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Definition of Due Diligence
Due Diligence is a business term for conducting an investigation into any number of practices, entities, or people. Because these investigations can and will be very different based upon what is being investigated, the specific definition of due diligence gain a great deal of meaning from the context in which it is being used. Therefore to understand due diligence, due diligence must be discussed within its context.
Fast forward this document by going to the exact info you need:
Forms of Due Diligence explained
Due Diligence in mainstream culture
How to Conduct Due Diligence Online
Due Diligence through virtual data rooms
The most common usage of the term due diligence refers to the process a company’s executives go through when evaluating a company it wishes to merge with or acquire. This specific type of due diligence is known as Merger and Acquisition due diligence, but this is not the only form. Other forms may include:
• Environmental Due Diligence
• Employee and Executive Due Diligence
• Due Diligence for Hedge Funds
• Legal Due Diligence
• Philanthropic Due Diligence
Although Due Diligence can be a legal obligation, it is generally a voluntary practice to guarantee that a business, person, or entity has all the facts before making a decision on a certain matter. Due Diligence is essentially a fact finding mission designed to protect the organization by making sure that it knows all factors in a decision before committing to it.
Due Diligence, as a term, really broke into mainstream culture as a result of the many financial scandals in the last few years: Enron, the Madoff legal proceedings, and government bailouts need for many banks and firms within the real estate market.
The term “Due Diligence” has even escaped its business applications roots and entered the political arena. Due Diligence as a term has gained a great deal of use in the media recently as it has been said that the US government failed to do due diligence on the threats of terrorism before 9/11; that President Obama failed to do due diligence on certain appointees who had large amounts of unpaid taxes, or the John McCain conducted the due diligence on Sarah Palin in such a rushed manner that he missed obvious shortcomings. No matter you political opinion on the validity of these usages, the point must be made: due diligence as a term has gone mainstream.
Although there is no single Due Diligence checklist that fits all contexts, here are some basics to keep in mind sorted by the type of due diligence that is being conducted.
http://www.sec.gov/answers/hedge.htm
http://smallbusiness.findlaw.com/business-forms-contracts/be3_8_1.html
Reminder and Disclaimer: A Due Diligence checklist is not one-size-fits-all; the checklist must be prepared for each unique situation. These examples are simply to get your creative juices flowing.
Due Diligence is increasingly being conducted online via virtual data rooms. The reason for this is simple: when conducting due diligence it is paramount that you get the right people, the right information at the right time.
Virtual Data rooms allow business and individuals to prominently display structure and categorized information which can considerably improve value by shorting deal times, reducing transaction costs, and enable the free exchange of information.
his sort of combination of organized material in an online presence, was once on available to the largest deals, but now has become readily available for small to mid sized transactions because of the web-based marketing platform.
This combination of accurate information and its instant availability through online deal rooms assure that the right information is getting to the right people at the right time.
For more information about virtual data rooms please see www.v-rooms.com or request a walkthrough by filling out the form at the top right of the page.
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