Whether your company is about to acquire a new company, enter a new market, or fill an important role, it’s important to have full knowledge of what you are getting into.
A business acquisition or merger is one of the most important investments any organisation can undertake. It can take your company to great heights or plunge it down to bankruptcy. That’s why these kinds of decisions must be made from an informed standpoint.
Due diligence helps you get an in-depth understanding of a company, a market, or a person you are about to engage with, so you can make decisions that add value with minimal risks.
Due diligence is a profound review, audit, or investigation to fully understand a company or a person and confirm specific details under consideration. In a way, it’s an organisation acting with prudence by carefully analysing advantages, risks, and costs before making a deal.
Due diligence is generally practised when participants have agreed to a deal in principle but have yet to sign a contract. It’s most crucial when making significant investments, such as acquisitions, mergers, and entering a new market. It should also be carefully conducted before purchasing a new property or equipment, filling a new position, or any other business engagement with another party.
A due diligence checklist refers to the process of analysing the companies involved in a transaction. It serves as a guide to gathering essential information, such as an organisation’s size, assets and liabilities, contracts, and more. Through this checklist, you can identify the benefits and potential issues you might encounter once you undertake an investment.
Standard due diligence often requires documents from these five categories: corporate, financial, legal, asset, and intellectual property.
These documents give us an overview of a company’s inner workings, such as how it’s structured, who the key persons are, and more. They can include:
Financial documents provide evidence of your revenue, transactions, and other financial claims. They may include:
Legal documents give insight into the legal entities that govern a business. They also review any legal matters that may affect the deal in the future. These can include:
Asset documents record everything tangible a company owns, such as:
All documents that offer proof of trademarks, copyrights, patents, and other forms of intellectual property. This can include:
A background check is a method used to gain insight and verify details about a person. It looks into and validates a person’s education, employment history, and even criminal records. A background check is typically a part of pre employment screening and assessment, especially when filling crucial roles in a company.
Depending on the type of work or kind of investment a person will be involved in, a background or pre-employment check may include the following:
Every good decision is based on good substantial evidence. No matter how impressive a deal or an individual is, it’s imprudent to take their word without first confirming the details. Due diligence and background checks validate what they offer and provide more insight into a company or person.
Since the availability of quality information helps make a more sound decision, deals that have gone through a due diligence process have higher chances of success. To expound more, due diligence allows you to achieve the following:
In the same way, background checks on applicants assure the following:
NSI Global Counter Intelligence provides expert due diligence and background checks on corporations or individuals in Australia and worldwide, including offshore companies. So don’t take the risk on bad investments. Call us now!