Due diligence comes in a variety of forms, and depending on the situation each type can be very complex. Financial due diligence, for an example, requires examining the company’s documents to verify that the figures contained in the Confidentiality Information Memorandum are accurate. This includes examining audited financial statements, recently unaudited financial statements, comparing them with comparable statements, revenue projections and more.
Due diligence on real estate is an intense, time-consuming process that can cost a lot of money. Prospective buyers must meticulously examine the zoning regulations, potential liens, as well as existing structures to discern possible liability and costs. This may also involve interviews with employees, analyzing the record keeping system of the company and assessing compliance requirements. In the past, this type of work was carried out in the office of the seller. However, thanks to technological advances, it can now be done online.
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