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Creating a Due Diligence Checklist

Creating a Due Diligence Checklist

A due diligence checklist is a vital part of the M&A process. It can help acquirers avoid costly and time-consuming surprises by revealing the liabilities of a company, insecure contracts, intellectual property issues, risks to litigation and more. It also helps them determine whether the deal is the right fit from a culture perspective.

The process of creating a due diligence questionnaire (DDQ) isn’t easy particularly for small businesses who haven’t done one before. It is important to be thorough but not to the point that the business is unable to respond.

The list of documents requested could be long, but there are a few basic demands that are always included. These include three to five years of tax returns as well as financial reports, insurance policies as well as employment contracts. a copy of the bylaws or operating agreement.

These could make the DDQ more efficient both for https://goodbyeworld.dev/staying-ahead-of-the-curve-embracing-the-latest-trends-in-virtual-data-room-services-offered/ the seller and the buyer. Additionally, it could reduce the risk of sharing sensitive information without the proper security measures in place.

Although the process of due diligence can be stressful, with proper preparation, it can be streamlined and made as smooth as it can be. Discuss with your M&A advisor to identify what buyers will likely want and get those documents in order prior to the sale process can proceed quickly. For more information about how to prepare your company for an efficient sale, get in touch with the Allan Taylor & Co team today!

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