Due Diligence Checklist Generator
Create comprehensive due diligence checklists for M&A transactions, investments, and business reviews
Transaction Information
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Financial Due Diligence
▼Audited Financial Statements
Review 3-5 years of audited financial statements including income statement, balance sheet, and cash flow statement
Priority: High
Reviewer: CFO Team
Timeline: Week 1
Notes: Focus on revenue recognition policies
Management Financial Reports
Monthly and quarterly management reports, budget vs. actual analysis, and financial forecasts
Priority: High
Reviewer: Finance Team
Timeline: Week 1
Notes: Recent 24 months required
Revenue Analysis
Customer concentration, revenue by product/service, geographic breakdown, and recurring vs. one-time revenue
Priority: High
Reviewer: Revenue Team
Timeline: Week 2
Notes: Focus on sustainability and growth trends
Working Capital Analysis
Accounts receivable aging, inventory turnover, accounts payable, and cash conversion cycle
Priority: Medium
Reviewer: Finance Team
Timeline: Week 2
Notes: Assess quality of working capital
Debt and Credit Facilities
All debt agreements, credit facilities, guarantees, and covenant compliance
Priority: High
Reviewer: Legal/Finance
Timeline: Week 1
Notes: Check for change of control provisions
Tax Returns and Compliance
Corporate tax returns, tax provisions, audits, and disputes for past 5 years
Priority: Medium
Reviewer: Tax Advisor
Timeline: Week 3
Notes: Identify potential tax liabilities
Legal Due Diligence
▼Corporate Documents
Articles of incorporation, bylaws, board resolutions, shareholder agreements, and corporate minutes
Priority: High
Reviewer: Legal Counsel
Timeline: Week 1
Notes: Verify good standing and authority
Material Contracts
Customer agreements, supplier contracts, distribution agreements, and partnership agreements
Priority: High
Reviewer: Legal Team
Timeline: Week 2
Notes: Focus on change of control provisions
Intellectual Property
Patents, trademarks, copyrights, trade secrets, and IP licensing agreements
Priority: High
Reviewer: IP Counsel
Timeline: Week 2
Notes: Verify ownership and freedom to operate
Litigation and Disputes
Pending litigation, threatened claims, regulatory investigations, and settlement agreements
Priority: High
Reviewer: Litigation Counsel
Timeline: Week 1
Notes: Assess potential exposure and impact
Real Estate and Facilities
Property deeds, leases, environmental assessments, and zoning compliance
Priority: Medium
Reviewer: Real Estate Team
Timeline: Week 3
Notes: Check for assignability of leases
Regulatory Compliance
Licenses, permits, regulatory filings, and compliance with industry regulations
Priority: High
Reviewer: Regulatory Team
Timeline: Week 2
Notes: Verify all required licenses are current
Operational Due Diligence
▼Management Team Assessment
Executive team experience, organizational structure, retention plans, and succession planning
Priority: High
Reviewer: HR/Management
Timeline: Week 1
Notes: Focus on key person risk
Business Model and Strategy
Value proposition, competitive positioning, market strategy, and growth plans
Priority: High
Reviewer: Strategy Team
Timeline: Week 1
Notes: Validate strategic assumptions
Customer Analysis
Customer base composition, retention rates, satisfaction scores, and concentration risk
Priority: High
Reviewer: Commercial Team
Timeline: Week 2
Notes: Conduct customer reference calls
Operations and Processes
Production processes, quality control, supply chain, and operational efficiency metrics
Priority: Medium
Reviewer: Operations Team
Timeline: Week 3
Notes: Identify improvement opportunities
Vendor and Supplier Relationships
Key supplier agreements, dependency analysis, and backup supplier options
Priority: Medium
Reviewer: Procurement Team
Timeline: Week 3
Notes: Assess supplier concentration risk
Information Systems and Technology
IT infrastructure, software systems, cybersecurity, and technology roadmap
Priority: Medium
Reviewer: IT Team
Timeline: Week 4
Notes: Assess integration complexity
Human Resources Due Diligence
▼Employee Census and Structure
Headcount by department, employment status, turnover rates, and organizational chart
Priority: Medium
Reviewer: HR Team
Timeline: Week 2
Notes: Identify integration challenges
Compensation and Benefits
Salary structures, bonus plans, equity compensation, and benefit programs
Priority: Medium
Reviewer: Compensation Team
Timeline: Week 3
Notes: Compare to market benchmarks
Employment Agreements
Executive contracts, employment agreements, non-compete clauses, and severance arrangements
Priority: High
Reviewer: Legal/HR
Timeline: Week 2
Notes: Check change of control provisions
Labor Relations
Union agreements, collective bargaining agreements, and labor disputes
Priority: Medium
Reviewer: Labor Relations
Timeline: Week 3
Notes: If applicable to company
Employee Benefit Plans
Pension plans, 401(k), health insurance, and other employee benefit programs
Priority: Medium
Reviewer: Benefits Team
Timeline: Week 3
Notes: Assess ERISA compliance
Compliance and Policies
HR policies, compliance training, safety records, and EEO compliance
Priority: Medium
Reviewer: HR Compliance
Timeline: Week 4
Notes: Review any violations or claims
Commercial Due Diligence
▼Market Analysis
Market size, growth trends, competitive landscape, and market positioning
Priority: High
Reviewer: Market Research
Timeline: Week 2
Notes: Use third-party market data
Competitive Analysis
Key competitors, competitive advantages, market share, and differentiation factors
Priority: High
Reviewer: Strategy Team
Timeline: Week 2
Notes: Include emerging competitors
Sales and Marketing
Sales process, marketing strategy, brand strength, and customer acquisition costs
Priority: Medium
Reviewer: Sales/Marketing
Timeline: Week 3
Notes: Validate sales pipeline
Product Portfolio
Product offerings, development pipeline, product lifecycle, and innovation capabilities
Priority: Medium
Reviewer: Product Team
Timeline: Week 3
Notes: Assess future growth potential
Distribution Channels
Sales channels, distribution partnerships, channel conflicts, and market coverage
Priority: Medium
Reviewer: Channel Team
Timeline: Week 4
Notes: Evaluate channel effectiveness
Pricing Strategy
Pricing models, price sensitivity, discount policies, and pricing power
Priority: Medium
Reviewer: Pricing Team
Timeline: Week 4
Notes: Compare to competitor pricing
Technical Due Diligence
▼Technology Architecture
System architecture, technology stack, scalability, and technical debt assessment
Priority: High
Reviewer: CTO/Tech Team
Timeline: Week 2
Notes: Focus on scalability and maintainability
Software Development
Development processes, code quality, testing practices, and deployment procedures
Priority: Medium
Reviewer: Engineering
Timeline: Week 3
Notes: Review code repositories and documentation
Data Management
Data architecture, data quality, backup procedures, and data governance
Priority: Medium
Reviewer: Data Team
Timeline: Week 3
Notes: Assess data privacy compliance
Cybersecurity
Security policies, vulnerability assessments, incident response, and compliance certifications
Priority: High
Reviewer: Security Team
Timeline: Week 2
Notes: Include penetration testing results
Infrastructure and Cloud
Infrastructure setup, cloud services, vendor dependencies, and disaster recovery
Priority: Medium
Reviewer: Infrastructure Team
Timeline: Week 4
Notes: Evaluate cloud migration readiness
Technology Roadmap
Future technology plans, upgrade requirements, and innovation pipeline
Priority: Low
Reviewer: Strategy/Tech
Timeline: Week 4
Notes: Align with business strategy
Environmental Due Diligence
▼Environmental Compliance
Environmental permits, compliance history, violations, and regulatory filings
Priority: Medium
Reviewer: Environmental
Timeline: Week 3
Notes: Industry-dependent priority
Environmental Assessments
Phase I and II environmental site assessments, contamination reports, and remediation plans
Priority: Medium
Reviewer: Environmental
Timeline: Week 4
Notes: Required for manufacturing/industrial
Waste Management
Waste disposal practices, hazardous materials handling, and waste management contracts
Priority: Low
Reviewer: Environmental
Timeline: Week 4
Notes: If applicable to operations
Climate and Sustainability
ESG reporting, carbon footprint, sustainability initiatives, and climate risk assessment
Priority: Low
Reviewer: Sustainability
Timeline: Week 4
Notes: Increasingly important for investors
Insurance and Risk Due Diligence
▼Insurance Coverage
General liability, property, D&O, E&O, cyber liability, and other insurance policies
Priority: Medium
Reviewer: Risk Management
Timeline: Week 3
Notes: Verify adequate coverage levels
Claims History
Insurance claims history, loss runs, and outstanding claims
Priority: Medium
Reviewer: Risk Management
Timeline: Week 3
Notes: Assess claims trends and patterns
Risk Management
Risk assessment processes, risk register, business continuity plans, and crisis management
Priority: Medium
Reviewer: Risk Management
Timeline: Week 4
Notes: Evaluate risk mitigation strategies
Product Liability
Product liability exposure, recalls, warranty claims, and quality control procedures
Priority: Medium
Reviewer: Legal/Quality
Timeline: Week 3
Notes: If applicable to product companies
Tax Due Diligence
▼Federal Tax Returns
Corporate income tax returns, extensions, and amended returns for past 5 years
Priority: High
Reviewer: Tax Advisor
Timeline: Week 2
Notes: Include all entities and subsidiaries
State and Local Taxes
State income tax, sales tax, property tax, and local tax compliance
Priority: Medium
Reviewer: Tax Advisor
Timeline: Week 3
Notes: Multi-state operations complexity
Tax Audits and Disputes
IRS audits, state audits, tax disputes, and settlement agreements
Priority: High
Reviewer: Tax Advisor
Timeline: Week 2
Notes: Assess potential liabilities
International Tax
Transfer pricing, foreign operations, tax treaties, and international compliance
Priority: Medium
Reviewer: International Tax
Timeline: Week 4
Notes: If applicable to international operations
Tax Attributes
NOLs, credits, depreciation schedules, and tax attribute preservation
Priority: Medium
Reviewer: Tax Advisor
Timeline: Week 3
Notes: Impact on transaction structure