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Q.During the due diligence process, what are some significant warning signals?

A.During the due diligence process, you need to spot whether the seller has:

  1. Imposed an unrealistic time frame for the transaction.
  2. Withheld key information.
  3. Limited access to information and people.
  4. Provided unclear or biased reasons for selling.
  5. Presented information that is significantly misleading or false.
  6. Displayed a lack of commitment to remain after the sale.

If any of these signals are present you should be wary of completing the transaction and either pass on the deal or increase the amount and extent of due diligence procedures to ensure a realistic assessment of the business.

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