This is the process that the Buyer goes through to investigate and verify the information that he received from the Seller. It is done by the buyer with support from his lawyer and accountant, and other advisors he may need. The Seller provides access to the premises, to the equipment to the business records, directly and/or through the corporate accountant, bookkeeper, and lawyer. When the buyer signals that he is satisfied with the results, he informs his lawyer to proceed with a definitive agreement of purchase and sale. Timing involved could be a few weeks or a few months, depending on the size of the business, and issues that arise and need resolution.
Below is a list of the groups of matters typically looked into.
- General Corporate Matters of the Company
- Accounting and Taxes
- Financing of the company
- Litigation of the Company
- Legal Compliance
- Personnel, employees, contractors and others involved with the Company
- Company Property (Real Estate, equipment, leases, records of payment)
- Reports, Studies and Plans the Company engaged in
- Contracts the Company entered into
- Marketing and Publications
- Customers and Suppliers of the Company
- Recent events and occurrences over the past 3 years.
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