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Due Diligence Checklist for IPO

IPO Due Diligence Template

When a company decides to go public with its shares by Initial Public Offering process, one of the most important things to do is conduct an IPO due diligence and the best advice is to do it before everything else.

When it comes to the IPO process, a firm has already decided to go public by selling a portion of its shares to investment banks as underwriters of the offering. This way a company could eventually come to enlargement of its business to the whole world of opportunities.

This may be a chance of business growth for the firm by going public, and for that same reason, it is crucial to conduct Due Diligence before the Public Offering starts.

Basic IPO Information to Know Before the Due Diligence

The Initial Public Offering creates an opportunity both for the company that is selling its shares, but for the potential investors as well.

This process is often referred to as the new star in the company’s public sector. It is usually realized through investment banks which also need to be overseeing the due diligence and its progress before the decision to purchase the firm’s shares.

By going public, a chance of winning big is also covered with a dose of precaution since this is the first time many companies will uncover confidential data and details for an overview.

Any type of operating faults or unknown business difficulties might result in aborting the entire Initial Public Offering process.

Others Involved in the IPO Process and Due Diligence

Besides bankers, there will be more people and service providers that will be included in the Due Diligence and IPO.

The legal advisor is also having an important role in this entire process and will be enrolled in the Due Diligence and the information in it.

Lawyers will make sure that the whole procedure is done accordingly to the law and will also with the company representatives to make a list of all needed regulatory requirements.

A financial printer will also be working with the IPO team and provide the needed prospects for the start of Due Diligence and IPO.

Documents and Information Needed for the IPO Due Diligence

Organizational Items

  • Request a copy of all the company’s Articles of Incorporation and business associates records
  • Request a copy of all the company’s resolutions of directors and leading governing board of the company for an overview
  • Ask for a list of firm’s shareholders  and committees 
  • Request an overview of numbers of shares owned by each of the company’s shareholders
  • Have the company supply you with the Certificate of good standing from the State Secretary
  • Have the company submit a report on how agreements and organizational decisions are made
  • Require the company’s annual business reports for the last 3 years minimum
  • Request a list of all the states that the company is permitted to do  business in
  • Request for an overview of a company's business plans and strategic plans for the previous 3 years
  • Require the graphic of the company's organizational structure including records of all the board members, directors, and employees

License and Tax Items

  • Request a copy of all the company’s operating and business licenses issued by the State Secretary of the countries that the company is doing business with
  • Require a report on all the company’s tax agreement data
  • Request a list of the company’s Local, State, Federal and Foreign taxing data for the last 3 years
  • Request for an overview of all the taxing data for the last 5 fiscal years
  • Ask for an overview of the governmental licenses and permits of the company
  • A copy of the income tax reports for the last 3 years 
  • An overview of employment tax filings for the last 3 years 

Company employees and board information

  • Require copies of employment lists of the company including all employees, managers, and board of directors
  • Require information regarding employee status in the firm, positions, and salary for each employee
  • Information regarding employee benefits and bonuses at the firm for each position 
  • Company’s personnel policies regarding employee problem resolving and sick leaves 
  • Employee health insurance and other insurances
  • Resumes of all the leading personnel of the firm
  • A copy of all the company’s employee audits for the last 3 years 

Financial Items

  • Copy of all previous broker or investment banking arrangements
  • Copy of the company’s financial records for the last 5 fiscal years
  • Request an overview of the company’s financial audits conducted for the last 3 years and its records
  • A list of all of the financial accounts for State and Foreign business of the firm
  • Copies of financial analysts reports for the last 3 years
  • A graphic of the company’s inventory and access approval 
  • A graphic of contingent liabilities and strategic plans of the firm
  • Information regarding accounting methods and amortization methods of the company for the last 3 years
  • Information regarding fixed and variable expenses for the last 5 fiscal years

Service and Customer items

  • Reports containing information of all the company's products, services, and complaints
  • Reports regarding legal approvals of the services or products that the company is offering
  • Information regarding the company’s best customers and their benefits for the last 3 years
  • Copy of the company’s trading policies
  • Overview of the firm’s marketing plans and materials and future marketing plans information
  • Copies of all of the  customer supply or service agreements for an overview

Property related Items

  • A list of all business locations of the firm
  • Copies of all the real estate agreements and franchise licenses 
  • An inventory list of all the company’s claimed property subjects
  • A graphic of the company’s official trademark and copyrights established
  • A list of all of the firm’s State and Government approved patents
  • History of the company's trademark complaints or issues if available
  • Copies of the official contracts for the firm’s real estate purchases

This checklist and Due Diligence information are crucial for the preparation of undergoing the IPO process. 

These items are obligational for understanding the organizational and operational factors of the company, as well as understanding potential risks and problems.

General information, reports, and documents included are meant for a better understanding of both the good and the bad sides of going public with the shares of your company.

Forming the right IPO team and finding the best attorney and financial printer will get you far in the Initial sales of your shares, and by finding the right people for conducting the best Due Diligence for IPO will do the big part of work for you.

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Due Diligence Checklist for IPO

IPO Due Diligence Template

When a company decides to go public with its shares by Initial Public Offering process, one of the most important things to do is conduct an IPO due diligence and the best advice is to do it before everything else.

When it comes to the IPO process, a firm has already decided to go public by selling a portion of its shares to investment banks as underwriters of the offering. This way a company could eventually come to enlargement of its business to the whole world of opportunities.

This may be a chance of business growth for the firm by going public, and for that same reason, it is crucial to conduct Due Diligence before the Public Offering starts.

Basic IPO Information to Know Before the Due Diligence

The Initial Public Offering creates an opportunity both for the company that is selling its shares, but for the potential investors as well.

This process is often referred to as the new star in the company’s public sector. It is usually realized through investment banks which also need to be overseeing the due diligence and its progress before the decision to purchase the firm’s shares.

By going public, a chance of winning big is also covered with a dose of precaution since this is the first time many companies will uncover confidential data and details for an overview.

Any type of operating faults or unknown business difficulties might result in aborting the entire Initial Public Offering process.

Others Involved in the IPO Process and Due Diligence

Besides bankers, there will be more people and service providers that will be included in the Due Diligence and IPO.

The legal advisor is also having an important role in this entire process and will be enrolled in the Due Diligence and the information in it.

Lawyers will make sure that the whole procedure is done accordingly to the law and will also with the company representatives to make a list of all needed regulatory requirements.

A financial printer will also be working with the IPO team and provide the needed prospects for the start of Due Diligence and IPO.

Documents and Information Needed for the IPO Due Diligence

Organizational Items

  • Request a copy of all the company’s Articles of Incorporation and business associates records
  • Request a copy of all the company’s resolutions of directors and leading governing board of the company for an overview
  • Ask for a list of firm’s shareholders  and committees 
  • Request an overview of numbers of shares owned by each of the company’s shareholders
  • Have the company supply you with the Certificate of good standing from the State Secretary
  • Have the company submit a report on how agreements and organizational decisions are made
  • Require the company’s annual business reports for the last 3 years minimum
  • Request a list of all the states that the company is permitted to do  business in
  • Request for an overview of a company's business plans and strategic plans for the previous 3 years
  • Require the graphic of the company's organizational structure including records of all the board members, directors, and employees

License and Tax Items

  • Request a copy of all the company’s operating and business licenses issued by the State Secretary of the countries that the company is doing business with
  • Require a report on all the company’s tax agreement data
  • Request a list of the company’s Local, State, Federal and Foreign taxing data for the last 3 years
  • Request for an overview of all the taxing data for the last 5 fiscal years
  • Ask for an overview of the governmental licenses and permits of the company
  • A copy of the income tax reports for the last 3 years 
  • An overview of employment tax filings for the last 3 years 

Company employees and board information

  • Require copies of employment lists of the company including all employees, managers, and board of directors
  • Require information regarding employee status in the firm, positions, and salary for each employee
  • Information regarding employee benefits and bonuses at the firm for each position 
  • Company’s personnel policies regarding employee problem resolving and sick leaves 
  • Employee health insurance and other insurances
  • Resumes of all the leading personnel of the firm
  • A copy of all the company’s employee audits for the last 3 years 

Financial Items

  • Copy of all previous broker or investment banking arrangements
  • Copy of the company’s financial records for the last 5 fiscal years
  • Request an overview of the company’s financial audits conducted for the last 3 years and its records
  • A list of all of the financial accounts for State and Foreign business of the firm
  • Copies of financial analysts reports for the last 3 years
  • A graphic of the company’s inventory and access approval 
  • A graphic of contingent liabilities and strategic plans of the firm
  • Information regarding accounting methods and amortization methods of the company for the last 3 years
  • Information regarding fixed and variable expenses for the last 5 fiscal years

Service and Customer items

  • Reports containing information of all the company's products, services, and complaints
  • Reports regarding legal approvals of the services or products that the company is offering
  • Information regarding the company’s best customers and their benefits for the last 3 years
  • Copy of the company’s trading policies
  • Overview of the firm’s marketing plans and materials and future marketing plans information
  • Copies of all of the  customer supply or service agreements for an overview

Property related Items

  • A list of all business locations of the firm
  • Copies of all the real estate agreements and franchise licenses 
  • An inventory list of all the company’s claimed property subjects
  • A graphic of the company’s official trademark and copyrights established
  • A list of all of the firm’s State and Government approved patents
  • History of the company's trademark complaints or issues if available
  • Copies of the official contracts for the firm’s real estate purchases

This checklist and Due Diligence information are crucial for the preparation of undergoing the IPO process. 

These items are obligational for understanding the organizational and operational factors of the company, as well as understanding potential risks and problems.

General information, reports, and documents included are meant for a better understanding of both the good and the bad sides of going public with the shares of your company.

Forming the right IPO team and finding the best attorney and financial printer will get you far in the Initial sales of your shares, and by finding the right people for conducting the best Due Diligence for IPO will do the big part of work for you.

FAQ

Can I change requests in this checklist or add new?

Every M&A and due diligence process is different. Downloaders are urged to make these checklists their own by changing the providing information to better fit their needs.

Does this questionnaire provide all the necessary due diligence information?

This IPO due diligence questionnaire was created by and for M&A professionals and includes a comprehensive starting point for any diligence process. Every deal is different however and may require additional requests or diligence areas.

Easily Collect Data Using this Template in DealRoom

This IPO due diligence template may be used as simply the downloadable Excel sheet. However, it operates most efficiently when utilized in conjunction with DealRoom’s dynamic due diligence tool. We offer a secure space to conveniently request, collect, and house data. Additionally, DealRoom offers numerous capabilities and security features to streamline the process.

How to use the template with DealRoom:
  • Download the due diligence template from DealRoom’s website
  • Open a room within DealRoom
  • Go to the Requests tab and select “import”
  • Import the downloaded template

The Requests tab is automatically populated with the requests from the due diligence template. Users can begin assigning, adding to, and completing due diligence requests.

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