Conducting Legal and Financial Due Diligence

When ready to sell your business, the phase of legal and financial due diligence commences. This phase allows buyers to verify the business’s financial viability and legal standing. Detailed examination of financial statements, tax returns, legal documents, and compliance records typically takes place.

 

What to Expect During Due Diligence

Buyers meticulously scrutinize business operations during due diligence. Expect requests for several years’ worth of financial data, including balance sheets, income statements, cash flow statements, and tax returns. On the legal side, buyers examine contracts, leases, past litigation, and regulatory compliance records. This review identifies potential risks and liabilities that could impact the transaction’s value or feasibility.

 

Getting Your Legal and Financial Documentation in Order

Assume the successful sale of your business hinges on well-organized legal and financial documentation. We will gather, review, and update all critical documents before listing your business for sale. Ensuring accuracy and completeness of records such as articles of incorporation, customer and vendor contracts, intellectual property documentation, and employee agreements streamlines the due diligence process.

 

• • We have a team of financial advisors to help reconcile accounts and correct any discrepancies.

 

• • We engage legal counsel to resolve any outstanding litigation or compliance issues.

 

• • We ensure precise and up-to-date records reflecting the true value of your business.

Address these matters in advance to avoid complications that could derail potential deals. As buyers conduct their due diligence, their findings will shape their confidence in proceeding with the purchase and affect the negotiated terms of sale.