Due diligence generally refers to the care a reasonable person should take before entering into an agreement or a transaction with another party. Due diligence serves to confirm all material facts in regards to a sale. Due diligence may be of various types: Commercial due diligence – review of industry, market, and business model of the issuer. Reputational due diligence – review of credit worthiness and reputation of individual counterparties. Financial due diligence- review of tax, financial position, policies and internal controls. Legal due diligence – review of documentation to identify potential legal issues that may be risks/impediments to the (i) transaction or (ii) in the general operations of the issuer, that may affect the value or consideration in connection with the transaction.