Pre-Sale Due Diligence

Almost anything you can imagine should be part of the pre-sale due diligence. If a selling company (seller) wants to receive the best terms and price, they must perform a certain amount of their own due diligence.

While not comprehensive, the following are the key aspects of what should be completed:

1. Designate a leader to coordinate all of the internal and external personnel involved.
2. Establish a meaningful timeline to complete each critical task.
3. Ensure that your tax advisers are in-place and very competent. These should include, at a minimum, your accountant, wealth manager and investment banker.
4. Complete and document the company's standards for at least financial controls; insurable risk (property, product, and employee practices); and, benefits plans.
5. Review legal and contractual agreements in-place. Determine ownership of assets, especially IP.
6. Understand work place flow, efficiency, and culture. Assess correcting actions required.