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Documents to be obtained from Target Company for Due Diligence

Written By Admin on Monday, 10 December 2012 | Monday, December 10, 2012



Due Diligence


I
Corporate Records
Checked by
Reviewed by
Observations
1.1
Certificate of Incorporation, Memorandum & Articles of Association, including any amendments.



1.2
Bye-Laws, operating agreements, partnership deed, including any amendments thereto



1.3
Minute Books, resolutions  for Shareholders, Members, Board of Directors and any committees of the above



1.4
Schedule of officers, directors and committees of the Board of Directors



1.5
Stock Book and Stock Ledgers



II
Shares and securities



2.1
Shareholder agreements, proxies, and similar agreements



2.2
Agreements to purchase or re-purchase any class of security



2.3
Agreements relating to  preemptive rights for any class of security



2.4
 As of the most current date, the following information:
(a) Number of, and record ownership of, outstanding shares (common and preferred);
(b) Number of shares held in treasury;
(c) Options, warrants and other rights outstanding, including detail of holders, exercises, unexercised, vesting schedules, and
(d) Ownership by officers, employees and directors.



2.5
Stock option plans and stock option, warrant and other similar stock purchase agreements



2.6
All applications for issuance/transfer of securities,



III
Location &property



3.1
List of jurisdictions (domestic and foreign) where the Company is (or should be qualified) to do business.



3.2
Schedule of locations (by address, city, state and country) at which the Company has offices, conducts business or stores inventory or equipment.



3.3
Schedule of leases and subleases for property and facilities, including location, area, rent and lease term and renewal options. 



3.4
Schedule of material suppliers and other third party service providers.



3.5
Schedule of property, key man, liability, and worker's comp insurance policies (including current and pending insurance carrier, policy limits, deductibles, and other special arrangements), and copies of all such insurance policies and contracts.



3.6
Schedule of owned property



IV
 Intellectual Property



4.1
Schedule of owned or proprietary technology (including software, databases and systems).



4.2
Schedule and copies (if applicable) of the following :
a) trade names, brand names, trademarks, logos and slogans;
(b) patents, patent rights, innovations and designs;
(d). copyrights;
(e) trade secrets and other industrial property rights, including all processes, know‑how, technical data; and
(f) Registrations, applications, additions, and other filings related to the foregoing items.



4.3
Schedule of all material ongoing or planned software, databases and/or network development projects.  



4.4
 Schedule of third party intellectual property sold, licensed or otherwise distributed by the Company.



4.5
 Product documentation and manuals for the Company’s software, databases and networks.



4.6
 Schedule of software authors and other creators of the Company's software products and other intellectual property.



4.7
 The name(s), address (es) and phone number(s) of person(s) responsible for application, maintenance and protection of trademarks, copyrights, patents and other intellectual property rights.



V
Contracts & Agreements



5.1
Agreements with customers and clients warranties and guaranties



5.2
Consulting, development and work-for-hire agreements with, or for and on behalf of, customers and clients



5.3
Marketing agreements ‑‑ distributorships, sales representatives, franchises and agreements.



5.4
Agreements with employees, independent contractors or other third parties



5.5
Leases with respect to tangible personal properties (including equipment).



5.6
Non‑competition, exclusivity and non‑solicitation agreements, in favor of the Company or by which the Company is bound, or by which the Company’s key employees or consultants may be bound to third parties



5.7
Confidentiality and non‑disclosure agreements, in favor of the Company or by which the Company is bound.



5.8
Employment (including incentive and severance) agreements, agency and independent contractor agreements.



5.9
Indemnification agreements for the benefit of officers, directors and employees.



5.10
Agreements or arrangements with management, employees, shareholders and other affiliates (including any loans or management fee arrangements), or with which any of them have a relationship



5.11
Outstanding agreements or commitments for capital expenditures



5.12
Agreements with investment bankers, brokers and similar advisors.



5.13
Inter company agreements



5.14
Leases and subleases



5.15
Contracts, or options to purchase, sell or lease real property.



5.16
Loan agreements, lines of credit,  other debt instruments, including notes payable and guarantees (by or in favor of the Company), and any other agreements collateralized or secured by the assets



5.17
Agreements relating to past, current or proposed mergers, acquisitions or dispositions, including transactions involving subsidiaries, divisions, product lines and other substantial assets.



5.18
Powers of Attorney



5.19
Other material agreements to which the Company is bound or which are necessary for the conduct of the Company’s business



VI
Personnel and Employee Benefits



6.1
Schedule of officers, directors, employees, independent contractors and consultants, and their respective titles, length of service, current compensation and benefits, and contractual severance obligations.



6.2
Schedule of employee benefit plans, including pension, bonus, commission, profit-sharing, stock option, deferred compensation, incentive, retirement,  medical, disability, salary continuation, executive benefit, fringe benefit, management perquisites or golden parachute



6.3
Policy and personnel manuals, including policies and procedures with respect to vacation and sick time, harassment and equal opportunity.



6.4
Management perquisites or arrangements, contracts or loans between the Company and any shareholder, officer, director, employee or consultant or any entities or persons with which such persons have a relationship



7
Regulatory Matters



7.1
Filings, registrations, reports and correspondence filed with local, state or central regulatory agencies  and any reports issued by such agencies



7.2
Governmental licenses, permits, approvals and authorizations necessary to conduct business



7.3
Expert compliance procedures or manuals



8
Litigation and Other Disputes



8.1           
Schedule and details of pending or threatened litigation, claims and other disputes.



8.2           
Schedule and details of government or  regulatory proceedings, inquiries or investigations



8.3           
Judgments,  injunctions or other orders



8.4           
Settlements



9
General Financial Information



9.1   
Previous (up to 3 years if available) annual audited / unaudited financial statements as well as interim period (monthly / quarterly) for current year



9.2   
.Current prospective financial data (i.e., budgets / forecasts) with detail of assumptions.



9.3   
External and internal auditors' reports (annual and quarterly), permanent files, management letters and regulatory examination reports received / issued in the last 3 years.



9.4   
Consolidating general ledger or trial balance for detailed accounts for the latest 2 fiscal years, current year quarters and current period. 



9.5   
Schedule of prepaid expenses and other assets



 

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