What are due diligence checks? What is a tax Diligence Checklist? An analysis of the company’s financials with an eye towards any entries that concern the asset(s) to be purchased will reveal many of the issues that could potentially arise during an asset sale. A review of the following financial statements is in order: 1. Cash Flows Statements 4. Shareholders’ Equity Statements It should be note particular attention should be paid to the balance sheet, including any entries that pertain directly to the asset(s) being purchased. See full list on dealroom.
Legal challenges to the owner’s title to the property being sold must be thoroughly investigated and analyzed. Even a single lawsuit (or pending action) can disrupt the sale of assets. With this in min the buyer should request from the owner: 1. A detailed list of any litigation the owner is currently involved in 2. A list of any litigation the owner reasonably foresees he or she will become involved in 3. The buyer should review: 1. The articles of incorporation of the owner of the assets 2. Any bylaws or resolutions 3. Any shareholder agreements, especially USAs (unanimous shareholder agreements) 4. Existing contractual obligations of the owner could create problems for the buyer if they are only discovered after the sale of an asset. (more…)