Answer to Question #215711 in Law for Ditebogo

Question #215711

What is the importance of conducting due diligence? (200 words) 5 Marks


1
Expert's answer
2021-07-13T14:04:02-0400

The due diligence stage is an essential element to a successful commercial transaction. When purchasing a business, the due diligence stage allows the buyer to assess the value of the business and to verify the information pertaining to the business in order to determine whether to proceed with the purchase. The due diligence period also permits the buyer to determine if there are any barriers or risks associated with the transaction. Accordingly, the transaction is usually conditional upon the due diligence stage being completed.

The due diligence period is typically two weeks to one month in length, but can vary depending on the complexity of the transaction and can also be extended in some circumstances. Often the buyer and the seller will enter into confidentiality agreements prior to commencing the due diligence so that the seller can be certain that the information the buyer receives and reviews will be subject to confidentiality restrictions. The majority of the information for completing due diligence is obtained directly from the seller.



Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS