Handling FDD and LDD
WHY DUE DILIGENCE ?
Do you Know!! If you are looking for angel investors or foreign funding then as a start-up you must be ready for due diligence. Due Diligence is a process through which a prospective investor ensures about what is he investing into i.e. all the risk which are associated with the business. Different types of diligences are Commercial, Legal, Financial, Management etc.
MAIN OBJECTIVES OF DUE DILIGENCE :
- Identification of Risk (Internal or External)
- Check the integrity of the business
- Help in the valuation process
PROCESS OF DUE DILIGENCE
Based on the nature of business a prospective investor may bring in a team of financial experts, lawyers, engineers, bankers and others to go through all information and to process the information minutely. For this due diligence, all start up’s must be fully prepared so they don’t have to negotiate the terms of a spectacular deal which they can grab.
Due Diligence is a lengthy process which can take weeks to a few months to complete the process and give the investor a sense of comfort.
Due Diligence is a lengthy process which can take weeks to a few months to complete the process and give the investor a sense of comfort.
Financial Due Diligence (FDD)
Financial Due Diligence (FDD) is a process which involves reviewing the historical and forecasted financial performance of the company which has been projected to the prospective investors. It is done to ensure that accounting and financial systems are well in place. Initially reports such as Accounts, Tax Returns, Annual Reports, Directors Reports, Minutes of Meetings, Resolutions are required to go through the papers.
AREA OF CHECKING :
- Historical Financial Analysis (Audited Statements)
- Current Financial Analysis
- Financial Forecasts and assertions.
- Internal Control Systems
- Company’s Taxation System
- Working Capital Arrangements and capital expenditure reports
LEGAL Due Diligence (lDD)
Legal Due Diligence (LDD) is a process which involves reviewing all the legal risks associated with the business. Generally, Legal Due Diligence (LDD) is carried out by a team of lawyers.
AREA OF CHECKING :
- Employee Agreements
- Non-Disclosure agreements and Non-Compete agreements.
- Contracts with suppliers, vendors, customers etc.
- Loan documents and Bank guarantees.
- Company Documents such as Memorandum of Association, Articles of Association, Certificate of Incorporation, Shareholder’s Agreement.
- Intellectual Property Rights such as Trademarks, Patents etc.
- Different Licences and Compliance Documents.
- Lease Agreements/ Ownership Documents.
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WE ARE THE LEADERS IN THECFO SErvices!
Role of Due Diligence is to provide the investor with a level of confidence and comfort in relation to the integrity of financial and legal information provided to them. We know managing so much legal and finance can be a burdensome task. Worry not we have got you covered, you just focus on your Start up ideas and implementation of the idea and leave the rest to us as our Legal and Finance Team is well trained and possess expertise in handling all the complex paper works and formalities. We can handle all the queries related to LDD and FDD’s.