The procedure, which is called the Due Diligence, is a thorough analysis of economic and commercial activities of a company. In particular, it is an assessment of the company position in the market and the general status of the financials of the company. Both internal documentation of the company, and the comparative info, which is collected amongst the competing firms, can serve as the base for such analysis.
The Due Diligence procedure is performed in order to achieve the following objectives:
- Verification of the Effectiveness of the economic activity and the consistency of the information about the company;
- Collecting of evidences and justifications in order to make some certain strategic decisions;
- Control of the proper design of the internal documentation and it compliance with the law;
- Analysis of the timeliness and accuracy of the provision of statistical and tax reporting;
- Assessment of the competitiveness of the company in a single market segment.
- Valuation of the company.
One of the examples of the Due Diligence may be a case when you purchase an existing RAK ICC offshore company. If such company was used for business by its previous owner, prior to its purchase, it is extremely important to make the complete check of the company for the absence of debts and any other liabilities.
In practice, Due Diligence can be applied in different situations:
- Company purchase;
- Merger and acquisition of business;
- Investment into assets and securities;
- Real Estate acquisition;
- Purposed funding or issuance of a loan;
- Establishment of relationships with new partners as well as sponsorship programs.
The Due Diligence procedure can be also applied to the other types of commercial and financial transactions, which require a proper extent of information about the transaction, potential business partners, investment projects, etc.
