The following due diligence checklist provides an organized way to learn about a company's assets, liabilities, contracts, potential problems, and risks. This is a partial list and is not intended to be so comprehensive that it covers every type of business and every situation.

 

1. Organization

• The Company's Articles of Incorporation, including any amendments
• The Company's Bylaws and any amendments
• The Company's minute book, including all minutes and resolutions of shareholders, directors, and executive committees
• The Company's organizational chart
• The Company's list of shareholders and the number of shares owned by each
• Copies of agreements relating to options, voting trusts, and warrants
• A Certificate of Good Standing from the Secretary of State
• A list of all states where the Company is authorized to do business
• A list of all states where the Company owns or leases property, has employees, or conducts business.
• A list of all of the Company's fictitious business name.

2. Financial Information

• Audited financial statements for the last three years, together with any auditor's reports
• The most recent unaudited financial statements, with comparable statements to the prior year.
• Auditor's letters and replies for the past five years
• Any budgets, and strategic plans.
• A schedule of all indebtedness and contingent liabilities
• A schedule of inventory
• A schedule of accounts receivable
• A schedule of accounts payable
• A description of depreciation and amortization methods and changes in accounting methods over the past five years
• The Company's general ledger
• A description of the Company's internal control procedures

3. Real Estate

• A schedule of the Company's business locations
• Copies of all real estate leases, mortgages, title policies, surveys, zoning approvals, variances, and use permits.

4. Other Assets

• A schedule of fixed assets and the locations
• All U.C.C. filings
• All leases of equipment
• A schedule of sales and purchases of major capital equipment during the last three years

5. Intellectual Property

• A schedule of domestic and foreign patents
• A schedule of trademarks and trade names
• A schedule of copyrights
• A description of methods used to protect trade secrets and knowledge.
• A schedule and copies of all consulting agreements, agreements regarding inventions, and licenses or assignments of intellectual property to or from the Company
• A schedule and summary of any claims or threatened claims by or against the Company regarding intellectual property.

6. Employees and Employee Benefits

• A list of employees including positions, current salaries, and bonuses paid during the last three years
• All employment, consulting, nondisclosure, and no solicitation or noncompetition agreements between the Company and any of its employees.
• Resumes of key employees
• The Company's personnel handbook and a schedule of all employee benefits and holiday, vacation, and sick leave policies.
• Summary plan descriptions of qualified and non-qualified retirement plans
• Copies of collective bargaining agreements, if any.
• A description of all employee complaints within the last three years, including alleged wrongful termination, harassment, and discrimination complaints.
• A description of any labor disputes, requests for arbitration, or grievance procedures currently pending or settled within the last three years.
• A list and description of benefits of all employee health and welfare insurance policies or self-funded arrangements.
• A description of the worker's compensation claim history
• A description of unemployment insurance claims history
• Copies of all stock option and stock purchase plans and a schedule of grants thereunder

7. Licenses and Permits

• Copies of any governmental licenses, permits or consents
• Any correspondence or documents relating to any proceedings of any regulatory agency.

8. Environmental Issues

• Environmental audits, if any, for each property leased by the Company.
• A listing of hazardous substances used in the Company's operations, if any.
• A list of environmental permits and licenses
• Copies of all correspondence, notices, and files related to EPA, state, or local regulatory agencies
• A list identifying and describing any environmental litigation or investigations
• A list identifying and describing any known superfund exposure
• A list identifying and describing any contingent environmental liabilities or continuing indemnification obligations

9. Taxes and Tax Returns

• Federal, state, local, and foreign income tax returns for the last three years
• State sales tax returns for the last three years
• Any audit and revenue agency reports
• Any tax settlement documents for the last three years
• Employment tax filings for the last three years
• Excise tax filings for the last three years
• Any tax liens

10. Contracts

• A schedule of all subsidiary, partnership, or joint venture relationships and obligations, with copies of all related agreements.
• Copies of all contracts between the Company and any officers, directors, five percent shareholders or affiliates.
• All loan agreements, bank financing arrangements, lines of credit, or promissory notes to which the Company is a party.
• All security agreements, mortgages, indentures, collateral pledges, and similar agreements.
• All guarantees to which the Company is a party
• Any installment sale agreements
• Any distribution agreements, sales representative agreements, marketing agreements, and supply agreements.
• Any letters of intent, contracts, and closing transcripts from any mergers, acquisitions, or divestitures within the last five years.
• Any options and stock purchase agreements involving interests in other companies
• The Company's standard quote, purchase order, invoice, and warranty forms.
• All nondisclosure or noncompetition agreements to which the Company is a party.