It is essential to carefully review any existing risks, particularly before purchasing shares in companies or investing in real estate. This is achieved by means of a due diligence review. During the course of the review, the strengths as well as the weaknesses of the object of purchase are precisely examined and analysed. This data forms the basis for ascertaining both the risk associated with the transaction and a reasonable purchase price. The scope of this kind of due diligence review can be determined by buyer and seller.
A due diligence review involves, for instance, a comprehensive market analysis, a detailed inspection of finances, employment contracts, tax implications, a review of existing patents and copyrights, the legal structure of the company or, where applicable, also a review of possible environmental risks. A clear report is compiled from all of these findings, which paints a lucid picture of the planned transaction for the buyer and seller.
A due diligence review must also be carried out before an initial public offering, for example by way of issuing a bond. This is particularly relevant for potential investors in this kind of undertaking so that they are able e.g. to examine whether the investment will retain its value.
Since many details have to be observed in the context of a due diligence review, it is advisable that it be carried out with the help of competent lawyers. GRP Rainer lawyers examine all relevant existing risks in connection with the planned purchase or issuance and are of course also able to assist in drawing up contracts and providing any further legal support.
A due diligence review is also recommended for sellers, as a reasonably achievable selling price can be determined for the object in question based on the data. Moreover, the necessary data would already be available during the sales negotiations and, where applicable, would not need to be prepared at this stage for this purpose.