What Steps Companies Take to Establish an Investment


There are a number of companies that are looking to establish the legitimacy of a certain investment they make. In order to make an investment legitimate, they will need to follow a number of steps. These are the steps required to get an investment made. Companies therefore complete the process of due diligence whenever they are looking to make any private equity investment.


The first step that a company will need to do in order establish an investment is to first record all of the company details. On a regular basis, companies will need to record information such as financial data, ownership and shareholder data, and also tax records. These are necessary to help prove the financial standing of the company and what they are looking to invest in. After completing the step of recording data, they will then need to proceed to the next steps.


A company that is looking to complete the due diligence process of a private equity investment will need to get copies of their corporate records, usually handled by a hired firm like Corporate Resolutions. One of the most important corporate records that a company will need to obtain and provide is the articles of incorporation. This is a set of documents that list the vital business information. The information will include the company name, startup date, owner/shareholder information and also the type of business and industry it operates in. As well as this information, the bylaws will also be included in the articles of incorporation.


Whenever a company is looking to make an investment valid and complete the due diligence process, they will need to gather their corporate stock documents. A company will need to get the minute books which record all of the activities that take place during meetings. They will need to get stock ledgers which provide detailed information about the stock they issue. It will also be important to gather treasury documents, rights agreements, debt equity security agreements and also stock options and rights.


Any time a company is looking to complete its due diligence on an investment, they will also need to gather financial information and tax schedules. One of the most important things that they will need to get is financial statements such as the balance sheet and the income statement. It may also be necessary to get the statement of cash flows as well. Along with the financial statements, companies will need to provide tax returns as well as sales reports.


If a company decides to hire a new executive, they will need to provide information about them. It will be necessary to provide the name, title and position in the company. Organizations are required to determine if the executive is a shareholder as well. Once an executive is named to the management team, they will then be asked to participate in the recording and gathering of all corporate information. As a result, the company will have the means to provide legitimate information to make a private equity investment. This will complete the process due diligence when it comes to making any corporate investment.

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