Legal Due Diligence Checklist

Our Legal Due Diligence checklist includes all the general documents and information you need. Downloaders are urged to customize their checklist by changing the provided information to fit their unique needs.

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Legal Due Diligence Checklist

Our Legal Due Diligence checklist includes all the general documents and information you need. Downloaders are urged to customize their checklist by changing the provided information to fit their unique needs.

Download Template
Start Due Diligence With DealRoom
Start Integration With DealRoom

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What Tasks does the 

Legal Due Diligence Checklist

 Include

General

ITEMS IN GENERAL LEGAL DUE DILIGENCE INCLUDE:

  • Copies of agreements or instruments that place restrictions or encumbrances on assets.
  • Contracts that restrict the target's right to conduct its business.
  • Contracts with obligations such as covenants and indemnification.
  • Summary of the target's compliance program and copies of all policies, procedures and other related documentation.
  • Confirm that the firm is not restricted from doing business under OFAC regulations or similar.
  • Confirm whether the target has any direct or indirect presence and/or other engagements.
  • Summary of regulations applicable and/or its business, and anticipated changes
  • Copies of any letters with any regulatory agencies or authorities.
  • List of states and countries in which the target has operations.
  • Good-standing certificates or qualification to do business from state of incorporation and states where qualified.
  • Schedule of any significant U.S. import or export restrictions that relate to the target's operations.

Organization/Ownership

ITEMS IN ORGANIZATION/OWNERSHIP DUE DILIGENCE INCLUDE:

  • List of current shareholders detailing the amount of shares each owns.
  • List of stock transfer records.
  • List of stock broker contracts and agreements.
  • Evidence that outstanding stock is paid in full.
  • Identify issues associated with transfering equity.

Litigation

ITEMS IN LITIGATION DUE DILIGENCE INCLUDE:

  • List of all threatened, pending, current, and closed litigations from the past five years.
  • List of arbitrational procedings from the past five years.
  • Summaries of current and closed governmental investigations and proceedings on the target, directors, and executives from the past five years.
  • Responses from the company regarding audit inquires.
  • List of all statutory orders, decrees, and rulings to which the company be subject.

Product/Service

ITEMS IN PRODUCT/SERVICE DUE DILIGENCE INCLUDE:

  • Detailed list of all products and services.
  • Verify compliance with FDA, CPSC, OSHA, and FLSA regulations for products, services, and operations.
  • Copies of all product warranties.
  • Summary of all material warranty claims brought.
  • Summary of all product recalls.
  • Identify potential liabilities associated with products/services.

Contacts/Obligations

ITEMS IN CONTACTS/OBLIGATIONS DUE DILIGENCE INCLUDE:

  • Copies of service contracts.
  • Copies of vendor contacts.
  • Copies of customer contracts and obligations.
  • Copies of outstanding contracts to purchase machinery or real estate.
  • Copies of contracts for construction, architectural or engineering services for any buildings or improvements.
  • Copies of operating contracts.
  • Copies of employee contracts and retirement agreements.
  • Change of control regulations.
  • Copies of material contracts that are terminable upon a change of control or other corporate transaction.
  • Copies of all joint venture, partnership, and franchise agreements.
  • Identify any contracts or provisions that may be out of the ordinary course of business.

Permits/Licenses

ITEMS IN PERMITS/LICENSES DUE DILIGENCE INCLUDE:

  • Summary of permits, licenses, and other authorizations including any required export control and pertinent governmental licenses.
  • Summary of icense, sublicense, royalty and franchise agreements.
  • Schedule of permit and license renewals and associated fees.
  • Copies of automobile registrations.

Intellectual Property

ITEMS IN INTELLECTUAL PROPERTY DUE DILIGENCE INCLUDE:

  • List of all patents, trademarks, trade-names, service marks and copyrights held or applied for.
  • List of the creator(s) for each IP component.
  • List of all patents, trademarks, and copyrights held by an employee, shareholder, director or any other affliated that are used by the target.
  • Summary of material trade secrets.

HR/Operations

ITEMS IN HR/OPERATIONS DUE DILIGENCE INCLUDE:

  • List of all employees including those covered by any disability legislature in the company.
  • List of OSHA citations, employee health issues related to the target, and any other adverse environmental or occupational safety or health condition or concerns.
  • History of all sexual harassments accusations, charges, and convictions from the past five years.
  • Copies of all current employment applications, interview guides, and hiring procedures.
  • Verify compliance with equal employment opportunity and anti-discrimination legislature.
  • Summaries of disciplinary and termination procedures and all involuntary employee terminations from the past five years.
  • History of Unemployment and Worker’s Compensation claims.
  • Verify compliance with Fair Labor Standards Act, i.e. minimum wage, child labor, etc. (if U.S. based).
  • Ensure employee personnel files and Form I-9s (if it is United States-based company) are in compliance with legal standards.
  • Copies of all SBCs for current benefit plans.
  • Copies of all union and labor contracts.
  • History of labor-related disputes, grievance procedings, and arbitrations.

Environmental

ITEMS IN ENVIRONMENTAL DUE DILIGENCE INCLUDE:

  • Environmental inspection or review of all facilities.
  • Copies of all regulatory notices, complaints, and correspondence.
  • Past or current litgations and procedings regarding environmental concerns.
  • Survey condition of neighboring areas to the target's facilities.
  • Describe waste disposal processes.
  • Describe the existence, condition, and handling of controlled or hazardous substances such as asbestos, radioactive materials, and pesticies.
  • Verify compliance with governmental regulations.

FAQ

What Is Due Diligence?

Due diligence is a critical aspect of any deal that begins very early in the process and can continue right up until closing. During due diligence, the potential buyer asks questions and requests documentation from the seller that helps the buyer understand the target company and its business. These requests are usually general to start and become more specific as the buyer develops a greater understanding of the target. Buyers use the information provided by the seller to evaluate the opportunities and risks associated with the potential transaction. It is important for sellers to stay organized throughout the process. Buyers often submit thorough, detailed request lists that require input from numerous members of the seller’s deal team.

What is a due diligence checklist?

As the name implies, a due diligence request list is a list of questions and requests for information and documentation that a buyer submits to a seller in order to learn about the target company, its business and its operations. The initial diligence request list tends to be broad and typically includes an extensive list of questions covering a wide range of subjects. This allows the buyer to gain a broad understanding of the target company and identify key issues that can be investigated and considered more closely. Because every deal is different, due diligence request lists have to be tailored to meet the needs of the buyer and address the unique circumstances of your transaction.
However, there is a variety of fundamental requests that are relevant in most deals. These are the types of requests that our templates are designed to address.

What Questions Does the Master Due Diligence Questionnaire Include?

As the name implies, a due diligence request list is a list of questions and requests for information and documentation that a buyer submits to a seller in order to learn about the target company, its business and its operations. The initial diligence request list tends to be broad and typically includes an extensive list of questions covering a wide range of subjects. This allows the buyer to gain a broad understanding of the target company and identify key issues that can be investigated and considered more closely. Because every deal is different, due diligence request lists have to be tailored to meet the needs of the buyer and address the unique circumstances of your transaction.
However, there is a variety of fundamental requests that are relevant in most deals. These are the types of requests that our templates are designed to address.

Key considerations when using our m&a due diligence template

Our templates are drafted to provide an inclusive and wide-ranging list of initial due diligence requests. However, the templates, as well as the information contained therein, are not legal advice. They are not complete, and they are not specific to your transaction. The templates are designed to elicit general information from the seller that will provide the buyer with a broad overview of the target and it’s business and operations. You should review any template before using it, and it may need to be modified to ensure that it is suitable and relevant to your circumstances. Information provided by the seller will likely trigger additional questions that focus on specific aspects of the target’s business and issues identified during the due diligence process.

Are the requests in the template comprehensive?

No. Our Due Diligence Checklist is drafted to include typical requests that are relevant in most transactions. However, every deal and every target company is unique. Before utilizing any template, it is important that you review it with the help of your legal and other professional advisors to ensure that the requests are complete and tailored to the specific circumstances of your deal.

How to use the template with Dealroom

  • Start 14-day Free Trial of DealRoom and sign-up
  • Select a Master Due Diligence Template while creating a new room
  • Start assigning, adding to, and completing due diligence requests with needed documents by uploading them into the built-in virtual data room. The Requests tab is automatically populated with the requests from the due diligence template.

Can I change requests in this checklist or add new?

Every M&A 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 integration information?

This checklist was created by and for M&A professionals. It includes a comprehensive starting point for the integration process. However, every deal is different and may require additional requirements and tasks.

How to use this template with DealRoom?

  • Start 14-day Free Trial of DealRoom and sign-up
  • Select an Integration Template while creating a new workspace
  • Start planning, assigning, adding to, and completing integration tasks. The Requests tab is automatically populated with the tasks from the integration template.

Key considerations when using our m&a due diligence template

Our templates are drafted to provide an inclusive and wide-ranging list of initial due diligence requests. However, the templates, as well as the information contained therein, are not legal advice. They are not complete, and they are not specific to your transaction. The templates are designed to elicit general information from the seller that will provide the buyer with a broad overview of the target and it’s business and operations. You should review any template before using it, and it may need to be modified to ensure that it is suitable and relevant to your circumstances. Information provided by the seller will likely trigger additional questions that focus on specific aspects of the target’s business and issues identified during the due diligence process.

Are the requests in the template comprehensive?

No. Our Due Diligence Checklist is drafted to include typical requests that are relevant in most transactions. However, every deal and every target company is unique. Before utilizing any template, it is important that you review it with the help of your legal and other professional advisors to ensure that the requests are complete and tailored to the specific circumstances of your deal.

How to use the template with Dealroom

  • Start 14-day Free Trial of DealRoom and sign-up
  • Select a Master Due Diligence Template while creating a new room
  • Start assigning, adding to, and completing due diligence requests with needed documents by uploading them into the built-in virtual data room. The Requests tab is automatically populated with the requests from the due diligence template.

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