Company Due Diligence in Russia

Company Due Diligence in Russia

Updated on Monday 18th April 2016

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Company-Due-Diligence-in-RussiaInvestors wanting to buy or engage in any other type of relation with a Russian company are strongly advised to perform due diligence procedures before concluding a business in order to verify the company’s legal and financial status. Company due diligence refers to performing a thorough investigation on the company in order to minimize the risks that could lead to an unsuccessful cooperation.

Types of due diligence procedures in Russia

Company due diligence in Russia can be performed on several levels depending on the type of transaction and what the investors want to achieve. Russian company due diligence can be divided into:

  • -       commercial due diligence that can state the business model, the industry and the market the company addresses,
  • -       financial due diligence when the tax filings and the financial situation of the company can be checked,
  • -        legal due diligence when the company’s documentation is checked for any possible legal liability.

Our Russian lawyers can perform the type of company due diligence our clients request.

Why is due diligence required in Russia?

The purpose of due diligence in Russia mainly depends on what the client wants to find out about a company. Due diligence is usually performed when investors require to obtain all relevant documentation regarding the company they are about to enter in a relation with in order to evaluate the risks they are exposed to and to make an informed decision on the future steps to be taken.

Company due diligence is also performed when buying a product or service from another company. Russian company due diligence may also be performed when purchasing a company and details like possible litigations or employment issues need to be addressed.

The legal due diligence in Russia

Shareholders can also order a due diligence process to be conducted on their own company. Legal due diligence is often employed in Russia by companies that want have a better knowledge about their company and that will help them better target customers. Company due diligence is also performed in order to achieve more visibility and to have a better communication with clients. The due diligence process can be very short and it takes a few days and, if it is very complex, it could require more time.

If you want to buy a company or set up a business, you can contact our Russian law firm.