The importance of due diligence checklist template

Due diligence checklist structure is important for lawyers and law firms engaged in major deals, such as the merger and acquisition (M&A) phase.

Using a guide, timeline or model form provides attorneys an structured and effective tool to help them compile, interpret and review all the details they have obtained during both basic and complicated legal procedures.

 

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A checklist, template, or flowchart is useful in almost any legal situation where an attorney wants to control the process or workflow. Besides, obvious topics such as financial information and strategic fit, a template can shed light on numerous other issues:

  • Gathering information on employee plans, such as health insurance, disability, severance plans, retirement plans, or any stock purchase or incentive plans. This is especially important during an M&A process, where the purchasing corporation needs to know what plans the target corporation offers its employees.
  • General corporate matters such as charter documents, board members, security holders, and the minutes of stockholder and board of director meetings are necessary to the acquisition process. This, of course, can be time-consuming, eating up work hours very quickly. A template or checklist helps streamline the information, making sure legal teams stay on track and investigate only the information they need.
  • A due diligence checklist or template can help a target company get further intelligence on competitors. The buyer will have access to the target company’s current and anticipated competitors, which may be new data. This allows the buyer to immediately determine the advantages and disadvantages of the company’s products and technologies.

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