A due diligence review is a detailed assessment of a company prior to its valuation, whether in a takeover or in a succession plan. The company is meticulously checked for its earning power and the quality of its employees. In addition to business management, legal and tax aspects are also examined.
The aim of such an audit is to obtain as much information as possible about the company's opportunities and risks. Ultimately, a due diligence review facilitates the purchase decision and pricing. The scope of a due diligence is largely determined by the intended form of transfer. Where only certain assets of a company are acquired (asset deal), only the assets to be acquired (e.g. inventories, patents, etc.) must be subjected to a detailed examination. On the other hand, when an entire company is acquired (share deal), all assets and liabilities are included in the audit process.
It's costly. These can be optimized if the relevant documents are compiled early and completely. Our consultants will be happy to give you a few tips. Get in touch with us.