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A business is a strange combination of having real and intangible assets both. Intangibles are so potent in themselves, that they can guarantee exponential revenue and profitability alone.
Due Diligence
Due diligence refers to the process of reviewing and documenting legal, financial, and compliance aspects of the company. The investor checks the regulatory and process compliance, specifically before an investment or funding.
What is the due diligence of a company?
Due diligence is generally conducted by investors to check for regulatory and process compliance by the company regularly. Due diligence of a company is generally performed before any private equity investment, business sale, bank loan funding, etc.
In this process, the legal, financial, and compliance aspects of the company are usually reviewed and documented. It is the process of examining all the material facts of a deal or a contract before a legal contract is signed by both parties. It is not just limited to the buyers; even the sellers can perform due diligence on the buyer. Due diligence consists of factual, background, legal, and accounting checks. This is done to ensure that there are no surprises after a deal is done.
