Corporate Due Diligence Checklist .
Its essential to do a due diligence process before you get to an agreement with your partner company. Corporate due diligence will enable an investor to have the necessary information regarding the company that they want to be in partnership. Most often the process of mergers and acquisition will require a detailed due diligence . Before getting to finalize any deal the buyer or the seller should make sure to learn key information regarding the company .
Before signing of any contract the buyer should carry out the due diligence process . The information is key to getting the scope on the pricing of the deal . One also get to know the commercial viability of the business . The company will not have to halt its usual business activities for this process as the company’s lawyer is in a position to provide the information to the investor.
Below is some of the information that is essential to any investor . The depth of the information also vary depending on the company and also the type of deal .
The company’s lawyer will carefully review the company’s structure and the general matters . Its crucial for any investor to familiarize themselves with the day to day running of the target company . The company’s books of account should be provided voluntarily for the last five financial years. All the information regarding the company creditworthiness and the current liabilities of the company .
It’s important to know the history of how the company remits its taxes. This ensures that an investor has the knowledge of whether the company oblige in payment of taxes. It will also be beneficial to know the tax amount that will be carried forward when the process of merging happens .
Any investor would also carry out due diligence on the strategic fit of the company . The investor learns about the compatibility or whether the target company is in unison with his current business.
The company’s lawyer should also provide information of any contracts that the company is engaged in . These will include employment contracts, franchising agreement, customers and suppliers contracts just to name a few .
It is key to know the company’s structure and also its employee base . Whether or not the employees will be affected by the merger and acquisition it’s necessary to have that information .
The material asset of the company is also a key factor to consider as an investor . It’s important to determine the total value of all company’s assets and any debts or liability against the assets .
To avoid any surprises an investor should do the due diligence exhaustively .