Know The Types And Actualization Process Of Due Diligence – Due diligence means in the Indonesian language is an inspection activity that is carried out carefully from a legal perspective. Then, due diligence is carried out by whom? In practice, due diligence is carried out by legal consultants for certain companies or transaction objects.

The term for a party conducting due diligence is a due diligence vendor, which is an independent party. They carry out due diligence activities at the request of the seller of the company or legal entity. In practice, due diligence must also be legal, aka Legal Due Diligence (LDD) or also known as Legal Audit. The purpose of due diligence is to obtain an overview of information from legal aspects relating to companies or assets.

Types of Due Diligence

Based on the above understanding, the following are types of due diligence:

1. Full Due Diligence

The first type of due diligence is full due diligence which allows investors or buyers to carry out a thorough inspection. Especially from the legal aspect of the company to be purchased. The things that are examined by the type of full due diligence are:

• Insurance
• Labor
• Wealth
• Shares and Capital
• Third-Party Agreement
• Company budget
• Shareholders, commissioners, and board of directors
• Disputes involving companies and cases of directors, shareholders, and commissioners

2. Limited Due Diligence

Limited due diligence is a type of due diligence that is carried out by checking the law individually. The following items are examined through limited due diligence:

• Some forms of transactions, such as salaries and the purchase of assets
• Asset takeover
• Licensing
• Lending

Due Diligence Actualization Process

You may ask when due diligence is carried out, the due diligence actualization process is like the following stages:

1. Financial Due Diligence

Financial due diligence is an investigation process carried out by a financial consultant or accountant on the condition of a company.

2. Tax Due Diligence

Tax due diligence is a process of examining a company’s tax track record.

3. Environmental Due Diligence

Environmental due diligence is an activity or inspection process on possible risks to the environment. Including possible losses and obligations to protect the surrounding environment.

4. Customer Due Diligence

Customer due diligence is a process of investigating, verifying, and monitoring whether the profile is appropriate, and the characteristics and patterns of existing transactions. This implementation process is carried out by financial service providers.

5. Legal Due Diligence

Legal due diligence is an investigative process carried out by legal consultants to obtain material information. This is done to obtain an overview of the condition of the company and provide an assessment of the legal risks that might occur.

Some of the processes carried out above will be carried out in the following steps:

• Conduct general meetings with commissioners, board of directors, and shareholders to see an outline of the information and stability of the company to be purchased
• Discuss deciding the type of due diligence to be carried out
• The appointed expert or consultant checks several documents that will be the responsibility of the party with the new owner
• Analyze integrity due diligence to see more in-depth information about the business conditions of the company to be selected
• Talk to the company’s customers

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