Due Diligence is a term used for the investigative evaluation of the performance of a business, or the performance of an act with a certain standard of care. In particular, due diligence is a process through which a potential acquirer evaluates a target company for acquisition.

The due diligence process involves a legal, financial and strategic review of all the documents, operating history, contractual relationships and organizational structure of a company.

In finance, due diligence is the process of research and analysis that takes place in advance of an acquisition, investment, business partnership or bank loan in order to determine the value of the subject of due diligence or whether there are any “skeletons in the closet”.

The key objective of due diligence is not just to confirm the factual assumptions and preliminary valuations underlying the terms, but rather to determine whether the transaction should proceed at all. If the risks or potential liabilities greatly exceed what the buyer anticipated, it may make sense to call the deal off. The potential investor generally uses in-house resources or hires a consulting firm that specializes in due diligence and corporate investigations to investigate the background and principals of the target company.

Managing the due diligence process is easy to get wrong, resulting in unhappy clients and increased risk of litigation against professionals. Both these concerns can be addressed by managing the process effectively.

The main documents that are studied in the course of due diligences are:

	Key contracts
	Financial statements
	Customer lists
	Employment agreements
	Minutes and consents of Board of Directors and share holders
	Confidentiality agreements
	Corporate charter & by laws
	Litigation related documents
	Patents, copyrights and other intellectual property related matters
	Licenses and permits related to operation of the business

AGN MAK International Consulting has expert accounting and legal professionals to handle even the most tough due diligence work.