Due Diligence refers to a comprehensive investigation process conducted when a company or individual considers entering into a transaction with another party. The main purpose of due diligence is to ensure that all information presented by the other party is accurate and reliable. Typically, the due diligence examination involves a thorough assessment of the financial, legal, and operational aspects of the other party's business.

During the due diligence process, various factors are evaluated. These may include financial records, contracts, licenses, employee files, tax returns, patents, trademarks, intellectual property, environmental compliance, and much more. Due diligence examination can also encompass a review of customer relationships, supplier and distribution agreements, as well as business plans and strategies.

By conducting a thorough due diligence examination, potential risks and opportunities associated with the transaction can be identified. The findings of the investigation assist the party conducting due diligence in making an informed decision on whether to proceed with the transaction or not. Therefore, due diligence examination is an essential component of the transaction process.

There are various types of due diligence examinations depending on the nature of the transaction. For example, financial due diligence focuses on the financial aspects of the business, commercial due diligence concentrates on the operational aspects of the business, and legal due diligence centers on the legal aspects of the business.

In summary, due diligence is a critical process that should be performed in any transaction. It helps ensure that all parties have a clear understanding of the transaction and that all presented information is accurate and reliable. Thorough due diligence examination can help minimize potential risks and maximize opportunities to facilitate a successful transaction.