“Due Diligence” is a term used for a number of procedures aimed at providing comprehensive information on the business structure, its financial indicators, as well as the current existing risks (operational, financial, legal, tax, etc.).
Most often Due Diligence is carried out on the demand of the investor interested in acquisition and occurs in the form of a specific review carried out by an independent audit or consulting company.
During Due Diligence of an object (company, group of companies or holding) we perform the following procedures:
1. Examination of the organizational aspects of the corporate structure of an object (the founding documents and documents of corporate management, minutes of governing bodies; documents concerning significant managerial relations and affiliates).
2. Analysis of relationships with shareholders, including identification of property and non-property rights of shareholders.
3. Assessment of the licensing framework for the functioning of an object.
4. Analysis of economic relations and associated risks.
5. Verification of documents, confirming property rights and obligations of an object.
6. Examination of the specificity of the relationship with the staff and remuneration.
7. Detection of specific business practices, the implementation of which may carry significant risks or be unacceptable to the new owners (aggressive non-competitive actions, illegal tax optimization, etc.).
8. Analysis of the effectiveness of financial management.
9. Examination of the tax risks associated with the activity of an object.