Due Diligence Primer for Buying or Selling a Business

Continuing on the prior months’ themes concerning purchase and sale of businesses, this month’s article is on select due diligence of buyers purchasing businesses that include real estate.

The following is a list of the types of due diligence materials that a buyer should be reviewing (and the seller should be providing):

  1. Seller entity information
  2. Financial Information
  3. Physical Assets
  4. Real Estate (owned and leased)
  5. Intellectual Property
  6. Employees and Employee Benefits
  7. Licenses and Permits
  8. Environmental Due Diligence
  9. Taxes (including verification)
  10. Material Contracts
  11. Customer Information
  12. Litigation
  13. Insurance Coverage

This list is not comprehensive but gives you an idea of the minimum types of documentation that a prudent buyer should be prepared to review and the documentation a seller should be willing to provide (under a confidentiality agreement, of course, or a binding agreement containing confidentiality provisions).

[This article is not to be construed as legal advice and does not create an attorney-client relationship.]