It is important that future business buyers do due diligence when investigating potential target business. Documents that need to be collected and analyzed when analyzing whether a particular business will be a good acquisition include the following types of documents:
Note: This is for informational purposes only. It is not intended to be interpreted as legal advice.
1. Company and Organization
o Certified copy of the articles of incorporation and the articles of incorporation of companies and affiliates currently in force.
o Partnership contract and its amendments.
o A copy of the company's latest organization chart.
o List of states and foreign countries where we exist (if any)
Qualified to do business. And
o All names for which the company conducts business in the past 5 years. This includes registered trademarks and unregistered trademarks, statements of false names (commonly known as "d / b / a applications").
2. Finance document
o All loan contracts, debt instruments and other financial instruments for which the Company is a party and all relevant important documents.
o A list of all mortgages, mortgages, obligations, security interests, commissions, or other deficiencies and all relevant important documents that are covered by the company's property (reality or individual).
o All short-term and long-term debt schedules (including capitalized leases, guarantees and other contingent liabilities).
3. Financial Statements
o All audited and unaudited financial statements.
o A brief description of the contingent liabilities we are incorporating, including the pending litigation and the threat of litigation.
o The length of the relationship between the accountant's name and the accountant. Indicates whether the accountant holds any equity owned by the Company or its subsidiaries.
o Budget, business plan or forecast made for quarterly, annual or other standards over the past three years (for us and affiliates).
4. Contracts and Leases
o Real estate lease. Considering the lease period and the quality and location of the space, we decide whether the business needs are met.
o Equipment leasing.
o Purchase and distribution agreement for goods and services [uniforms; food suppliers]
5. Matters concerning taxation
o Is your tax payment repaid?
o Is there a pending tax lawsuit?
o Do local, state or federal tax authorities have mortgages on the real estate you are trying to acquire or the personal property of the business? Fines, interests, and attorneys' fees could significantly increase the cost of using tax credits.
6. Identity of all directors, officers and shareholders
We conducted a background check on each of these people and confirmed whether there was a pending disputed case.
7. Owned real estate
o A list of owned real estate that is useful for business evaluation and debt determination is required.
8. Insurance
o If you want to copy a copy of the insurance contract and the name and contact information of the insurance agency back to 4 years after the business purchase. As a new company, please check if the insurance policy covers you for the damage that you suspected to have occurred before you acquired the business.
Finally, many other factors related to finance and other matters must have been considered before the plunge occurred.
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