Don’t forget to exercise due diligence (Mergers & Acquisitions)
For all businesses, it’s necessary to carry out a due diligence process when considering significant transactions. Normally associated with mergers and acquisitions, due diligence can be carried out prior to various types of ventures.
Although the due diligence process varies depending on the needs of your business, it typically involves a thorough analysis of the proposed transaction. If your company is considering purchasing a smaller business, for example, due diligence will involve an examination of the business's current financial standing, as well as their history, place in the market and potential future returns.
By exercising due diligence, companies can ensure that they’re making the right decision when it comes to managing their affairs. Following the process, companies will be able to base subsequent decisions on hard facts, thus saving costs and increasing the likelihood of success.
Get professional help with mergers and acquisitions
Merging with another company or acquiring another business is one of the most significant decisions an enterprise can make. If successful, it can result in them becoming a leader in their industry but, if things go wrong, it can have a catastrophic effect on the organisation as a whole.
Due to this, it’s important to get professional help when you’re considering a merger or acquisition. Experienced accountants, for example, are able to carry out the due diligence process so that you’re confident in the information you have access to.
Furthermore, you’ll want to ensure that the information you obtain is completely impartial and not biased in any way. By choosing an external third party, such as an accountancy firm, you can be sure that the data isn’t swayed by in-house opinions.
Obtaining tax advice for your business
Getting the right tax advice is crucial to ongoing business success and it’s particularly important if you’re considering a big business venture. Before merging with another company, for example, you’ll want to examine the impact this will have on your tax liability.
In some cases, it might be beneficial to rearrange the company formation so that your tax liability is reduced and, if so, professional accountants can help you to do this.
Are you considering merging with or acquiring a business? Talk to Melanie our head of Corporate Finance to make sure you're covered...
Melanie Richardson - Managing Partner
Tel: 01825 763366
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