LAW SOCIETY
DUE DILIGENCE REPORT
BASIS AND REVIEW OF LEGAL DUE DILIGENCE BY BOJANA BOGOJEVIC
In the present moment when all economies are facing recovery triggered by Covid 19 pandemic I strongly believe a proper explanation of Legal Due Diligence and its necessity for establishing, governing and better understanding of term is highly important. Many of you will upgrade your existing knowledge while others will be newly introduced. We will begin with corporate governance and legal advising. Due diligence is a term used in the Anglo-Saxon dialect to be used for all types of in-depth analysis. Currently, it is mostly used for a comprehensive analysis of the company that is the subject of a particular transaction. It is characteristic that there is no generally accepted and standard legal definition of due diligence. Lawyers would most often define it as a process of examination 14 | eYs Magazine, Winter 2022
and research by a potential buyer which would confirm that the buyer is buying exactly what he thinks he is buying. There are different types of due diligence reports such as: - Legal Due Diligence. - Financial Due Diligence. - Technical Due Diligence. - Commercial Due Diligence. - Operational Due Diligence. - Tax Due Diligence. Current corporate practice suggests that Due Diligence is one of the most important steps taken in the sales transaction process of a company, which only evaluates the sales contract from a financial, legal, and technical point of view. Its implementation is important for the company because it represents a security process that avoids the possibility
of intentional or unintentional misinformation of investors. By preparing the Due Diligence report, it is possible to avoid possible future disputes that may arise during and after the sale of the company. This is possible precisely because Due Diligence allows us to perform a valid analysis of a law firm before, during and after a particular business transaction. If Due Diligence is not implemented, the risk of the sale itself increases, which means that approaching the purchase of a company without a prior procedure of collecting relevant information can result in significant financial losses of investors (investors). Precisely because of all the above, every transaction in the sphere of business requires complete due diligence, because the international and domestic capital markets emphasize the
