Due Diligence is a form of risk assessment. Before proceeding with the purchase of the object of negotiation, the advantages and risks associated with the sale are clarified to the buyer. The prospective purchaser appoints an appointed expert who requests the execution of the due diligence process pre-ipo due diligence.
The seller provides a set of information that indicates the weaknesses, the strengths and all the essential information that makes it possible to assess the risks of the object of assessment. The right to use due diligence varies depending on the relationship with business partners and the type of business acquisition.
Due Diligence: When should the process be carried out?
The due diligence process is carried out:
- when proceeding with the issue of financial instruments (placement of shares or bonds );
- in the context of corporate or business acquisitions / disposals;
- in the case of valuation and appraisal of properties subject to judicial and sale procedures;
- in view of the purchase of units in closed-end mutual investment funds (AIFs) by savings management companies ( SGR ).
Due Diligence: who carries it out?
The pre-ipo due diligence hong kong operation is carried out by a third party, unrelated to the bidder and potential buyers of the object of the negotiation. In the financial field, Due Diligence gives intermediaries and financial institutions the opportunity to collect information relating to accounts.
It designates the process of analyzing the financial conditions of a company or a business branch, which is also carried out to monitor the work of managers and the results obtained or to evaluate in the event of a purchase.