financials, vat reports, payroll, leases, etc. More often than not, this is generally best done by an accountant that specialises in this. They will be able to tie everything together and know what they are looking for. The data that is gathered in this stream will be used to validate the profitability of the company and allow us to calculate the Normalised EBITDA, Normalised Working Capital, excess cash, etc. which are the foundations for the transaction. Tax Due Diligence - This is a specialised form of Financial Due Diligence (FDD) and will generally be done by the same professionals doing financial due diligence. We break it out here as it is critical that a Buyer understand the tax exposure from prior periods when buying a Limited Company so this aspect needs to be looked at by a specialist. Legal Due Diligence - This aspect looks at all of the historical legal aspects of the limited company and any potential risks. Also, any new structures are evaluated in the same context. Similar to tax due diligence, this needs a specialist, as the impact is significant. Operational Due Diligence - This is very specific to the company and also the Buyers requirements. This can be very broad but is basically the Buyer understanding how the business works and will work post sale and taking a view on it. This due diligence stream intersects with the Post Sale Planning stream and tends to be much more conversational and involves site visits, extended discussion and planning sessions. Other Due Diligence Streams - Depending on the company, there may be other streams of work around the IT environment (which will check things like the software license situation), fixed asset (which will check things like viability/expected life), freehold due diligence (similar to when one buys a house), etc. The basic premise is that anything that needs to be checked that has an impact should be albeit in a way that balances cost effectiveness with risk.
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