A General Checklist for the Transfer of
Corporate Ownership of Assets
Before buying or selling a business, both the buyer and the seller should thoroughly investigate the business. Attorneys refer to this investigation as doing “due diligence.” There are a number of public sources setting out what due diligence should include on federal, state, local and private websites.
At a minimum, the buyer and seller should review the following types of information:
1. General Structural Documents such as the business’ articles of incorporation and bylaws, articles of organization and organizational agreement or partnership agreement, each as amended to date.
2. Securities, including both debt securities (promissory notes and bonds) and equity securities (stocks, memberships, partnership interests).
3. Business activities within a reasonable period prior to the purchase, including business addresses used, fictitious business names used, affiliated businesses, and material contracts and permits.
4. Assets, both real property (land owned or leased) and personal property (office furniture, equipment, motor vehicles, inventory and accounts receivable).
5. Liabilities, including debts, lawsuits or claims, bad debts, etc.
6. Employee information, including directors, officers, and key employees, employee benefit agreements and policies, etc.
9. Insurance information including property, casualty, liability, E&O, key employee, life, and health insurance.
10. Proprietary rights, such as inventions, copyrights, service marks, trademarks, trade names and trade secrets.
11. Federal, state and local tax matters, both income and sales or personal property.
12. Financial statements.
And most importantly –
13. Everything else not covered in items 1 through 12, above.