This form of due diligence involves examining records, financial data, such as past audited statements and future projections of the target and questioning their basis.

As financial due diligence is typically carried out before the merging or acquisition of a company, think of our service as a risk assessment tool that verifies whether a deal is worthwhile.

The process will involve

A Business Review – when it was incorporated, and where it resides (what jurisdiction applies), and what it does.

An Asset Review – what if any assets it has and how were they valued.

A Taxes Review – what taxes are relevant (PATE, VAT Corporation tax and SDLT), if all returns and payments are up to date.

A Corporate records review – are the commercial and financial records of the target in our opinion, well maintained, and are enough to show and explain the transactions of the target and disclose at any time the financial position of the company.  Consequently, the records can be relied on to prepare the audited financial statements to the Accounts Date and the management accounts to closure. We also look at what constitutes something to be a variable cost and how they calculated their sales forecast.

Tax Warranties and Covenants Review – are the tax warranties and covenants enough.

Indebtedness review – we will review the apportionments of all debts and liabilities to be netted off against the purchase price.

Supplier, customer information Review – we will review the list of all material customers and volume of income given to us and check that they appear to be complete and accurate. We will review the list of all material suppliers and volume of purchases and check the arrangement in place regarding the management charges if any.

Employment Review – we will review all employment contracts and make sure that they all up to date and all payroll records accurately reflect the contracts

Compliance Review – we would summarise the target’s tax position and if there are any investigations outstanding and if there have been any errors or omissions.