1. due diligence

The purpose of commercial due diligence is to help both or more parties to a transaction or cooperation, to fully understand the real situation of each other, to assess the value, risk and potential of the transaction or cooperation, and to provide a basis and recommendations for decision-making. The purpose of commercial due diligence determines the focus and direction of commercial due diligence, and also determines the service content and scope of commercial due diligence consulting. Therefore, the first principle and norm of commercial due diligence consulting is to clarify the purpose of due diligence, formulate a due diligence plan according to the purpose, and provide customers with targeted due diligence consulting services.

When conducting business due diligence consulting, Shangpu Consulting will first communicate with customers to understand their needs and expectations, and clarify the purpose and background of due diligence. For example, the customer's due diligence may be:

-To acquire or invest in an enterprise or project, it is necessary to assess its financial, legal, tax, market, technical and other aspects of the situation, determine its value and risk, and provide support for the negotiation of the transaction price and terms;

-To cooperate or alliance with an enterprise or institution, you need to understand its strategy, organization, culture, business, capabilities, etc., determine the suitability and feasibility of its cooperation, and provide reference for the formulation of cooperation models and agreements;

-To sell or divest an enterprise or asset, it is necessary to demonstrate its financial, legal, tax, market, technical and other advantages, improve its attractiveness and competitiveness, and provide guarantee for the success and efficiency of the transaction;

-To carry out internal restructuring or reform, it is necessary to conduct self-examination and evaluation of its own financial, legal, tax, market, technical and other aspects, find its problems and deficiencies, and provide basis and suggestions for improvement and optimization.

According to the different due diligence purposes of the client, Shangpu Consulting will formulate the corresponding due diligence plan, including determining the scope, method, process, time, personnel, resources, cost, etc., as well as the expected results and output of the due diligence. Champ Consulting will fully communicate and consult with customers to ensure that the due diligence program meets the needs and expectations of customers, as well as the principles and norms of due diligence.

2. Range

The scope of commercial due diligence refers to the aspects and contents that should be covered when commercial due diligence is carried out, as well as the data and information that should be collected and analyzed. The scope of commercial due diligence should be determined according to the purpose of due diligence and the characteristics of the target. It should not be too narrow, ignore important aspects and content, or be too broad, wasting time and resources. The second principle and norm of commercial due diligence consulting is to reasonably determine the scope of due diligence, collect and analyze data according to the scope of due diligence, and provide customers with comprehensive, in-depth and systematic due diligence consulting services.

When conducting commercial due diligence consultation, Shangpu Consulting will reasonably determine the scope of due diligence according to the purpose of due diligence and the characteristics of the target, which generally includes the following aspects:

-Financial aspects: mainly related to the financial position, financial statements, financial policies, financial risks, such as income, costs, profits, assets, liabilities, cash flow, financial ratios, audit opinions, financial forecasts, etc;

-Legal aspects: mainly related to the legal status, legal documents, legal risks, etc. of the target, such as company registration, equity structure, contractual agreements, intellectual property rights, litigation and arbitration, compliance and compliance, etc;

-Tax aspects: mainly related to the tax status, tax documents, tax risks, etc., such as tax registration, tax declaration, tax accounting, tax benefits, tax disputes, tax planning, etc;

-Market: mainly related to the market situation, market analysis, market risk, etc. of the target, such as market size, market structure, market demand, market competition, market trends, market opportunities, etc;

-Technical aspects: mainly related to the technical status, technical analysis and technical risks of the target, such as technical level, technological innovation, technology protection, technology transfer, technology assessment, technology strategy, etc.

According to the scope of due diligence, Champ Consulting collects and analyzes relevant data and information of due diligence targets, including public data and information, such as official websites, media reports, industry reports, market research, etc., as well as non-public data and information, such as internal documents, financial statements, contractual agreements, patent certificates, management interviews, etc. Champ Consulting will verify, sort out, summarize, analyze, compare, evaluate and summarize the data and information collected in order to make due diligence.Conclusionand recommendations. According to the importance and relevance of the scope of due diligence, the Shangpu consultation will give different weights and priorities to ensure that the due diligence is comprehensive, in-depth and systematic.

3. due diligence method

The method of commercial due diligence refers to the technology and means that should be used, as well as the steps and processes that should be followed when conducting commercial due diligence. The method of commercial due diligence should be chosen according to the purpose and scope of due diligence, and should not be too simple, leading to inaccurate and unreliable due diligence, nor too complex, leading to inefficient and costly due diligence. The third principle and norm of commercial due diligence consulting is to select the appropriate due diligence method, implement and monitor due diligence according to the due diligence method, and provide customers with accurate, reliable and efficient due diligence consulting services.

When conducting commercial due diligence consultation, Champ Consulting will select appropriate due diligence methods according to the purpose and scope of due diligence, which generally include the following:

-Document review: mainly by consulting the relevant documents of the due diligence object, such as financial statements, legal documents, tax documents, market reports, technical documents, etc., the basic situation and important matters of the due diligence object are solved, the advantages and disadvantages of the due diligence object are found, and the risks and opportunities of the due diligence object are identified;

-Data analysis: mainly through the use of statistics, economics, finance, management and other related theories and methods, the relevant data of the due diligence object, such as financial data, market data, technical data, etc., to carry out quantitative and qualitative analysis, evaluate the value and potential of the due diligence object, and predict the future development and performance of the due diligence object;

-Interview survey: mainly through face-to-face or telephone or online interviews or questionnaires with relevant personnel of the due diligence target, such as management, employees, customers, suppliers, partners, competitors, etc., to obtain the first-hand information and opinions of the due diligence target, verify the authenticity and credibility of the due diligence target, and understand the strategy, organization, culture, business, ability, etc. of the due diligence target;

-Field investigation: mainly through personal visits to the relevant places of the due diligence object, such as offices, factories, warehouses, stores, project sites, etc., on-site observation and inspection, inspection of the physical assets and operating conditions of the due diligence object, feeling the working environment and atmosphere of the due diligence object, and finding the problems and hidden dangers of the due diligence object.

According to the due diligence method, the Shangpu consultation meeting formulates the implementation plan and monitoring mechanism of due diligence, including determining the timetable, milestones, division of responsibilities, communication methods, risk control, etc., to ensure the accuracy, reliability and efficiency of due diligence.

4. due diligence report

A commercial due diligence report is a document summarizing and presenting the process and results of due diligence after the completion of the commercial due diligence, as well as a document based on the due diligence report.Conclusionand recommendations. Commercial due diligence reports should be prepared in accordance with the purpose and scope of due diligence, and should not be too brief, omitting important information and views, or too long, drowning out key information and views. The fourth principle and norm of commercial due diligence consulting is to prepare clear due diligence reports, provide valuable due diligence opinions based on due diligence reports, and provide useful, interesting and influential due diligence consulting services to clients.

When conducting commercial due diligence consultation, Champ Consulting will prepare a clear due diligence report based on the purpose and scope of due diligence, which generally includes the following parts:

-Cover page: including basic information such as the title, date, author and recipient of the due diligence report;

-Table of contents: including the titles and page numbers of the chapters and appendices of the due diligence report;

-Summary: including a summary of the background, purpose, scope, methodology, conclusions, recommendations and other main elements of the due diligence;

-Body: including detailed description and analysis of all aspects and contents of due diligence, such as financial, legal, tax, market, technology, etc., as well as the overall assessment and comprehensive recommendations of due diligence;

-Appendix: includes supplements and explanations of relevant data and information, such as data tables, charts, documents, interview records, etc.

Based on the due diligence report, Champ Consulting will provide valuable due diligence advice, including an assessment of the value, risk and potential of the due diligence object, a judgment on the feasibility and suitability of the transaction or cooperation, a recommendation on the price and terms of the transaction or cooperation, and tips on the next steps and precautions for the transaction or cooperation. Champ Consulting shares and discusses due diligence reports and opinions with clients, answers their questions and concerns, and helps them make informed decisions and actions.

Conclusion

Commercial due diligence consulting is a professional service that needs to follow certain principles and norms to ensure the quality, efficiency and fairness of due diligence, and to avoid due diligence errors and risks. This paper discusses the principles and norms of commercial due diligence consulting from four aspects: due diligence purpose, due diligence scope, due diligence method and due diligence report, and combines the experience and cases of Shangpu Consulting in commercial due diligence consulting to show how Shangpu Consulting follows and practices the principles and norms of commercial due diligence consulting to provide customers with high-quality, efficient and high-value commercial due diligence consulting services. Shangpu Consulting is a professional business consulting agency with rich experience and capabilities in business due diligence consulting. It provides customers in all walks of life with a full range of business due diligence consulting services to help customers achieve the success and benefits of business transactions or cooperation.