The purpose of the due diligence investigation is to assist the buyer to gain a better understanding of the business to be acquired, and to uncover any hidden problems and value that are not otherwise disclosed or realized. Facts uncovered in the investigation can have a material effect on the price offered for the business.

1. General Information
* Articles of Incorporation
* Board of Directors
* Minutes of Board meetings
* Financial Statements
* Public record information
* Credit bureaux reports
* Trade publications, newspaper articles

2 . Financial Information
* Audit reports
* Management accounts
* Contingent liabilities
* Budgets and forecasts
* Taxation
* Debtors and ageing analysis
* Asset register
* Intangible assets

3. Staff and Management
* Employee list
* Terms and conditions of service
* Human resources and labour issues
* Union recognition agreement and issues
* Key managers and employees
* Employee benefits

4. Management Systems
* Accounting
* Payroll
* Production
* Marketing and distribution

5. Other
* Premises and equipment
* Insurance
* Pending litigation
* Pension and provident funds
* Contracts, licenses and agreements
* Intellectual property

Note: This is meant to be an indicative list only, and is not comprehensive. Preferably, a due diligence investigation should be undertaken by experts who have experience. If this is not affordable, use the above list as a guideline and beginning point and consult widely. Ask questions to assure that you understand the business and any associated risks. Remember that management will not want to disclose problems and bad news. Caveat emptor: buyer beware!


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