Due Diligence for Business Transactions
Business Attorney in The Woodlands, TX
What is the legal concept of due diligence? Due diligence may be a legal obligation, but more often it refers to the optional process of investigation of the other party, such as when two or more businesses intend to merge or acquire some portions of their business or begin a financial transaction. All parties must take the time to conduct adequate research before finalizing any business or real estate transaction.
When conducting due diligence, each party may share confidential information with each other. In many business and real estate transactions, the first step is to issue and sign a letter of intent will contain the terms of due diligence. Because due diligence involves exchanging confidential information, the letter of intent must include confidentiality provisions. Alternatively, the parties can agree to a separate confidentiality agreement or non-disclosure agreement (NDA).
Due diligence is necessary for the following reasons:
- Offers better understanding of your business
- Evaluates the overall worth of the business or target business
- Assists with drafting all of the necessary and relevant documentation
- Locates any issues that may hinder closing transactions
- All parties have a chance to weigh in on legal opinions
At Dossey & Jones, PLLC, our business lawyers serve The Woodlands, Texas, handling many investigations concerning due diligence. We have a wealth of experience in reviewing contracts and possible liabilities of the target company. Our expertise regarding a wide breadth of experience to make sure that your legal rights are protected in their documents.
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