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s business advisors, the JPAbusiness team provides financial and commercial due
diligence for clients considering business purchases and we often coordinate the
legal due diligence with our clients solicitors.
On the following pages you will find questions to consider when conducting your own
financial and commercial due diligence, or when discussing the process with your advisors.
Legal due diligence can be a very detailed undertaking, so for the sake of brevity we have
included a much-simplified legal due diligence checklist on the final page. This checklist
contains some of the basic information to seek from vendors when conducting legal due
diligence. This information has been kindly supplied by specialist commercial lawyers
Watson Mangioni who conduct detailed legal due diligence for a wide range of clients.
Info
received
What was the $/% margin earned on each main product and
service over the past two years?
Where does the business receive sales inquiries from and how
does it market its propositions?
Notes
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Info received
Notes
What are the specific payment and supply terms (by written agreement
or verbal) for each main supplier to the business?
What do the business' key suppliers think about the business and its
stocktake at completion?
Are there any risks and issues with the transfer of employees,
including entitlements, claims and other liabilities?
What are the key processes and procedures that drive business
performance (e.g. the job/project management process (from order
through to deliver and billing) and do you understand each step
(system, manual, other)?
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International
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Info received
Notes
Have you confirmed the legal and practical status of business name and
any trademarks, logos, and other valuable information such as IP,
designs, drawings, logins, subscriptions, prepaid advertising etc?
Have you identified any material variances in the financial performance over the
past 2-3 years, why these occurred and the implications?
What are the risks associated with the business' current debtor and
creditor profile (e.g. arrears and poor payment, working capital
impacts, etc)?
Have you reviewed and assessed the monthly cash flow profile of
the business to identify tight periods that impact working capital
and why?
Have you conducted a tax and BAS/GST liability reconciliation to
confirm status and any variances of a material nature?
This
work
is
licensed
under
the
Creative
Commons
Attribution
4.0
International
License.
To
view
a
copy
of
this
licence,
visit
http://creativecommons.org/licenses/by/4.0/.
Received
Notes
their business.
For each group entity, full details of:
This
work
is
licensed
under
the
Creative
Commons
Attribution
4.0
International
License.
To
view
a
copy
of
this
licence,
visit
http://creativecommons.org/licenses/by/4.0/.
If you would like to learn more about the business advisory and broking services offered by
JPAbusiness, please contact the team by visiting www.jpabusiness.com.au/contact-jpabusiness
For information about the wide range of commercial law services provided by
Watson Mangioni Lawyers, go to http://www.wmlaw.com.au
Please feel free to post this template on your blog, or email, tweet and share it with your network.
This
work
is
licensed
under
the
Creative
Commons
Attribution
4.0
International
License.
To
view
a
copy
of
this
licence,
visit
http://creativecommons.org/licenses/by/4.0/.