DUE DILIGENCE AND ITS IMPORTANCE 

What is Due Diligence? 

 

Due diligence in a broad picture is an investigation or audit of a potential business partner , service provider or investment to confirm all relevant facts, such as  legal status of the subject , financial records plus  anything else deemed material based on the nature of business or the specifications of the country you are dealing with. 

 It refers to the care, a reasonable person should take before entering into any interactions,  agreement or a financial transaction with another party. Due diligence can also refer to the investigation a seller does of a buyer; items that may be considered are whether the buyer has adequate resources to complete the purchase, as well as other elements as such the purchased item is whether subject to any Exports/ Re- Exports Controls? 

In the investment world, due diligence is performed by companies seeking to make merger and/or acquisitions by external legal and compliance counsels, by equity research analysts, by fund managers, broker-dealers, and of course by in-house team of the investors. 

The Due Diligence Process

As legal and compliance experts we perform Due Diligence on third parties  which the elements covered are :

Corporate standing of Third party: 

This will include full details of the registered entity, shareholders, board members,registered capital, scope of activities and any changes made to the corporate structure in the past.

The corporate standing will also include financial and tax status of the subject to the extent that these information are available to the public or attorneys.    

  

Sanctions Check: 

Due to the unique status of Iran in respect to the international sanctions and although the main parts of the sanctions have been removed in light of the JCPOA, yet the other sanctions remain in place against certain natural persons or entities a.k.a SDNs. 

In order to ensure full compliance of our clients business operations with or within Iran, we provide full research on DD subjects from Sanctions perspective. That includes companies, main shareholders and board members. 

Media Search: 

In addition to the items above , we complete our search with a media standing status report of the subject of the Due Diligence. 

Compliance Risk Assessment: 

Based on the Due Diligence reports, Nature of the business or product and other business aspects including but not limited to money transaction routes we provide a detailed legal/ compliance risk assessment report. 

Other items of reports: 

Upon client request a Due Diligence report may also contains the fact check on below items: 

Information about Industry  and Competitors , Market entry models and specific regulations of the industry/ sector.

Management, Key persons, Key skills 

We look at consolidated bios of top managers to see what kind of broad experiences they have; this information may be found on the company's website or on professional databases.

 Stock Price History:

If the topic is a listed company in Iran Exchange Market  and in case our clients want to nail down just how long all classes of shares have been trading, and both short-term and long-term price movement we will run a Stock Price History check. The report will include repossess to : 

 Has the stock price been choppy and volatile, or smooth and steady? What was the price three and six months and one, two, three, five and 10 years ago? Is it rising or falling? Does this history match its profit trends? All this outlines what kind of profit experience the average owner of the stock has seen, which can influence future stock movement. Stocks that are continuously volatile tend to have short-term shareholders, which can add extra risk factors to certain investors. 

For further questions on Due Diligence Services , contact our experts.

E:info@andishehconsulatncy.com

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