Due Diligence

If you are considering a major investment in the share capital of a private company (whether by purchase of existing shares or subscription for new shares), it is strongly adviseable that you carry out a detailed review of the company. This process is known as due diligence.

The benefits derived from a thorough financial and tax due diligence process include:

Identification of issues which can be factored into the negotiations and may ultimately impact on the price paid for the shares.

Giving the buyer a clearer picture as to how the target business operates and identifying any issues that will need to be addressed after the change of ownership.

Where the risk areas identified do not justify a reduction in the price paid, they will most likely impact on the warranties and indemnities to be included in the Share Purchase Agreement and this provides additional protection for the purchaser.

Contact

Allister Gray - Partner