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Business Due Diligence

So you have decided to purchase an existing business. Whether the deal is structured as an asset transaction, a non-compete; financial; employment transaction or a merger, make sure you know what you are purchasing by obtaining detailed information from the seller regarding its business operations and finances.

Here are a just a few items you may want to review.

  • A list of employees including positions, current salaries and bonuses paid during last three years of service.
  • All employment, consulting, nondisclosure, nonsolicitation or noncompetition agreements between the Company and any of its employees.
  • Background Investigations on all current employees.
    • Active status reports in the state of incorporation for the last three years. A list of all states where the Company is authorized to do business and annual reports for the last three years.
    • Articles of Incorporation and all amendments.
    • Company's Bylaws, and all amendments.
    • A Certificate of Good Standing from the Secretary of State of the state where the Company is incorporated.
    • Schedule of fixed assets and the locations thereof.
    • U.C.C. filings.