Recently, my team and I conducted post-takeover due diligence for a 30-year-old company, and we were surprised to encounter multiple major non-compliances. The risk incurred by the investor in this case is a result of inadequate Due diligence before investing in the company. 🔷Due diligence is an important exercise for an investor before acquiring or investing in a company. It is definitely an important step to avoid unpleasant surprises and financial and legal risks. 🔷The report gives an insight about the status of the company including the compliances undertaken so far and also in identifying the non-compliance and its consequences and further facilitates to determine how it shall affect the proposed investment and mitigate the business risk. Key aspects under legal due diligence : ➡️Corporate Structure and Governance  ➡️General Corporate history and management ➡️Related Party Transaction ➡️Financial Documents ➡️Borrowings and Advances ➡️Legal and Regulatory Compliances ➡️Anti Corruption, Anti-bribery and Anti- Money laundering policies ➡️Tangible Property ➡️Intangible Property ➡️HR policies  ➡️Employment contract and matters ➡️Key Business Contracts ➡️Legal Proceedings ➡️Insurance and allied matters ♦️In this case the investor without conducting a proper due diligence invested in the company based on the trust and relation with the shareholder. The visible gap in Indian market still exists due to lack of structured documents and processes interfering with business and friendly relation between the parties. ♦️Inadequate due diligence before making any investment shall not only lead to financial risk but shall also hamper the reputation and attract unnecessary setbacks. ✅I will be sharing a detailed due diligence checklist in the following post.  Feel free to connect with me to discuss any queries or you may reach out for any required assistance.