Due diligence for small business purchases
Find the problems before you own them, and fix them in the purchase agreement.
What I review
- Entity formation, ownership and good standing
- Material contracts: customers, suppliers, franchise and license agreements
- Commercial leases, assignment clauses and landlord consent
- Permits, licenses and regulatory requirements
- Employees, contractors and benefit obligations
- Litigation, judgments and tax liens
- UCC filings against the business's assets (UCC searches)
You receive a written findings memo that ranks issues and recommends how to handle each one: a price adjustment, a closing condition, an indemnity, or walking away.
Common questions
What does legal due diligence include?
Typically: the seller's entity records and ownership, material contracts and leases, permits and licenses, employment matters, litigation, liens and judgments, and intellectual property. The scope is set to fit the size and type of business.
How long does due diligence take?
For most small businesses, two to six weeks, depending on how organized the seller's records are and what the searches turn up.
Is due diligence the same as a financial audit?
No. Legal diligence focuses on legal risk. Your accountant reviews the financials; the two should be coordinated.
Talk through your deal
A short call is the fastest way to see what your purchase, sale or financing needs.
Schedule a consultation