Before taking part in any interaction with a business, for example buying, merging, or partnering in any other way, you want to make sure you really know what you’re getting yourself into.

Due diligence refers to reviewing all available information about the company—financial and legal—with a fine-tooth comb beforehand so that you’re not met with any unpleasant surprises down the road. Typically due diligence will involve the help of a business banker, an accountant, and an attorney.

A list of questions relating to all aspects of a business that you’ll want to have answered during your due diligence:


When investigating finances, you want to see the company’s audited financial statements. This includes balance sheets, income statements, cash flow statements, and business tax returns for the past 3-5 years. You’ll want to look out for accounts receivable being collected in a timely manner, bad debt, paying debt in a timely manner, profit margins, and outstanding liens.


Here you’ll want copies of consulting agreements, insurance policies, licenses and permits, IP documents, and documents related to lawsuits. You want to know if the agreements are enforceable, if the company has rights to its IP, if it’s adequately insured, if the permits and licenses are current, and any potential risks, costs, and damages involved with litigation.


Request organizational charts, employee handbooks, employee agreements, wage and salary information, benefits plans, non-compete agreements, and confidentiality agreements. Investigate whether employee policies put the company at risk, whether there are grievances with employees, and whether the employees are attempting to unionize or if a third party is trying to unionize them.

Business Structure

If the business is a corporation, ask for a copy of its corporate charter and bylaws. You’ll also want to look at meeting minutes for meetings held with the board of directors and any other shareholders. Check whether the business is in compliance, if it is structured properly for your needs, and whether you need to buy out shareholders, and if so, the cost of that.


Ask for a list of customers, suppliers, and vendors and an operations manual. See whether the business has adequate inventory, the supply chain and customer base are diversified, and the right infrastructure is in place for continued growth.

If you need assistance with due diligence, contact Forletta today. Our Pittsburgh- and Cleveland-based investigators have a wealth of experience and are experts in their field.


AllBusiness. How to Perform Due Diligence Before Buying a Business.