Corporate Due Diligence Checklist: Keep Yourself Covered
30 Oct 2018
In the corporate world, success often comes down to doing your homework. The old saying “knowledge is power” definitely rings true, especially when it comes to mergers, acquisitions and investments.
To be sure that you’re making the right move, you’ll need to know as much as possible about the company that you’re getting involved with. Completing a “due diligence” process allows a potential buyer or investor to learn more about a company in order to finalise a transaction or investment.
To put it simply, due diligence arms you with the information you need to ensure that you’re not going into a major investment or acquisition blind - or just relying on trust and “good faith”. Done properly, it can save you from making bad decisions and help protect your long term viability.
By doing so, you’ll be able to effectively evaluate the deal’s strategic and commercial potential. It’ll also help ensure that the deal is priced correctly.
A proper due diligence process will explore the ways in which the company will fit in strategically with your current business both now and into the future.
This includes factoring elements such as HR, integration & transition, technology, marginal costs and general work culture.
This will typically involve a review of: patents, copyrights, trademarks, domain names, trade secrets, and licences & licensing agreements.
We won’t go into the full list of documents to be reviewed, but it’s vital that you engage an experienced and qualified legal team to thoroughly review all contracts currently in place.
During this process an employment lawyer will generally review all employee contracts, benefits and policies.
As you can see, doing a thorough job of your due diligence requires a lot of work and specified legal expertise. Get it wrong or skip over any of the parts we’ve mentioned and you risk exposing you company to the negative consequences of a bad investment (such as wasted investment capital, fines or expensive litigation).
At Murfett Legal we have the experience and personnel required to make sure that your due diligence process arms you with all of the information you need to make the right decisions.
With our corporate & commercial law team on your side you can rest easy knowing that you’re working with a trusted partner that will leave no stone unturned in our investigations. Don’t risk getting blindsided by unknown factors.
Get in touch today to find out more about how we can help you perform outstanding corporate due diligence.
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To be sure that you’re making the right move, you’ll need to know as much as possible about the company that you’re getting involved with. Completing a “due diligence” process allows a potential buyer or investor to learn more about a company in order to finalise a transaction or investment.
To put it simply, due diligence arms you with the information you need to ensure that you’re not going into a major investment or acquisition blind - or just relying on trust and “good faith”. Done properly, it can save you from making bad decisions and help protect your long term viability.
What Is Due Diligence Exactly?
Due diligence is a thorough appraisal of a business that a potential investor or buyer will undertake before engaging in a business deal. If you’re the party doing the buying or investing, your lawyer will review the target company’s assets & liabilities, structure, operations and key business relationships.By doing so, you’ll be able to effectively evaluate the deal’s strategic and commercial potential. It’ll also help ensure that the deal is priced correctly.
Your Due Diligence Checklist
Every deal is different, and the depth of the due diligence process needed will vary depending on the company involved and the dynamics of the deal. That being said, the following areas should be included on any thorough due diligence checklist.-
Corporate Structure & General Matters
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Taxes
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Strategic Fit
A proper due diligence process will explore the ways in which the company will fit in strategically with your current business both now and into the future.
This includes factoring elements such as HR, integration & transition, technology, marginal costs and general work culture.
-
Intellectual Property
This will typically involve a review of: patents, copyrights, trademarks, domain names, trade secrets, and licences & licensing agreements.
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Material Assets
-
Contracts
We won’t go into the full list of documents to be reviewed, but it’s vital that you engage an experienced and qualified legal team to thoroughly review all contracts currently in place.
-
Employees and Management
During this process an employment lawyer will generally review all employee contracts, benefits and policies.
-
Litigation
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Compliance & Regulatory Matters
As you can see, doing a thorough job of your due diligence requires a lot of work and specified legal expertise. Get it wrong or skip over any of the parts we’ve mentioned and you risk exposing you company to the negative consequences of a bad investment (such as wasted investment capital, fines or expensive litigation).
At Murfett Legal we have the experience and personnel required to make sure that your due diligence process arms you with all of the information you need to make the right decisions.
With our corporate & commercial law team on your side you can rest easy knowing that you’re working with a trusted partner that will leave no stone unturned in our investigations. Don’t risk getting blindsided by unknown factors.
Get in touch today to find out more about how we can help you perform outstanding corporate due diligence.