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Can someone tell me what should be covered in the due diligence process?

Just trying to do some due diligence about the due diligence process :-). I'm not quite sure what all should be covered as I consider a couple of companies for sale. Thanks!

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Answers (3)
Domenic A. Rinaldi
Sunbelt Business Brokers
Premium Broker

Due diligence is as much a process as it is a list of items to be satisfied. There are many due diligence lists available on the internet and most transaction oriented attorneys or accountants can provide you with a useful guideline.
However, of equal importance is having a roadmap and a plan to complete each step of due diligence. Having a detailed plan with estimated completion dates will ensure that the momentum in the deal is maintained while keeping due diligence costs to a minimum. Please reference the below link for further details about conducting due diligence.

Mar 22, 2009
Tony Calvacca, CBI
New York Business Brokerage Inc.
Premium Broker

Due diligence is the process the must buyer complete to in order to to be sure that the business they are buying is in fact what the seller has represented in previous communications both written and oral.

Due diligence can range from relativly simple ( for a small main street business ) to very complex (for a mid-market business) but it is prudent for most buyers to err on the side of caution and conduct a very detailed investigation of every aspect of any business being considerd for acquisition.

A detailed due diligence process could cover over 100 different sub-catagories but the major areas to investigate would be:

Corporate documents
All financial and tax statments
Real Estate and properties
Furniture , fixtures equipment and machinery
Employee policies, benefits , contracts , job descriptions
Marketing , advertising promotion and public relations
Trademarks , trade names Intellectual property
All technical Information related to software and computer systems
All legal issues with special attention to any past ,current or pending litigation

The due diligence period is the critical phase of the deal when it pays to take the time to examine all issues before moving forward to consumate the transaction.

It is also strongly recommended that you use the services of a business transaction or corporate attorney to guide you through this process.

Mar 21, 2009
Andrew Cagnetta
Transworld Business Brokers, LLC.
Premium Broker

Everything! Do a search on the internet, there are some due diligence lists out there. But I HIGHLY recommend you hire a good CPA with diligence experience, and a lawyer to properly perform legal due diligence.

Mar 18, 2009

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