The purpose of due diligence is to confirm to a potential business buyer that the purchase is a sensible decision and the information being supplied is of a true nature.

This process involves an intense, comprehensive investigation and examination of the affairs of the business being purchased.

The scope of due diligence includes the following:

  • Determines the soundness of a business as a going concern.
  • Determines the current and potential legal problems in relation to contractual issues.
  • Determines the accuracy and validity of the financial statements and the existence and valuation of assets and tax issues.
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