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In business, Due diligence may refer to the process of research and analysis that takes in advance of a decision.
More specifically, the term refers to the indepth research that takes place before an investment, takeover, or business partnership. Before such transaction takes place (but possibly, after an purchase agreement has been entered int), there is often a period of due diligence in which the buyer and, perhaps, hired specialists (including lawyers, accountants, investment bankers and other consultants), will review a wide array of issues related to the company being acquired.
Such due diligence could include checking for regulatory and licensing problems, identifying liens and judgments, and uncovering civil and criminal litigation matters, conflicts of interest, insider trading and press and public records that identify problems that may have taken place at the company to be acquired.