Conducting a due diligence examination is a fundamental part of buying a business. Without conducting diligence, a purchaser has no way of knowing whether the business is as presented. Typically, the buyer will send the seller a due diligence request list that will ask for the following, among other things:
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Business |
Calls and meetings between the purchaser and the seller, the seller’s management team, and key customers and suppliers. |
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Corporate Documents |
Certificate, bylaws/ operating agreement, subsidiaries list, and other important corporate records. |
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Financials + Tax Records |
Financial statements, budgets, accounting records, payroll records, tax returns, audit records, and other items. |
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Contracts |
Copies of key agreements used in the business, including those with suppliers and vendors, retailers, distributors, service providers, certain employees, and landlords. |
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Customers and Vendors |
Lists of key customers and vendors / suppliers, along with associated revenues, costs, and agreements. |
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Marketing + Sales |
Marketing and sales materials, budgets and strategies, price lists, and competitor research. |
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HR |
HR records, employee / contractor lists (including compensation information and agreements), benefits information, and policies and handbooks. |
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Operations |
Information on real property, insurance policies, manuals, and policies and procedures. |
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IP + Other Key Assets |
List of all intellectual property (IP) used in the business (whether owned or licensed), licensing agreements, software used, websites, domains, email addresses, and phone numbers. |
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Legal |
Any permits used in the business, along with governmental filings and information on any litigation or investigations. |
Supplemental diligence requests are common, and, often, diligence will continue up until closing.
Weavil Law
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