Due Diligence and Law

The tasks for the lesson:
1) learn the glossary to the text and be ready to explain meanings of the words;
2) watch the video carefully and be ready to do the test at the lesson;
3) be ready to discuss the difference(s)between the DD and LDD.

Vocabulary

due diligence – a comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish assets and liabilities and evaluate commercial potential; reasonable steps taken by a person to avoid committing a tort or offence.

M&A (mergers and acquisitions) – is a general term that describes the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, consolidations, tender offers, purchase of assets, and management acquisitions.

be held liable – having (legal) responsibility for something or someone. When liable refers to legal responsibility, it’s used with “for”: “You’re liable for the court costs” (meaning you have to pay them).

to be prosecuted – to get legal action against for redress or punishment of a crime or violation of law
If someone is prosecuted they are being tried in a court of law.

the validity – the state of being legally or officially binding or acceptable.

buzzwords – a word or phrase, often an item of jargon, that is fashionable at a particular time or in a particular context.

a business partnership – a legal relationship that is most often formed by a written agreement between two or more individuals or companies.

bank loan – a sum of money borrowed by a customer or business from a bank.

Unresolved Litigation – any dispute between the Respondent and any other party adverse in interest, including third party and cross-claims, where either a legal proceeding has been commenced for an injunction, a mandatory order, a declaration or the recovery of money, or a threat of legal action has been made in writing.

Background screening – the process of investigating the backgrounds of potential employees and is one of the most informative ways to collect the data quickly and efficiently in order to help companies make informed decisions regarding prospective job applicants.

Due diligence is a process of verification, investigation, or audit of a potential deal or investment opportunity to confirm all relevant facts and financial information, and to verify anything else that was brought up during an M&A deal or investment process.  
Due diligence is completed before a deal closes to provide the buyer with an assurance of what they’re getting.

Examples of ‘due diligence’ in a sentence: It spent a marathon two years on due diligence…. I have an open mind and our own due diligence has been reasonably satisfactory…. The company is expected to spend two months on due diligence.

More details are HERE