A due diligence check list is a vital part of the M&A process. It can help acquirers avoid costly and time-consuming surprises by revealing a business’s liabilities, problematic contracts intellectual property issues, risks to litigation, and more. It helps them to determine whether a deal is suitable for them from a culture standpoint.

The creation of a Due Diligence Questionnaire (DDQ) is a daunting task, especially for small-sized business owners who haven’t created one before. It is crucial to be thorough but not to the point that the company can’t respond.

While the list of documents to be requested is extensive and diverse, some basic necessities are typically included. Included are three to five years worth of tax returns, financial reports and insurance policies, contracts for employment and click this site about financing mergers copies of the operating agreement or bylaws.

The presence of these measures can assist in making the DDQ process more efficient for both the buyer as well as the seller. Additionally, it can reduce the chance of sensitive information being shared without the appropriate security measures in place.

The due diligence process can be a stressful process, but with proper plan, it can be as simple as it can be. Talk to your M&A advisor to determine what buyers will likely request and ensure that the documents are prepared in advance so that the sale process can proceed quickly. Contact the team at Allan Taylor & Co today to learn more about how to prepare your business for an effective sales process.