Answer to Question #215263 in Law for Hlulani

Question

What is the importance of conducting due diligence?

Answer 1

Due diligence is essentially an investigation to target any risk from a legal perspective. This process occurs before acquiring a business or company. The purpose is to have knowledge of the risks prior to purchase. 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.