Statutory Complaince and Due dillegence services
Expanding your business is an inevitable phase in its journey. But it comes with the risk of making huge financial investments in something in which you have no expertise. In order to prevent this fear factor from stopping you from exploring new sectors and expanding your business into new sectors and locations, due diligence should be done meticulously.
Needless to say that making huge investments comes with numerous hazards. Reach us to know more.
Needless to say that making huge investments comes with numerous hazards.
Reach us to know more.
Due diligence in established businesses is the process of ensuring every aspect of a transaction is in order before it moves ahead. When an organization considers issuing an IPO, then the investors perform due diligence on the company to make sure it’s worth the values quoted as an investment. Due diligence at the time of M&A can include not only looking at details like financial stability, sales, real and intellectual property, but also pending litigation, labor relations, environmental problems, and relationships with third parties too. Thus it covers almost all parts of an M&A transaction.
“Due diligence” in the startup systems, refers to an audit that’s performed in order to discover possibilities of business liabilities or deficiencies in the path of a planned business transaction, such as an investment or merger taking place. Due diligence offers a systematic way for firms to analyze and understand startups in order to mitigate risks before they choose to invest in them. During the due diligence process, the startup must exhibit complete transparency, since any discrepancies discovered can affect the deal. This also includes being open about pending lawsuits, patent disputes, disgruntled employees, or business mistakes in hopes of establishing trust between the company and its potential investors, thus making the process smoother and faster.
While due diligence would seem like it benefits one party in a transaction deal, the fact is that due diligence helps both the buyer and the seller in a business acquisition. Moreover, due diligence assists investors and companies understand the nature of a transaction in a deal, the risks involved in taking it through, and whether the deal fits with their portfolio to match their vision and mission. Essentially, following up the due diligence practice is like doing “actual forecast and planning” on a potential deal and is essential to have informed investment decisions to have a successful venture following it up.
By outsourcing to a company like Versutus, you can be sure that we can out-perform any in-house HR teams in terms of accuracy for a fraction of the operational cost.
We have numerous years of expertise and know exactly where to look to find red-flags. We analyse every single factor without compromises and look out for any potential pitfalls which you might step into sooner or later.
No matter the magnitude of the risk which is associated with the deal, our team is capable of coming up with a strategy or a slight adjustment to make it work.
1) Risk estimation based on location, the magnitude of your investment, and various other factors.
2) Thorough analysis of the reputation, financial, and legal status of your opposite party in any merger, acquisition, or tie-up.
3) Inspecting any pending lawsuits and collecting customer feedback about the party.
4) Analyzing all possible motives for the merger/acquisition proposal to relieve you of suspicions.
5) Brain-storming details about the respective benefits which the concerned companies would get out of a deal and estimating taxes that the deal demands.
Staying relevant and visible in your field of business requires a continuous cycle of improving, merging, and acquiring other profitable business models that you can benefit from. But you cannot risk your existing business while attempting to flourish into new areas. There is a good chance that it might lead to a huge loss in your reputation and might even question your legal stature. Hiring a reputed firm like Versutus to analyze the direct and indirect threats involved in a deal could save you from a lot of trouble.
Due diligence ensures the buyer on whether the expectations regarding the transaction are correct. In M&A, purchasing a business without doing due diligence substantially increases the risk to the purchaser.
Though due diligence may be conducted to provide the purchaser with trust, it may also benefit the seller, as going through the rigorous financial examination may reveal that the fair market value of the seller company is more than what was initially thought to be the case. Therefore, it is not uncommon for sellers to prepare due diligence reports themselves prior to potential transactions.