Due diligence

Due Diligence

Due Diligence

Due Diligence – What Is It

The most widely known definition for this notion is the use of reasonable caution and good faith towards something.

Due diligence is a set of actions for a comprehensive analysis and evaluation of a company, a business or property.


Due Diligence – What It Is Needed For

At a definite stage of doing business, management faces the need to restructure, sell or buy assets. In its turn this requires the evaluation of prospects, conditions and risks relating to the transfer of rights for property (assets). These are the tasks that due diligence resolves.

Information acquired during due diligence, and conclusions made upon it, are the most important grounds for taking investment decisions about purchasing real estate, a company (business), groups of enterprises, about mergers, takeovers, reorganizing and restructuring.

A customer usually sets one of the following tasks for us for due diligence:

  • evaluation how true the declarations of the potential seller about his business, company or property are;
  • evaluation of value of a business, a company or property;
  • identification of the risks related to prospective purchase of a business, a company or property;
  • evaluation of the realizability and profitability of an investment project;
  • evaluation of the financial condition of a company (business), identification of its property composition;
  • evaluation of the existing risks related to the asset’s ownership.

The results of due diligence can of course be used for other purposes.


Who Needs Due Diligence

Investors: both professional and private for substantiation of investment and strategic decisions.

Lending institutions, investment and pension funds for estimating credit and investment risks.


Due Diligence Areas

Depending on due diligence purposes and volumes, the following issues are evaluated:

  • legal safety of investments;
  • history of purchase or creation of a business, a company or property;
  • company operation or business condition during a definite period of time;
  • the current condition of legal and financial (accounting) documents;
  • financial and tax policy of a company;
  • the current and forecasted business profitability;
  • legal and financial consequences of buying a company, business or property.

We use the highest state-of-the-art knowledge and technologies, together with the most qualified and experienced specialists, for due diligence work.


Due Diligence Methods

Corporate Lawyer has considerable potential for conducting due diligence of almost any companies or objects. Our specialists have accumulated a unique experience in conducting such research. The highly professional teams of lawyers and financiers individually selected for each project ensure the generality and depth of their work.

Due diligence methods include the development and implementation of an optimal set of instruments and tools for acquiring information and documents about an object, their analysis and evaluation. Below are several methods for acquiring the information required for due diligence:

  • requesting and obtaining information and documents from potential seller of a business, a company or property or from other authorized persons;
  • requesting and obtaining information from state, municipal and other authorized bodies;
  • a site visit and visual examination of property;
  • evaluating the market value of a company, a business or property;
  • acquiring information from open sources, for example, the Internet or printed mass media.

If due diligence is carried out for a future business sale transaction, the natural task for all potential parties is to ensure a constructive dialogue during preliminary negotiations and transaction preparation. We do all we can so that due diligence won’t affect the general climate of relations between the parties. Strict compliance with initial agreements, neutrality in work, and other principles that our specialists stick to, guarantee the maintaining of good working relations between the interested parties.


Due Diligence Report

After carrying out due diligence, we prepare a report that includes the identified risks, the list of submitted and analyzed documents and information related to a business, a company or a property, as well as other material information that experts consider to be expedient for the set task.

In some cases a due diligence report can include recommendations on ways and possibilities to minimize the identified risks and further legal protection of property.


The report can be prepared in Russian, English or other languages.

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