A sale or merger can selecting the perfect boardroom software be a major milestone for a business. It can also lead to serious problems. Legal liabilities, financial losses and reputational damage are all possibilities. In the end, it's crucial that businesses be sure to analyze any new business venture by undergoing thorough due diligence.

Due diligence is a procedure which identifies risky factors. These risk factors are dependent on the nature and type of the business. A financial institution or bank for instance, might require more due diligence than retailers or e-commerce businesses. A business with a global reach may need to review country-specific laws that affect its operations more than a domestic customer.

Businesses should be aware of the possibility that customers be listed on sanctions lists. This is an essential test which should be done prior to any contract is signed, particularly when the client might be found to be involved in illegal acts such as fraud or bribery.

Other factors to be considered in a due diligence procedure include the reliance on any particular person or entity. The dependence of a business on its owners-managers or key employees can be a red flag that could cause unexpected losses if the employee leaves the company suddenly. The amount of shares owned by senior management is an important factor to take into consideration. A high percentage is an indication of good things, whereas any low percentage is a warning.