A “background check” to make sure that the parties to the transaction have the required information they need, to proceed with the transaction. Due diligence is used to investigate and evaluate a business opportunity.
- Financial Due Diligence: This includes analysing and Validating the Financial Statements like Balance sheet, Statement of Profit and Loss Account, Cash Flow Statement of a Company.
- Legal Due Diligence: This covers
- Compliance with applicable laws
- Regulatory violations or disciplinary actions
- Bye-laws of the entity
- Material contracts executed by the entity