{"id":5141,"date":"2016-04-04T10:47:57","date_gmt":"2016-04-04T15:47:57","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/buying-a-business-due-diligence-checklist.html"},"modified":"2026-04-28T12:41:00","modified_gmt":"2026-04-28T17:41:00","slug":"buying-a-business-due-diligence-checklist","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/buying-a-business-due-diligence-checklist.html","title":{"rendered":"Buying a Business: Due Diligence Checklist"},"content":{"rendered":"\n
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Buying a Business: Due Diligence Checklist<\/h1>\n\n
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\n By Amber Sheppard, Esq.<\/a> | Legally reviewed by Amber Sheppard, Esq.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

When buying a business you should conduct the following legal and financial review:<\/p>\n

Check Corporate Standing:<\/strong> Verify articles of incorporation or formation, bylaws, and status with the Secretary of State.<\/p>\n

Review Financial Health:<\/strong> Go over three years of audited financial statements, debts, and accounts receivables and payables.<\/p>\n

Confirm Assets:<\/strong> Verify ownership of physical property, real estate titles, and intellectual property such as patents and trademarks.<\/p>\n

Evaluate Liabilities:<\/strong> Review pending litigation, legal compliance, and employee benefit obligations.<\/p>\n

Operational Contracts:<\/strong> Evaluate all existing agreements, loans, and supplier agreements for transferability.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Fortune favors the bold, something true in the business world. Deciding\u00a0to\u00a0purchase an existing business<\/a>\u00a0is a big step, indeed.\u00a0Regardless of whether the deal is structured as an asset transaction, a stock transaction, or\u00a0a merger<\/a>, make sure you know what you are getting into. As a potential new business owner, you should understand that in order to fully understand the finances and legal issues, you need to do your\u00a0due diligence<\/a>.<\/p>\n

This article helps you understand the due diligence process by providing a due diligence checklist. This is a list of detailed information or documents you should review from the small business seller. From small business operations to finances, use this checklist to leave your risks at a minimum.<\/p>\n

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Organization and Good Standing<\/h2>\n

These documents should\u00a0give you an initial overview of the company:<\/p>\n