Articles & Checklists

Due Diligence – Checklist When Buying a Business

Due Diligence – Checklist When Buying a Business

Due Diligence – Checklist When Buying a Business
Due Diligence – Checklist When Buying a Business

Due Diligence – Checklist When Buying a Business.

Due diligence is the process of using reasonable care in evaluating a business under consideration for purchase.

Checklist of Information & Documents to Review

(Note: This is a partial list to get you started. The business that you are considering may not require everything listed or may require additional items. You should get professional advice)

  1. Financial Information
  • Audited Financial Statements for three years.
  • Schedule of Inventory
  • Schedule of Accounts Receivable
  • Schedule of Accounts Payable
  • Analysis of Gross Margins
  1. Physical Assets
  • A schedule of all fixed assets
  • A schedule of all leased equipment
  1. Real Estate
  • Schedule of all company locations
  • Copies of leases
  • Copies of permits & licenses
  1. Intellectual Property
  • Copies of all patents, copyrights, trademarks, & trade names.
  • Description of methods used to protect trade secrets or know-how.
  • Copies of all consulting, licensing, and intellectual agreements
  1. Employees
  • A list of employees including positions, current salaries, salaries and bonuses paid during last three years, and years of service.
  • Resumés of key employees.
  • The Company’s personnel handbook and a schedule of all employee benefits and holiday, vacation, and sick leave policies.
  1. Licenses & Permits
  • Copies of governmental licenses and permits.
  1. Tax Returns
  • Copies of tax returns for the last three years
  1. Products
  • Copy of all products or services provided or under development
  • Summary of warranty claims
  1. Litigation
  • List of all pending litigation
  • List of unsatisfied judgements
  1. Insurance
  • Copies of all insurance carried
All articles provided on this website are for informational purposes and not to be construed as financial or legal advice. Consult you accounting & legal team for advice in selling or buying a business.