Business purchase due diligence

When buying a business, a systematic approach in relation to due diligence is recommended, which is likely to include (but is not limited to) an analysis of the following matters:

Legal

  1. Corporate structure/shareholdings
  2. Corporate compliance/internal administration
  3. Capital Structure
  4. Related party transactions and indemnities
  5. Statutory and regulatory requirements
  6. Material contracts
  7. Warranties/service agreements
  8. Intellectual property/computer systems/control systems
  9. Other Assets
  10. Loans and borrowings
  11. Litigation and claims
  12. Personnel and industrial relations
  13. Superannuation
  14. Insurance
  15. Environmental compliance
  16. Stamp duty
  17. Trade Practices Act

Financial & accounting

  1. Key business issues
  2. Background information
  3. Industry, competitors and business planning
  4. Historical financial performance
  5. Financial position
  6. Financial prospect
  7. Taxation
  8. Other considerations

Commercial

  1. Background information on the Company
  2. Industry, competitors and government policy
  3. Business strategy
  4. Regulatory matters
  5. Financial history
  6. Financial projections
  7. Facilities/loans/liabilities
  8. Sales and distribution
  9. Directors, management and control
  10. Management and employees
  11. Superannuation
  12. Computer systems and technology
  13. Environment, health and safety
  14. Insurance

Risk management

Develop and implement a risk management program in accordnace with Australian/ New Zealand Standard AS/NZS ISO 31000:2009 Risk management – Principles and guidelines

Project management

Manage the project to acquire the business using a structured project management methodology like PRINCE2 (an acronym for PRojects IN Controlled Environments, version 2)

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