The cost of skipping steps
Tax contingencies, undisclosed pending litigation, and change-of-control clauses in third-party contracts are often discovered only after signing, when due diligenceThe process of investigating and verifying a company or asset before a transaction, to identify legal, financial, or operational risks. is carried out in a rush. The cost of fixing these problems after closing is always higher than the cost of identifying them beforehand.
What a complete due diligence process should cover
Ongoing or threatened litigation, contracts with change-of-control clauses, licenses pending renewal, and unprovisioned tax liabilities are the areas that most often hide surprises. The time invested in this phase is typically a fraction of the cost of resolving these issues after closing.
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