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Due Diligence

Don’t be restless after closing every deal! We will provide you Due Diligence services and we will make sure to prevent every unpleasant situation.

  • Scope framing for due diligence
  • Regulatory & Compliance check
  • Liaising with Government Authority
  • Review of Books on Accounts & Risk assessment
  • Turnaround time 60 Working days
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Overview of Due Diligence

Due diligence is an audit or examination of a possible investment to compose surety that all numbers suggested are correct, which may involve analysing fiscal records. Due diligence often refers to the in-depth research and study being done before signing an agreement or a business with a party.

When Due Diligence is required?

  • Mergers and Acquisitions:

    Due diligence is done from the perspective of the seller, as well as the buyer. While the consumer looks into the financials, litigation, patents, and a whole range of relevant information, the seller concentrates on the experience of the buyer, the financial abilities to complete the transaction, and the ability to fulfil responsibilities taken.

  • Partnership:

    Due diligence is done for necessary alliances, necessary connections, business combinations, and such other alliances.

  • Joint Enterprise and Collaborations:

    When one company joins hands with another, the reliability of the company is a subject of concern. Assuming the other company's stand including the adequacy of supplies at their end.

Due Diligence

Types of Due Diligence

Types of Due Diligence

Due Diligence Report

The information collected during this process is essential for decision making and hence needs to be announced. The Due Diligence report helps in explaining how the company plans to generate further earnings (monetary as well as non-monetary). It works as a ready reckoner for explaining the state of affairs at the time of purchase/sale, etc. The ultimate objective is to get a clear understanding of how the business will perform in the future.

Due Diligence – Focused Area

Due Diligence – Focused Area

Benefits of Due Diligence

Due diligence is needed so that the entity is well conscious of all the essential items like:

  • Administration and Ownership

    Analysis of who runs the Company.

  • Capitalization

    Examining how large and volatile is the Company and market. A contrastive analysis of both of them is needed.

  • Business Competitors and Industries

    Research and compare the boundaries of competitors for a better comprehension of the target Company

  • Balance Sheet Review

    This helps in interpreting the debt-to-equity ratio.

  • Revenue, Profit and Margin Bearings

    To examine if there are there any recent trends in the figures which may be rising, falling or stable.

  • Risks

    Learn industry-wide and Company-specific dangers. Checking if there are any on-going risks and trying to predict any futuristic unforeseeable threats in the future.

  • Capital history/options and Probabilities

    How long has the Company been dealing? For a short- term or long-term? Has there been a steady stock price?

  • Expectations

    To maximize the profit for the future.

Checklist Due Diligence

The checklist consists of Financial due diligence, legal due diligence, operational, HR, etc. that are reviewed and evaluated by the due diligence advisory include

  • The Certification of Incorporation
  • The Memorandum of Association(MOA)
  • The Articles of Association(AOA)
  • Financial Summary
  • IT Returns
  • Bank Report
  • Tax certification certificates
  • Shareholding composition
  • Statutory declarations
  • Property records
  • Intellectual Property Certification/application
  • Service bills
  • Environmental audits/license and permits
  • Biographical data
  • Labor disputes, if any
  • Employment and loan contracts
  • Employee benefits documents
  • Employment manual and policies
  • Operational documents related to the list of company’s suppliers, monthly production capacities and yield, the backlog of production, inventory reports, etc.

CorpBiz Deal Regime

  • Strategy
  • Target Credentials
  • Non- Disclosure Agreement 
  • Estimation
  • Letter of Intent
  • Due Diligence
  • Deal Construction
  • Negotiation
  • Contracts & Share Purchase Agreement
  • Deal Completion/Close

Series of Steps of Due Diligence Process by CorpBiz

  • Analyse the Capitalization

    A business's market capitalization, or total value, registers how active the stock price is, how broad its title is, and the potential size of the company's destination markets.

  • Resources Acquisition, and Margin

    The company's income report will list its revenue or its net income or profit. It's necessary to monitor trends over time in a business's revenue, operating expenditures, profit edges, and return on investment.

  • Rivals Comparative Study

    Every business is determined in part by its opponent. Examine the profit margins of two or three of its competitors. Performing due diligence on several businesses in the same industry can give an investor tremendous insight into how the company is performing and what activities have the leading edge in it.

  • Valuation Multiples

    Various ratios and economic metrics are used to estimate companies. Still, three of the most valuable are the 'price-to-earnings' (P/E) ratio, the 'price/earnings to growth' (PEGs) ratio, and the 'price-to-sales' (P/S) ratio.

  • Administration and Share Ownership

    Is the company still run by its originators, or has the board rearranged in a lot of new features? Fresher companies serve to be founder-led. Research the bios of executives to find out their level of expertise and knowledge. Bio knowledge can be found on the company's website.

  • Balance Sheet

    The organization's consolidated balance sheet will show its assets and liabilities, as well as how substantial cash is possible. Ascertain the debt-to-equity ratio to see how much tangible equity the company has.

  • History of Stock Costing

    Investors should examine both the 'short-term' and 'long-term price' movement of the stock and whether the capital has been animated or steady. Connect the profits created historically and determine how it interacts with the price movement.

  • Stock Suspension

    It should get researched upon how many shares exceptional the company has and how that number relates to the competition. Is the company representing on issuing more shares? If so, the stock price might get a hit.

  • Examine Long and Short-term Risks

    Be sure to understand both the industry-wide risks and company-specific risks. Are there outstanding legal or regulatory matters? Is there unsteady management?

CorpBiz Conduct: Inquiries, Data Rooms, and Searches for Due Diligence Surveys

Questionnaire

  • On instruction, we will present a due diligence questionnaire to the investment recipient, which is intended to extract all relevant material data about the target investment.
  • The questionnaire is customarily based on a specific pro forma but will be tailored to the particular business and sector. The investment recipient's lawyers will continually coordinate the acknowledgments to the questionnaire, with specialist lawyers/advisers dispensing with answers appropriate to their area. It is also common practice that in a lot of cases, the directors and senior administrators may compile and present this information to us. 

Reliable Data Room

  • All data shall be made accessible via a secure data room, which will be performed by us with access rights for the investment beneficiary and their advisors to have previewed.
  • It is our standard manner to use a 'virtual data' room addressing the issue of confidentiality. Nevertheless, we reserve the right to demand as per need. Admittance to the data room will frequently be for a limited duration and may get concentrated on a small number of personalities at any one time. The 'data room' will include all information comparing to the purpose of investment.

Interviews with Beneficiary Management

Even as the administration is always best placed to present this information on the target's enterprise and prospects, we likewise will be handling management interviews, as we see this as an indispensable part of our 'due diligence' process.

Internal and External Public Registers

Public records may, though, not be entirely up to date, and this will form part of our crosschecking structure everywhere the due diligence inquiries. External explorations are not confined to:

  • Examinations where the target, investment recipient of the investment recipient's guarantor is a company;
  • Organizations registrar records, Bankruptcy and Court records;
  • wherever the guarantor or the target partner is an individual, a research of the 'Individual Insolvency Register' for current and fresh bankruptcies, current individual voluntary compromises, debt relief orders, and current bankruptcy limitations orders and projects;
  • the records of trademarks, patents and recorded/certified designs prepared by Intellectual Property Offices;
  • land registrar searches;
  • Commercial learning providers such as Dun & Bradstreet;
  • the target's websites, and extensive searches of the goal through an internet hunt and any other genuine searches and information requests.

Differences: Due Diligence and Statutory Audit & Internal Audit

In India, companies statutorily required to get their accounts audited by an unconventional Chartered Accountant. In some cases, companies needed to carry out an internal audit relating to their method. Due diligence is quite distinct from internal and statutory audits.

Tax Outline: Perspective on Due Diligence

Tax due diligence represents a prominent role in M&A determination, though the tax usually is not the primary concern in the context of M&A deals. Customarily, tax due diligence is carried out to explain more about the tax profile of the target and to reveal and quantify any tax exposures. Nevertheless, tax due diligence also comprises recognizing any tax upsides which may be accessible to the goal. It also supports in distinguishing and developing an appropriate procurement structure for the deal in question. The buyer needs to consider while negotiating for the tax protection to ensure that it does not affect the commerciality of the business for the seller. A tax due diligence is traditionally taken out to:

  • Verify the descriptions made by the seller at the time of pre-deal discussions concerning tax matters.
  • Verify the tax assumptions presented by the buyer in valuing the target.
  • It is distinguishing any material tax publications that may be remaining with the target, including symptoms of such tax exposures.
  • Recognize any material upsides such as possible tax benefits that are being maintained by the end.
  • Structure the venture in a tax-efficient practice.
  • Evaluate the availability of tax losses, tax credits, and other tax assets.
  • Guarantee the adequate protection mechanism for the buyer.

Why Corpbiz?

Because we consist of

  • Stamina energy, and confident of resolving issues and working to timetables and deadlines
  • Commercial Recognition combined with practical experience and an interrogation mind
  • Identify Key Drivers to ensure a concentrated approach, be alert to problem areas and inequalities
  • Presentation Personal skills and an ability to express clearly, and without ambiguity
  • Related Expertise to provide targeted and useful due diligence feedback that adds value

Frequently Asked Questions

The Whys are as follows

  • Evaluation and structuring of the transaction
  • Confirm/verify representations and warranties
  • Validate Business Plan
  • Transaction Management
  • Business Due Diligence:
  • Legal Due Diligence
  • Financial Due Diligence:
  • People Due Diligence
  • Environmental Due Diligence
  • Due Diligence Advisory

The Pillars are Decisive Rationale, Risk Reduction, and Post-Diligence

The Benefits of Due Diligence are as Follows.

  • Determine Administration and Ownership 
  • Determine Capitalization
  • Analyse Business Competitors and Industries 
  • Balance Sheet Review 
  • Revenue, Profit and Margin Bearings 
  • Risks Managements
  • Expectations Review
  • Capital history/options and Probabilities 
  • Analyze the Capitalization
  • Resources Acquisition, and Margin
  • Rivals measurement
  • Comparative Study
  • Valuation Multiples 
  • Administration and Share Ownership 
  • Balance Sheet 
  • History of Stock Costing
  • Stock Suspension
  • Expectations
  • Examine Long and Short-term Risks 

It is a standard manner to use a 'virtual data' room addressing the issue of confidentiality. Nevertheless, you can reserve the right to demand as per need.

Public records may, though, not be entirely up to date, and this will form part of our crosschecking structure everywhere the due diligence inquiries.

In India, companies statutorily required to get their accounts audited by an unconventional Chartered Accountant. In some cases, companies needed to carry out an interior audit relating to their method. Due diligence is quite distinct from internal and statutory audits.

  • Identification and mitigation of risks in light of market practice and legal requirements
  • Changes in the structure of the transaction
  • Price adjustment
  • Conditions precedent
  • Representations and warranties
  • Verification of disclosures
  • Retention of the purchase price
  • Indemnity
  • Conditions after closing the deal.

The emphasis of due diligence into areas of human resources should be on:

  • Compliance with employment laws;
  • Employee contracts;
  • Employment-related liabilities (such as redundancy payments and social taxes); 
  • Other issues are likely to be outlined in a due diligence checklist. 

Why Corpbiz

50,000+ Clients Worldwide

50,000+ Clients Worldwide

 

4.9 Customer Rating

4.9 Customer Rating

 

300+ Team CA/CS/Lawyers

300+ Team CA/CS/Lawyers

 

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