You’re probably always doing some form of due diligence on the job, whether it’s a thorough providing contracts to employees or consultants, reviewing the pros and cons of a new software solution or ramping up your marketing and operations. But when you’re considering a company to acquire, that process to vet the target and make the most informed decision for your business can get complicated. It’s the ultimate due diligence project. The often months-long task requires buyers of a business to dive deep into the selling company’s history, including financials, client lists, location, and carefully investigating all the important details in everything from a company’s intellectual property to its legal contracts and any ongoing litigation or tax matters. When done right and with the help of an expert legal team, there should be no surprises. The ideal situation is for you as a buyer of another business is to go into an acquisition knowing exactly what you’re buying to set up for success. This is where having experience legal counsel becomes important. In many small and even mid-size businesses, CFO’s, CEO and COOs try to do the Due Diligence largely by themselves without too much involvement from attorneys. But when done wrong an acquisition can be the beginning of major failures and financial losses as the buyer faces issues that they never knew existed. If you’re considering a company for acquisition, here are the seven questions you should ask during due diligence to ensure you’ve narrowed in on any risk and make the best decision for your own enterprise.

1. How are the company’s finances?

Does it owe more money than its officers initially disclosed? Are all the taxes paid? Are its books in order? How has the company grown financially? Buyers should look at a target’s past five years of financial information, including projections and forecasts, to determine how fiscally healthy the company really is.

2. How healthy is the company’s legal structure?

This includes a close look at all of an acquisition target’s corporate records, such as its incorporation documents, bylaws, all corporate minutes, shareholders agreements, employment and consulting agreements, master services agreements, any restructuring documents and all other paperwork related to the operation of the business. You’ll want to ensure that all of these complex legal documents are in order and the company is in good standing.

3. What legal and tax implications will you face if you become the owner?

This step during due diligence involves vetting the last three to five years of tax returns, along with pouring over any tax audits and communications with the Internal Revenue Service and other tax agencies. You’ll also want to make sure you understand any ongoing regulatory issues, legal disputes and lawsuits that might impact your decision to buy.

4. What does the company own and what contracts does it hold with other businesses?

Due diligence should involve an analysis of all material assets, which include not just real estate, but equipment and technology. Your examination also should include a close look at any contracts, leases and agreements with other companies, government agencies and individuals that it requires to get work done. It should also look at the lease of the seller’s space, if applicable and you plan to take it over.

5. What patents, trademarks and other intellectual property does the company own? Is it all up to date?

Copyrights, trademarks, patents, domain names and trade secrets all are critical parts of a company’s value. If a business doesn’t hold a patent, other companies could quickly capitalize on its success. Without a trademark, a company can’t protect its brand and may lose any opportunity to monetize it. Trade secrets are important as well, especially for tech companies, consulting firms,  and even a fitness boutique or cupcake shop. You want to safeguard how you do business from competitors, and ideally the business you are purchasing has been guarding their trade secrets as well. Due diligence must include a thorough vetting by your attorneys of these legal rights and agreements.

6. Who are the employees, how are they compensated, and will they be a good fit for your own company?

This will require a detailed inspection of all of the company’s employees – their positions, upcoming retirements, salaries, bonuses, benefits and contracts. You’ll also want to consider any ongoing complaints and labor disputes. And, before the deal is signed, you’ll want to determine how – and whether – the company’s employees will be integrated into your own ventures once the business is purchased.

7. Does it make sense for your business?

In other words, is the business a strategic fit for your own operations? Will the purchase allow you to expand your business or an aspect of it? Will it take a competitor out of the market? Are you buying a vendor, so that you can lower your own costs? Even when a target company otherwise checks out during due diligence, if the purchase doesn’t create value for your own business, an acquisition likely won’t make sense. A few aspects of due diligence, of course, might be easy enough for non-attorney business people to to handle, but most parts of the process require a deep understanding of the law and legal documents. Working with a due diligence lawyer ensures you’ve accounted for every risk associated with the acquisition and safeguards your business for success. Make sure your team focuses daily in due diligence in acquisitions and business sales so they can help you uncover any financial issues and deficiencies in contracts and corporate records, as well as protect you from bad deals and future lawsuits after the closing on the deal.

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