Company Due Diligence
Company Due Diligence is the instrument with which an entity interested in acquiring companies or branches thereof, or in which it intends to make any type of investment, carries out a complete analysis of the legal, economic and financial situation of the company in question in order to be informed in detail of all aspects and evaluate with certainty the validity or not of the purchase, in economic and investment terms.
Company Due Diligence can be of three different levels depending on the degree of detail and information that is required:
Basic Due Diligence
This is the basic and most economic analysis; it usually consists of a check-up of the corporate bodies and their relative roles, of an analysis and extraction of chamber of commerce, cadastral and register records, including a preliminary examination of the financial statements.
High Level Due Diligence
This is the type of Due Diligence that is mainly used, it consists of an in-depth examination of the legal, fiscal and accounting aspects of the company. In addition to the analysis of the administrative documentation, also aspects related to the company’s activities, its capitalisation and relations with employees, suppliers, shareholders, banks, etc., are examined in depth.
In Depth Due Diligence
This is the Due Diligence par excellence, normally used in corporate acquisitions, thoroughly examining business matters in every aspect, with an in-depth analysis ranging from business contracts to financial statements, from the examination of the company’s core business to the examination of fixed assets and inventories. In depth is certainly the most accurate type of analysis with which the greatest amount of information about a company is obtained.
Some examples of company evaluations:
Agri-food and wine-growing companies;
Companies in the textile and clothing sector;
Engineering and environmental companies;
Banking and insurance companies;