If you are Thinking of Negotiating With Another Company Think 'Due Diligence'

Author:Mr Eduardo Trueba C.
Profession:Pellerano & Herrera

Corporate subsistence, in an economy that each day becomes more competitive, dynamic and integrated to the global world in which we live, has exponentially increased corporate mergers and alliances, together with similar transactions, such as stock acquisitions from one company for another's capital, company, know how, and royalties transfers, among others.

When involved in this type of corporate operations, a detailed analysis, on the part of the investor company, of all relevant information and documentation of the company to be transferred, or that will merely disappear after its merger with the former, may represent the difference between success and failure of the operation in question.

It is in these cases, that the process called "due diligence" becomes important. This may be described as the study or legal audit performed by a multidisciplinary team of professionals which makes an in-depth investigation of information relevant to all key areas of a society. This process has become an integral part, not only of all corporate transactions, but of all types of investments and projects, such as investments in the stock market, real estate acquisitions, software purchases, among others. In summary, it constitutes an essential tool for investors, since access to better information results in sound decision making...

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