In the business world, due diligence is an essential process that involves inspecting and assessing the risks associated with a potential transaction. Its main objective is to conduct a thorough background check to ensure that all parties involved in the transaction have the necessary information to proceed.

• During due diligence, confidential, legal, financial, and other material information is exchanged, reviewed, and appraised by the parties interested in entering a business transaction.
• Typically, due diligence involves conducting extensive research and analysis before signing an agreement or entering into a business with another party.
• The results of the due diligence process can help identify potential risks, weaknesses, or opportunities for improvement, and inform negotiations or decision-making.

Administration and Ownership : Understanding who runs the company and their background

Capitalization : Analyzing the size and volatility of the company and market, and comparing them

Business Competitors and Industries : Researching and comparing competitors to gain a better understanding of the target company’s industry

Balance Sheet Review : Interpreting the debt-to-equity ratio of the company

Revenue, Profit, and Margin Trends : Examining recent trends in financial figures, such as revenue, profit, and margin

Risk Assessment : Identifying industry-wide and company-specific risks, ongoing risks, and predicting future risks

Capital History/Options and Probabilities : Reviewing the company’s history, including its longevity and stock price trends

Future Expectations : Maximizing profits and planning for the future based on the information gathered during the due diligence process

Step 1: Information gathering: The due diligence service provider will gather information about the interested party and the transaction. This information may include the name and contact details of the parties involved, the purpose of the transaction, and the type of due diligence required.

Step 2: Proposal submission: Based on the information gathered, the due diligence service provider will submit a proposal outlining the scope of work, timeline, and cost for the due diligence process.

Step 3: Agreement execution: Once the proposal is accepted, the interested party and the due diligence service provider will execute an agreement outlining the terms and conditions of the engagement.

Step 4: Due diligence review: The due diligence service provider will conduct a thorough review of the transaction, including financial, legal, and operational due diligence, as per the scope outlined in the agreement.

Step 5: Reporting: After the review is completed, the due diligence service provider will provide a detailed report of its findings, including any potential risks or concerns identified during the due diligence process.

Step 6: Follow-up: Based on the findings of the due diligence report, the interested party may take corrective actions or negotiate different terms for the transaction. The due diligence service provider may also be involved in follow-up activities to ensure that any identified risks are mitigated or resolved.

1. Basic information of the company

2. Financial Data

3. Important Business Agreements

4. Intellectual Property Right details

5. Litigation Aspects

6. Marketing Information

7. Internal Control check system

8. Taxation aspects

9. Insurance Coverage

10. Environmental Aspects

11. Human Resource Aspects

12. Cultural Aspects