Due diligence is evaluating a prospective business decision by making sure that all the facts regarding the firm are available and verified. Due diligence is most often used when buying a business, as the buyer, you go through the financial situation of the business, customer records, legal obligation and other records.
A due diligence is an essential part of the review and assessment of any investment opportunity, disposal, reorganisation or listing of a company. The scope of the due diligence will depend on the size and scale of the transaction, and also the surrounding risks.
The due diligence will often comprise financial, tax, legal, IT, HR and commercial due diligence reviews. getsix® has a proven methodology to manage multi-disciplinary teams in the way how we perform our services in co-operation with our ‘Competence Network’ Partners. Our multi-disciplinary approach ensures that all teams produce one final report, and report into one key manager.
getsix® have access to industry experts both within and outside ‘HLB International’.
The teams of our various ‘Country Desks’ co-ordinate all aspects of the due diligence consultancy and ensure that our experts with the appropriate language skills and know-how, work seamlessly together with our local legal partner law firms worldwide to gain the maximum for our clients.
In addition, through our management consulting services getsix® can also assist our clients in other areas.
Acquisition due diligence – ADD (Buyer-side)
In terms of opportunities and risks, the ADD has the purpose of facilitating the potential purchaser (Buy-side), the evaluation of the economic and financial situation of a target by an independent expert, and of minimising the risk of negative surprises subsequent to the successful conclusion of the transaction, and of providing a solid basis for the upcoming integration process.
During your acquisition you may want to look at any issues surrounding your target company, evaluate their past results and projected performance, find out any risks to the transaction or understand how an acquisition price is determined.
A due diligence is carried out because of various reasons. Generally a due diligence process is carried out during a M&A transactions and investments, however they may also be carried out for other reasons (contractor verification).
Basic scope of due diligence investigation usually covers:
- Gain an understanding of the performance of your target company,
- Identify and analyse the key value drivers behind the acquisition price,
- Identify potential risks,
- Maximise financial and tax positions,
- Help draft price adjustment and warranty and indemnity clauses and implement them,
- Conduct a post-acquisition audit, preparing your opening balance sheet.
Tax due diligence
getsix® experience indicates that identified tax risks can have a significant impact on the market value of the target company and might constitute a crucial argument in price negotiation process. The aim of the tax due diligence is the analysis of the target’s tax treatment in respect of its consistency with Polish tax regulations, legislation of the administrative courts and the instructions issued by the Polish Ministry of Finance. getsix® services in respect of tax due diligence include, in particular, analysis of the target’s tax settlements and social security contributions, in order to identify tax risks and analysis of decisions concerning historical tax controls undertaken by relevant authorities.
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Legal due diligence
The legal advisors of getsix® partnering law-firms can draw on extensive experience in transaction services, particularly when it comes to providing assistance with the M&A processes of small and medium-sized enterprises.
getsix® partner firms can provide the following services include:
- Performance of due diligence;
- Assistance with corporate mergers and disposals, management buy-outs/buy-ins, joint ventures, with a particular focus on the elaboration of acquisition and disposal strategies;
- Compilation of all the necessary documentation;
- Evaluation of potential property disposals, establishment of contacts with potential investors/successors;
- Handling negotiations and preparation of information upon which to base decisions;
- Preparation of contractual documentation.
This includes our corporate law due diligence
Which mainly consists in the reviewing of documents to identify potential legal issues that may present risks and/or impediments to the:
- Transaction, or
- In the general operations of the target.
This could in a certain way affect the value or consideration in connection with the transaction.
getsix® employment & labour law due diligence
Within this getsix® can offer due diligence of employment contracts and civil law contracts for the purpose of reducing the risk of labour law claims and social security claims resulting from:
- individual employment contracts and civil law contracts concluded by the employer;
- internal regulations and collective labour agreements, social packages and agreements concluded with trade unions and employee councils;
- working time and remuneration policies; we also advise on simplification and standardisation of employee remuneration policies;
- collective labour law relations.
- we verify the correctness of performing obligations towards employees’ representatives, trade unions and employee councils. We analyse employment disputes and restructuring processes and inform employers of the obligations resulting from them.
getsix® offer full or limited due diligence, in particular, in case of planned organisational changes and M&A transactions. In both cases, we advise employers on their obligations related to employment restructuring and employees’ transfer to a new employer.
Financial & accounting due diligence
Financial & accounting due diligence is as essential to the acquisition of a business, as maintaining accurate financial records is to your continued fiscal success upon completion of any purchase. When contemplating any capital investment in a private company, it is essential that you carry out a detailed survey of the company’s financial background. getsix® due diligence checks safeguard your business investments by highlighting any potential issues and providing informed background information, ensuring that your financial success is solidified from the ground up.
In supplying you with a detailed due diligence check, getsix® will:
- Provide a detailed analysis of company records;
- Create a thorough checklist of company accounts;
- Unearth any existing or potential business debts;
- Verify financial status, whether in a healthy or unhealthy state.
getsix® respective finance & accounting services:
If you are interested in our finance & accounting services please read more: accounting services.
HR & payroll due diligence
Our HR & payroll due diligence identifies the key employees, examines the compensation and progression plan, the culture and organisation is in place, so that you can prepare the integration of the teams in a more effective way.
The main objective of HR & payroll due diligence is to diagnose the organisation in terms of the consistency and effectiveness of the personnel policy, and to identify potential threats in the area of HR and the quality of payroll processing is performed. Due to the fact that we have extensive experience in how to perform HR & payroll processing tasks in Poland, getsix® are able to identify potential risks employment-related tax and social Insurance compliance matters.
If getsix® clients are planning to outsource the HR & payroll tasks after the successful M&A process, we also assist our clients in providing a transformation strategy with the aim to benefit from our ‘HR & Payroll Solutions’.
The scope of due diligence comprises examining the key areas of HR administration and payroll processing in an enterprise:
- Organisational structures;
- Wages and salaries;
- Personnel policy effectiveness;
- Formal institutional obligations;
- Potential areas of conflict;
- Employment-related tax and payment compliance matters (see as well tax and legal due diligence).
The report contains an analysis of the major threats to the continuation and effectiveness of the personnel policy, including recommendations for proposed solutions.
If you are interested in our HR & payroll services please read more: payroll services.
Vendor due diligence – VDD (Seller-side)
getsix® can streamline your sales process, so that you can get the maximum return on your sale.
We can help you prepare for the sale of your company or business, get the best price, control the flow of information and make the best decisions while maintaining complete confidentiality.
getsix® services include:
- Identifying and prioritising factors to increase the business value,
- Compiling pro forma financial information,
- Analysing past performance and building or reviewing a business plan,
- Organising and managing data to showcase information,
- Providing guidance at each phase of the negotiation process,
- Maximising your financial and tax position,
- Help drafting a price adjustment or warranty and indemnity clause,
- Help managing any potential litigation and claims processes.