What Is Due Diligence In Transaction Advisory Services?

Due Diligence, in the world of finance, is an important phase in the process of acquiring/disposing of an asset or a business.

Carried out by a specialized Transaction Advisory Firm in India, its objective is to assess the risks inherent in the target company. All of the verifications make it possible to understand the company’s strategy, scan its strengths and weaknesses but also to have a vision of its accounting, financial, fiscal, social, environmental situation, etc.

Below are several examples of Due Diligence:

1. Financial Due Diligence: the objective of financial Due Diligence is to analyze the strengths and weaknesses of the company by examining its current financial situation and by anticipating its future financial situation.
2. Tax Due Diligence: Tax Due Diligence makes it possible to study the possible tax risks linked to the transaction but also to scrutinize the guarantees of assets and liabilities, income tax, or GST.
3. Social Due Diligence: Social Due Diligence aims to verify the financial risks related to social liabilities (example: unfunded commitments for retirement benefits), the risks of non-compliance with social regulations (example: employment contracts), the costs related to possible departures of managers (example: stock options) or the feasibility of workforce synergies.
4. Environmental Due Diligence: Environmental Due Diligence verifies that the company to be sold or acquired complies with the latest national and international environmental regulations in force. Indeed, environmental themes continue to take a prominent place in the problems of our current societies.

The purpose of the Transaction Services firm is to audit the transaction, analyze all the potential risks, and carry out Due Diligence to reassure and advise its client. The role of this service is really to prevent the clients from making a mistake by buying the business or the targeted asset.

Thinking about selling your business or investing in an existing business? Due diligence analysis, together with a team of professionals, distinguishes a success story from wasting resources without achieving the desired results.

If you have decided to sell your business or obtain external financing and would like to make sure that there are no unknown areas of legal or tax risk that would depreciate the business below the expected level and jeopardize your deal, then the Transaction Advisory Firms in India can help you.

Through due diligence, an adequate assessment of risks within the company will be made and alternatives will be recommended to mitigate these risks. You will also receive support throughout the entire sale or refinancing process to make the most appropriate decisions.

In addition, if you are thinking of investing in an existing business and wish to minimize the possibility of discovering legal, tax, or financial risks after signing the deal that would reduce the investment performance below expectations, Transaction Advisory Firms in India will support you in making a correct assessment of these risks.

Also, you will be supported throughout the purchase process so that the purchase process and price are structured according to your expectations.

In this way, you will be supported at all stages before the transaction, during, and after the conclusion of the transaction, to achieve the desired efficiency and to be able to control the entire business, both previous and new.