due diligence

The systematic investigation, verification and evaluation of information in order to facilitate a decision regarding a proposed transaction. Performing a due diligence investigation is a standard operating procedure prior to: purchasing a business, investing in a business, awarding an important contract, investing venture capital, loaning money or offering securities. Due diligence can include checking financial references, background checks on key individuals, interviewing current and past clients, checking the legal status of a company and on-site evaluations.

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