What is due diligence? Corporate & Commercial

Due diligence is a comprehensive appraisal of a business, which is carried out by a prospective buyer. It looks at the company’s operations, strengths, weaknesses, areas of risk, financial affairs, assets and liabilities.

It is likely to cover issues such as environmental matters, contracts, tax, employees and their benefits, consents and permits, litigation and disputes and house-keeping.

The objective is to get a full picture of the target business to verify the information a prospective purchaser has been given and to ensure there are no issues or liabilities that may interfere with the transaction or detract from the value of the target.