April 9, 2022

What is due diligence?

Due diligence refers to all the checks carried out by a company before an acquisition, investment, or any other transaction involving a third party: customer, supplier, etc. This analysis aims to obtain a precise idea of ​​the company's situation to guard against any harmful elements.


The interest in due diligence


Due diligence is a fundamental legal obligation, especially for large companies, then a simple precautionary measure. They must set up a program to detect influence-peddling and corruption.


In addition, a company that has entered into a contract with a third party guilty of corruption may be held responsible for the facts. Due diligence, therefore, allows the company to make the best decisions and protect itself before entering into a new business relationship.


The objectives of due diligence


Due diligence can pursue different objectives, depending on the situation.


First, it can be used to identify the legal risks to which the company is exposed in a transaction or acquisition. In this case, many aspects of the third-party company must be analyzed, whether its legal status, current contracts, calls for tenders, or the loans it has taken out. Particular attention must also be paid to intellectual property law: trademark, trade name, logo, etc. Finally, any disputes or conflicts of interest are systematically investigated.


Due diligence can also focus on the financial information of the target company to estimate its value with the most incredible precision.From financial statements to audit reports, many documents are scrutinized. The company's profits, assets, and debts can thus be valued at best.


Finally, due diligence also takes place at the commercial level. In this case, a detailed study of the market of the third-party company is carried out, highlighting its strengths and weaknesses and its opportunities and threats. The positioning of the company in its market and its position vis-à-vis the competition are critical elements in assessing the risks associated with an acquisition project.


Depending on the case, due diligence may also relate to the target company’s customers, suppliers, subsidiaries, partners, or subcontractors.Their reputation, possible convictions, or tax history may also be examined.




Collecting information as part of due diligence


Whatever its objective, due diligence requires collecting a large amount of information, allowing a solid analysis to be carried out.


Some of them are open to the public and, therefore, easily accessible: for example, financial statements, official reports, or publications in the press. However, many payloads are subject to access restrictions. Collecting this information is legal, but it requires particular expertise, influence, and a strong network.


Thus, professional events such as seminars, fairs, or conferences are ideal opportunities to obtain such information. Advanced methods, taking advantage of Big Data, also allow restricted data collection, which would be very difficult to access by conventional means.


Moreover, it is not enough to collect a large amount of information to conduct a good analysis. In the context of due diligence, the quality of the data analysis is crucial. However, it requires advanced skills in research and investigation.


Therefore, entrusting a due diligence mission to a private investigator is the most effective way to prevent risks and carry out the necessary checks before a transaction, acquisition, or any other operation.


Thus, Universal Investigations Agency, Inc Miami AndHollywood, Florida, deploy all its expertise to process the data while ensuring entirely lawful methods obtain it. The veracity of the information obtained is also at the heart of our concerns, whether from research on the internet or reliable sources present in the field.


Hiring a private investigator for due diligence: how much does it cost?


The price of a due diligence mission carried out by a private investigator can vary according to different criteria, starting with the scope covered by the service: local, national, international... The more complex the mission, the more means and resources it requires. The higher its cost. The size of the targeted company also has an impact on the proposed rate.


Thus, the cost of a due diligence investigation can range from a few hundred dollars, for the most straightforward cases, to several thousand dollars for the most complex. Find out how much a private detective inMiami, Florida, costs for this mission.


For more information on how to retain a Miami Private Investigator, contact Universal Investigations Agency, Inc. today at (954) 305-6275


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By Victor Elbeze, Lead Investigator & Owner of UniversalInvestigations Agency, Inc.


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