Due diligence Data Room is the top secure file sharing solution

The Virtual Data Room makes it extremely easy to share the most important information, thus it is an indispensable tool for many business transactions, including Due diligence.

What is Due Diligence?

Nowadays the need to manage the risks of their activities, improve financial management, and formulate a balanced investment policy is becoming more and more obvious for participants in the Ukrainian investment market. The formation of new interconnections between companies, the need to modernize production, develop relations with investors, and the possibility of entering international capital markets have led to the fact that the requirement for transparency of activities today is no longer a fashion, but a mandatory requirement both for companies claiming leading positions in their markets, as well as and for smaller developing companies. A bank granting a loan to a client, an investor intending to acquire a business, a firm entering into a trade contract – they all want to be confident in the reliability and profitability of the transaction. Such confidence can only be based on complete, reliable, and objective information about the financial condition, legal status, and market position of the counterparty company. To collect and analyze the necessary information, the person concerned resorts to a special due diligence procedure called due diligence in world practice.

Due diligence is a procedure for forming an objective view of the investment object, which includes investment risks, an independent assessment of the investment object, and many other factors.

First of all, due diligence is aimed at a comprehensive verification of the legality and commercial attractiveness of the planned transaction, or investment project, however, the completeness of the information provided in this type of verification also plays an important role, which allows investors or businesses partners to more deeply assess all the advantages and disadvantages cooperation.

The goal is to reduce entrepreneurial risks, such as:

  • Default by the debtor;
  • Loss of property;
  • Seizure of property or the application of other interim measures;
  • Recognition of the transaction as invalid;
  • Imposition of foreclosure on the property, securities (shares);
  • Bringing to tax, administrative or criminal liability, etc.

What is the purpose of Virtual Data Room in due diligence?

During due diligence procedures, companies generate vast amounts of digital data that not only need storage space. Public cloud services are simple and practical for sharing files, but they do not provide the level of protection required for all types of data and can even violate compliance guidelines. Thus, Virtual Data Rooms are in high demand.

The process between the first examination, negotiation, and conclusion of the purchase is very complex. In addition, there is time pressure due to set deadlines. The advantages of Data Rooms here are that they simplify the whole process. Individual documents can be given different rights to read, delete or edit. In contrast to a physical data room, only certain content can be called up. 

Duediligence data room has the following functions:

  • single registration of the document, which allows the document to be uniquely identified;
  • possibility of parallel execution of operations – allows you to reduce the time of movement of documents;
  • continuity of document movement – allows you to determine who is responsible for the execution of the document at any time;
  • a single base of documentary information – allows you to exclude the possibility of duplication of documents;
  • security and safety of documents – data encryption allows you to suppress attempts to the unauthorized use of information;
  • a document search system that allows you to find a document with a minimum of information about it.