NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.
It is important for any prospective business purchaser to perform due diligence in researching a potential target business. Some of documents you will need to collect and review in your analysis of whether a particular business would be a good acquisition include following types of documents.
1. Corporate and Organizational
o Certified copy of articles of incorporation and bylaws of company and subsidiaries as currently in effect;
o Partnership agreement and any amendments thereto;
o A copy of most current organization chart available of company;
o A list of states and foreign countries (if any) in which Company is qualified to do business; and
o All names under which company has done business in past five years; this includes registered and unregistered trademarks, fictitious name statements (commonly referred to as “d/b/a filings”).
2. Financing Documents
o All loan agreements, debt instruments, and other financing instruments, and all related material documentation, to which company is a party.
o A list of all mortgages, liens, pledges, security interests, charges, or other encumbrances to which any property (real or personal) of company is subject and all related material documentation;
o Schedule of all short-term and long-term debt (including capitalized leases, guarantees, and other contingent obligations).
3. Financial Statements
o All audited and un-audited financial statements;
o Brief description of contingent liabilities involving Company, such as pending lawsuits and threatened litigation;
o Name of accountants and length of relationship with accountants; indicate whether accountants own any interest in or hold any position with Company or its subsidiaries;