A due diligence checklist is an essential element of the M&A process. It assists acquirers in avoiding costly and time-consuming blunders by revealing the company’s liabilities, unreliable contracts, intellectual property issues, litigation risks and much more. It also assists them in determining whether the deal is a good fit from a cultural anonymous about insights for strategy optimization through virtual data rooms perspective.

Creating a due diligence questionnaire (DDQ) can be daunting, especially for small businesses who have never had one before. It’s important to be thorough, but not so overpowering that the company becomes not able to respond.

While the list of documents that can be requested is vast and diverse, some basic requirements are generally included. These include three to five years of tax return and financial reports, insurance policies or employment contracts, and copies of the bylaws or operating agreement.

Having these in place can aid in making the DDQ process more efficient for both the buyer and seller. It can also help reduce the chance that sensitive data is shared without proper security measures in place.

The due diligence process can be stressful, but with right plan it can be made as easy as it is possible. Talk to your M&A advisor to determine the items that buyers are likely to want and prepare those documents before the sale process can proceed quickly. For more details on how to prepare your business for the sale to be successful, contact the Allan Taylor & Co team today!