Due Diligence

One of the forms of investment is investing in already operating business by entering a new investor on parity with previous owners or by means of full transfer of control over the existing business.

In this case the investor acquires not only the real estate items or equipment associated with this activity but also gets absolute control over all current activities (including both its current state and risks of previous periods).

The investor should know the following

  • legal scheme of organization of business, business models used in it (individual entrepreneurs, legal entities), relationships between the elements of the business system, to what extent this scheme is rational and logical in the context of the particular business model;
  • property declared in the acquired business (real estate items, rights to land, equipment, objects of intellectual property), the way in which the abovementioned property is documented, availability of associated risks, disputes or encumbrances;
  • system of relationships with counterparties (suppliers, contractors, customers), if these relationships are stable and long-term, the risks that may appear in future;
  • system of relations with staff, availability of risks of hidden labour relations, labour disputes, other unresolved personnel affairs;
  • risks of past and current business activities in the context of taxation, if the tax model is correct for the particular business, tax risks for the new investor, availability of ongoing tax disputes, appeals against decisions of the state fiscal service or customs authorities.

This is a short list of questions the answers to which can destroy all attractiveness of the successful business or, vice versa, confirm its stability and reliability.

Therefore, before investing the future investor should obtain complete and detailed information about the investment object, get a qualified assessment of all possible risks and take this information into consideration when making the final decision on investing funds, powers of control, distribution of shares among other investors, etc.

Experts of our company have significant experience in:

  • conducting the due diligence of enterprises in various fields;
  • assessing the hidden risks of an investee;
  • providing recommendations on the appropriateness of investment and possible risks.

What will you receive?

The report on the due diligence results will contain a qualified assessment of all possible risks (legal, tax and organizational) which the investor will be able to take into account when making the final investment decision.