An Action Plan for Due Diligence which means that all sides have to decide on what issues and important information must be presented for a due diligence to be carried out. This includes and not restricted to organizational structures, shareholdings, annual legal reporting, personnel, legal and related groups, and company financial records.
Keep in mind that legal due diligence is primarily concerned with the current status of the, financial due diligence is generally concerned with the past performance of the business, and life sciences due diligence should be focused on the ability of the business to sustain its future operations. This means it is in operations due diligence where the team MUST stick strictly to the facts but where there also is the greatest tendency to stray towards interpreting the facts and filtering the information they provide. This is because legal and financial due diligence are recording hard facts where operations due diligence team will be looking at subjective data that will help to identify potential risks and opportunities.
Analyze the scale of the prospects and suppliers – ask to review the list of key clients and determine if they’re active buyers. Investigate if there are existing contracts and if they’re to bring in future recurring business. On the other side, verify their suppliers and see if there are any outstanding payments and invoices on settlement. Test to see if there are any unpredictable costs that may occur after you purchase the business enterprise.
Proper and accurate due diligence can also be helpful post acquisition with the complex organizational and logistical issues that arise should the investor need to take ownership of a foreclosed property. The purchase of notes on distressed properties also has many legal pitfalls to avoid. Investors need to hire qualified counsel to ensure the enforce ability of the loan documents and protect against any potential lender liability claims brought by a borrower in connection with an acquisition.