regarding to expediency of the financial transaction, purchase or investment.

DUE DILIGENCE SERVICE IN OUR COMPANY

Due diligence is necessary for everyone who wish to identify legal risks and commercial attractiveness of the investment project or transaction. Any businessman, sooner or later, will need this procedure. And here is very important not to be mistaken with a partner who will professionally hold tax, legal or financial due diligence.

Our company has the necessary facilities and has a huge experience in providing due diligence services for both business owners and individuals. The staff of our company consists of professional accountants, auditors, lawyers, financial analysts and tax experts who are able to conduct a comprehensive review of the legality of the proposed transaction, as well as to determine its financial attractiveness and potential risks.

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  • ГЛАВНЫЙ ОФИС
5 STARS EUROPE Monaco
Block C/D Le Panorama
57 rue Grimaldi
98000 MC
www.5starseurope.com
info@5starseurope.com
Tel.: +33 1 82 88 38 98
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