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CS Professional · Corporate Restructuring, Valuation and Insolvency · Process of M&A Transactions

Arjun Pharma Ltd is acquiring Brahma Labs Ltd. The deal team examines whether Brahma has unpaid income-tax demands, GST notices, and disputed customs duty. Which type of due diligence is this?

This is tax due diligence. It examines the target's tax demands, GST notices and disputed duties to quantify exposure. HR, environmental and IP due diligence deal with employees, pollution compliance and patents or trademarks respectively, so they do not fit this fact pattern.

  1. AHuman resource due diligence
  2. BTax due diligenceCorrect
  3. CEnvironmental due diligence
  4. DIntellectual property due diligence

Explanation

Reviewing tax demands, GST notices and customs disputes is tax due diligence, which identifies contingent and actual tax exposures. HR due diligence covers employees and contracts, environmental covers compliance and contamination, and IP covers patents and trademarks. None of these match the facts given.

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