An offer to purchase a business will almost always be conditioned on the satisfactory results of a due diligence investigation. The scope of the due diligence investigation will be impacted by the structure of the transaction and the sophistication of the buyer. An example of why the scope of due diligence will vary is if a buyer will not be occupying the physical facilities of the seller or taking on the seller’s employees, the buyer’s due diligence in these areas MAY be more limited.

The buyer will usually provide a checklist of documents that he or she will expect to review when conducting the due diligence investigation.  If you do not understand the requests on the list, contact the buyer or his representative before they arrive for due diligence so that they can clarify their request or you as the seller can explain what information is available that may be responsive to the request.  Consult with your advisors – your business broker, your attorney or your accountant with questions about how to respond to due diligence requests.

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