Currently the world is in a complicated period between the economic recovery and the crises in major world markets, before this not so pleasant reality, many companies have decided to take the risk involved and expand their business to other global markets in order to survive, as well as going through the establishment of new business alliances within their own territory expanding its portfolio of services. Today in López & James, you will learn what is a Due Diligence and what is the importance of this practice when engaging with new business partners in order to expand your business.
The ‘Due Diligence’ which in Spanish literally translates as ‘debida diligencia’ is the process by which both individuals and companies are responsible for making a detailed review of sensitive and relevant information of that potential ally with whom a joint venture will be developed or that ally to whom a purchase of services or products will be made, therefore, and in order to perform these alliances with total security, a Due Diligence is vital to avoid future inconveniences between both parties in the context of a business or bilateral agreement.
From a technical point of view, Due Diligence is a process aimed at facilitating the decision making process related to whether or not to carry out a specific purchase or sale transaction or to enter into an alliance with a strategic partner.
This process, usually elaborated through a report, compiles a detailed analysis of the financial, legal, fiscal and human resources details of the target company or entity. This type of analysis is usually carried out when there are one or several possible companies with which a future contract could be entered into. It is also important to bear in mind that this is not a mere financial audit, since it extends to more parts of what makes up a company as a whole.
In addition to helping to choose from a wide range of options for doing business, a Due Diligence will also be useful to prevent legal issues with companies from which products are purchased, since such verification is useful to verify both the existence of the target company, as well as its actual production capacity and the size of its factory. Many of our clients have come to us in this way, but we have also worked with companies that require legal assistance due to a breach of contract by a foreign company.
Lopez & James has offices and allies around the world and is able to perform Due Diligence services for those clients who wish to know more about those companies in Colombia and the world with which they wish to contract, our experience has allowed us to develop valuable allies, thus being able to guide them to make contracts with the appropriate partners.
Our team of legal and foreign trade consultants is ready to offer you advice through its virtual channels at any time by e-mail at firstname.lastname@example.org or by calling our fixed telephone number in Bogotá (571) 7498261. For more information, please visit www.lopezjames.com.
About the author:
Carlos Méndez is a lawyer, he is part of the team of Gestiones Empresariales López & James in Bogotá since 2018 and has experience in civil, commercial and labor law.
Languages: Spanish, English and Japanese.
Bogotá D.C. June 10, 2022.