Checklists for due diligence

With these tried and tested checklists, you can thoroughly examine target companies as a prospective buyer, but also prepare well for due diligence as a seller.

Contents

In the context of corporate transactions, target companies are systematically assessed. The instrument of due diligence is used for this purpose.

Here you will find seven structured due diligence checklists for the systematic assessment of companies. The following topics are covered by these checklists:

• Financial Due Diligence
• Tax Due Diligence
• Commercial Due Diligence
• Legal Due Diligence
• Personnel Due Diligence
• Technical Due Diligence
• Site Due Diligence

These checklists have been developed in practice and have proven their worth. They are designed in such a way that you, as a prospective buyer, can write your findings behind each item, use relevant sources of information, refer to attachments, name supporting documents and write your comments. This creates a record of your due diligence while it is being carried out. If, following your due diligence, you have the seller sign for his acknowledgement on each page, you will have a valuable basis for the guarantees to be defined in the purchase contract.

These checklists are also valuable for sellers to carefully prepare for due diligence. Go through the items on this checklist carefully and consider how you can find answers to them or what you should still grind in your company before the sale.

These checklists are available in German, English and Spanish so that company transactions can be supported across national borders.

Benefits

• With these comprehensive checklists, you will be made aware of the essential relevant check areas.
• You will receive practice-oriented checklists for due diligence, which have an appropriate depth.
• You can note answers and archiving locations for requested documents behind each item in the checklists. In this way you can use these checklists directly as applicable documents for the guarantees to be defined in the transaction contract.
• All checklists are in three languages (German, English and Spanish). Thus, these checklists also facilitate cross-border transaction processes.
• For prospective buyers, the use of these checklists during due diligence creates a solid basis for the seller’s guarantees to be defined in the purchase agreement.
• For sellers, these checklists give concrete indications of possible questions that prospective buyers will ask. The checklists support good preparation for the sales process and the associated due diligence.

What is a due diligence?

A due diligence is a systematic recording of all relevant possibilities and limitations that characterize a company or part of a company. Due diligence checks are used in the course of corporate transactions. They are intended to give the buyer security about the transaction object.
During a due diligence, all relevant aspects are checked and recorded.
When recording these characteristics, the sources of information are indicated. It is usual for the prospective seller to sign the resulting due diligence protocols and thereby formally confirm their documented statements. For example, due diligence logs can be used as a basis for seller guarantees that are formulated in the transaction contract.

Procedure of a due diligence review

A due diligence begins with recording all the opportunities, limitations and burdens that a company or part of a company has. Care must be taken to ensure that the information is complete. Concrete formulations such as: “The list in Appendix x includes all existing ongoing obligations. There are no other ongoing obligations.” In addition, attention must be paid to precision. A formulation such as “The planned corporate transaction does not create any obligation to repay funds from the public funding granted, with the exception of …”

A checklist will help you with due diligence

In order not to forget any important aspect during the comprehensive due diligence, the use of a suitable checklist is recommended. Good checklists are pre-structured and contain the essential aspects that should be included in a due diligence.
In any case, you do not carry out the due diligence with a field-tested checklist arbitrarily, but ensure a systematic approach. Instead of having to do fundamental considerations, you can concentrate on checking the content.