Due diligence is a comprehensive investigation of a business by a potential buyer to evaluate the company's financial, legal, and operational aspects. It typically involves a thorough examination of financial records, legal documents, customer contracts, employee records, and other key aspects of the business.
The purpose of due diligence is to provide the buyer with a clear understanding of the business they are acquiring. This helps the buyer to assess the risks and opportunities associated with the business and make an informed decision about whether to proceed with the purchase.