Due diligence checklist.

What is due diligence?

In an acquisition the buyer investigates the company before the deal goes ahead: legal, financial, tax, commercial and operational. The seller prepares the documents in a data room; the buyer asks questions and records findings.

A structure for your data room

Folder	Typical documents
1. Corporate	Articles, registry extracts, shareholder register, resolutions, organisation chart
2. Financial	Annual accounts, management reports, forecasts, financing, security
3. Tax	Returns, assessments, fiscal unities, open discussions
4. Contracts	Customer and supplier contracts, partnerships, change-of-control clauses
5. Employees	Terms of employment, key staff, pensions, collective agreements
6. Real estate and assets	Ownership, leases, key assets
7. IP and IT	Trademarks, software, licences, privacy and information security
8. Disputes and permits	Proceedings, claims, permits, supervision

How the process runs

• Preparation. Set up the index, often from a template or an Excel list, and fill the folders.
• Bidder groups. Give every interested party its own group with its own permissions.
• Q&A. Bidders ask questions per group; answers are approved before release.
• Findings. The buyer records findings for the report and the negotiation.
• Closing. Archive the data room with the documents as they were at signing.

With The Dutch Dataroom

Set up the index from a template, Excel or folder structure, work with separate bidder groups, Q&A per bidder, watermarks and a findings register. Bidders and advisers on the other side are free guests. See mergers and acquisitions.