A due diligence checklist provides lawyers with a structure to collect, understand and evaluate the information they receive in simple or complicated legal procedures. A due diligence checklist is useful for M&A activities such as vendor onboarding, customer due diligence to support anti-money laundering compliance (AML) and Know-Your-Customer (KYC). It can improve efficiency, provide better customer service and ensure that vital information is not misplaced.
A due diligence checklist that works will concentrate on the most important aspects of a transaction as well as the documents that pertain to each one. This will enable the reviewer of the due diligence checklist to determine any potential legal issues that could arise from the merger or purchase and determine whether the deal is worth it.
Due diligence should include an examination of How Data Rooms Transform M&A: Secure Collaboration for Efficient Deals intellectual properties, contracts and compliance with the laws. It should also include checks of the financial stability and capabilities of the vendor. This includes looking over statements and credit reports and evaluating their firm’s capabilities and capacity. A due diligence checklist for a company should also consider the treatment of employees. This includes examining the amount of pay, benefits, and vacation time accrued, or provided, and determining if the company complies with environmental standards.
The due diligence process should be accompanied by screening third parties against lists compiled by law enforcement agencies, like Interpol as well as the FBI or the National Crime Agency of the UK as well as any other countries associated with them looking for evidence of money-laundering, corruption, or terrorist activities. This is particularly crucial when dealing with high-net worth individuals, also known as PEPs. In addition to reviewing the documentation an exhaustive due diligence should also include interviews with key stakeholders and suppliers to understand the company’s culture and the challenges facing it.
