An organized due diligence inventory for buyers evaluating a Florida business acquisition.
How to use this checklist
This checklist organizes the categories of information a buyer typically requests and reviews before closing an acquisition. The depth of review scales with deal size and industry; a smaller asset purchase warrants a lighter version of the same categories, while a larger stock purchase typically warrants deeper review of each one.
Asset purchase versus stock purchase changes what matters
In an asset purchase, buyers can generally select which liabilities to assume, which narrows some diligence categories but still requires care around successor liability and assigned contracts. In a stock purchase, the buyer inherits the entity as a whole, including its history, making corporate records, litigation history and undisclosed liabilities more consequential.
Sequencing diligence against the letter of intent
Diligence typically follows a signed letter of intent that sets exclusivity and a general timeline. Structuring diligence in phases (financial and legal review first, operational and site visits second) helps buyers avoid spending on deep review before more fundamental deal-breakers are ruled out.
Where deals commonly stall or unravel
- Financial statements that were not prepared consistently across the years reviewed.
- Key contracts that require third-party consent to assign, discovered late in the process.
- Undisclosed litigation, liens, or regulatory issues surfacing during a title or lien search.
- Employee classification issues that create liability exposure for a buyer stepping into the workforce.
Closing the loop before signing
Diligence findings should feed directly into the purchase agreement (through price adjustments, indemnification provisions, escrow holdbacks, or closing conditions) rather than being treated as a separate exercise from the deal document itself.
Working checklist
What to prepare
Corporate and organizational records
- Articles of organization or incorporation and all amendments
- Operating agreement, bylaws and shareholder or member agreements
- Cap table or ownership ledger and any options or convertible securities
- Minutes of key organizational and board or member decisions
- Good standing certificate from the Florida Division of Corporations
- List of any subsidiaries or affiliated entities
Financial records
- Financial statements for the past three to five years
- Federal and state tax returns for the same period
- Accounts receivable and accounts payable aging reports
- Debt schedule showing all outstanding loans, liens and personal guarantees
- Bank statements and reconciliations
- Revenue concentration analysis by customer
Contracts and commercial relationships
- Material customer and supplier contracts
- Lease agreements and any assignment or consent requirements
- Loan agreements and security agreements
- Franchise agreements, if applicable
- Non-compete, non-solicitation and confidentiality agreements affecting the business
- Any contracts requiring third-party consent upon a change of ownership
Employment and labor
- List of employees with title, compensation and classification (employee versus contractor)
- Employment agreements and offer letters for key personnel
- Employee handbook and benefit plan documents
- Records of any pending or past employment disputes
- Payroll tax compliance history
Real estate and assets
- Property deeds, leases, or licenses for all business locations
- Equipment and fixed asset list with condition and ownership status
- UCC lien search results on business assets
- Title search where real property is included in the transaction
- Environmental or zoning compliance review where relevant
Legal, litigation and regulatory
- Pending, threatened, or historical litigation involving the business
- Regulatory licenses and permits required for the industry
- Insurance policies and claims history
- Intellectual property registrations and any licensing agreements
- Compliance history with applicable state and federal regulations
Answers
Frequently asked questions
- How long does due diligence typically take?
- Timelines vary by deal size and complexity and should be scoped in the letter of intent rather than assumed. More complex acquisitions with real estate, employees, or regulatory licensing generally require more time.
- Who prepares the diligence request list?
- Buyer's counsel typically prepares and issues the diligence request list, tailored to the target's industry, structure and deal size.
- What happens if diligence uncovers a problem?
- Findings are typically addressed through renegotiated price, specific indemnification provisions, an escrow holdback, or in some cases a decision not to proceed. The appropriate response depends on the nature and materiality of the issue.
- Is diligence different for an asset purchase versus a stock purchase?
- Yes. An asset purchase allows more selective assumption of liabilities, which can narrow some diligence categories, while a stock purchase requires closer review of the entity's full history since the buyer inherits it.
Official sources
Consult the official sources above for current rules and procedures.