Write the short notes on following: Need of Legal Due Diligence

Legal Due Diligence provides complete picture of a company through a methodical investigative process. Due Diligence investigations are good at finding liabilities in a company and to uncover the hidden risks. These investigations can help to negotiate a lower price in a business transaction negotiation. Legal Due Diligence is an art of managing a risk of undertaking a major business transaction. It involves maintaining a methodical system for organizing and analyzing the documents, data and information provided by the information provider, and then quantitatively assessing the risks associated with any issues or problems discovered during the process. Only a careful and thorough Legal Due Diligence process will help to avoid legal difficulties, unintended transfer of legal property and other drawbacks. Legal Due Diligence investigations allow getting the current information that is needed to make good business and financial decisions. These investigations help to avoid costly mistakes and can also help to avoid lawsuits caused by a bad business partnership. Investigations such as these can also be crucial in negotiations - by helping cut through business claims to the actual facts about a corporation, they help to get the proof needed to negotiate better terms. The need for legal due diligence may occur in the following occasions Mergers/Acquisitions Corporate Restructuring Corporate Governance related matters IPOs/FPOs Private Equity General Compliance requirement. Commercial agreements Leveraged buy-outs Joint Ventures, etc.