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Diligence document request list

The documents to ask for once terms are agreed in principle, grouped by area so the seller can fill a data room in order and you can see what is still missing.

Send this list soon after you agree terms in principle, and adjust it to the size and type of business. Ask for each document in the data room, and keep a note of anything the seller cannot provide.

Time needed
About 30 minutes
Last updated
Author
Loupe editorial
Reviewer
Not yet reviewed

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Financial

0 of 11

  • Ask for the signed or filed versions, with any accountant's review or audit report.

  • Compare them with the accounts. Any difference needs an explanation.

  • Use them to test reported revenue against cash received.

Tax

0 of 3

Customers and suppliers

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  • Look for change of control, termination, exclusivity and pricing terms.

People

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Legal and property

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Operations

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General information only, not legal, tax or financial advice. Adapt the checklist to the business in front of you and take professional advice where it matters.

Guides

  • Due diligence: what to check and in what order

    A sequence for due diligence that tests what could end the deal first, while it is still cheap to find out, and leaves the detailed and expensive work until the deal looks sound.

    10 minutes to read

  • Working capital, inventory and what the price includes

    Why the headline price is rarely the amount that changes hands, and how working capital pegs, inventory at cost and cash-free, debt-free terms decide what you actually pay for.

    10 minutes to read

  • Add-backs: which hold up and which do not

    Add-backs turn the profit in the accounts into the earnings on a listing, and each one is paid for several times over in the price. This guide shows how to test them and which usually survive.

    9 minutes to read

  • From first call to letter of intent

    The steps between spotting a listing and signing a letter of intent, what to learn at each one and what a sound letter of intent should cover.

    10 minutes to read

Red flags to look for

  • Tax returns that do not match the accounts

    When the profit in the tax returns cannot be reconciled to the profit in the accounts, you cannot tell which figures to trust, and there may be tax owed.

    Severity: deal breakerFinancials

  • Unpaid taxes a buyer could inherit

    Tax the business should have paid does not disappear when it changes hands. In a share sale it stays with the company you buy, and some unpaid taxes can follow even an asset purchase.

    Severity: price it inLegal and compliance

  • Pending or threatened litigation

    A live or threatened claim can cost a business far more than any damages, and some claims follow the business to a new owner. Find every dispute, understand who carries it after the sale and price or protect against it.

    Severity: price it inLegal and compliance

  • Licences or permits that do not transfer

    If the licence, permit or registration a business needs cannot pass to you, or cannot be obtained in time, you may be buying a business that is not allowed to trade. Confirm the route before you commit.

    Severity: deal breakerLegal and compliance

  • A lease ending soon or needing landlord consent

    For a business tied to its premises, a short lease or a landlord who must consent to the sale can put much of the value at risk. Read the lease early and make the landlord's agreement part of the deal.

    Severity: fixableLegal and compliance

  • Intellectual property held by the owner or freelancers

    The brand, code, content or designs a business depends on may legally belong to the owner or to whoever created them. Check ownership and get written assignments in place before completion.

    Severity: fixableLegal and compliance

  • Related-party transactions

    Deals between the business and its owner, their family or their other companies may not be at market rates, and many will not survive the sale.

    Severity: price it inFinancials

  • Reluctance to share records

    The seller delays, filters or refuses access to the financial and operating records you need to check the listing. Past a certain point, what you cannot see matters more than what you can.

    Severity: deal breakerSeller and process

Other checklists

  • Online business diligence for SaaS, ecommerce and content

    The checks that matter most when a business lives online: live account access, traffic, platforms, ownership of digital assets, code and the revenue behind the dashboards.

    About 120 minutes

  • Questions for the first seller call

    Questions to cover on a first call with a seller or their broker, grouped so the conversation stays natural and you still leave with the facts you need.

    About 45 minutes

  • Handover and the first 30 days

    What to settle before completion and what to do in the first month after you buy, so customers, staff and suppliers stay with the business while you learn how it runs.

    About 30 minutes