A due diligence checklist can provide attorneys with a method to collect, understand and assessing information received in simple or complex legal processes. A due diligence checklist can be useful for M&A activities as well as vendor onboarding or due diligence of customers to aid in anti-money laundering compliance (AML) and Know-Your-Customer (KYC). It can boost efficiency, offer better customer service and ensure that important information is not missed.
A due diligence checklist that works will concentrate on the most important areas of a transaction and the documents that are relevant to each one. This will allow the reviewer to identify potential legal issues that could arise from a merger or acquisition, and determine whether the deal is worthy of proceeding.
Due diligence should include a thorough examination of contracts, intellectual properties and compliance with the law. It should also include checks on the financial stability of the vendor, including credit and checking statements, reports, as well as evaluating a capacity and capabilities of the company. A due diligence checklist for a business must also look at the treatment of employees. This includes looking at the benefits, pay, vacation time How Data Rooms Transform M&A: Secure Collaboration for Efficient Deals accrued, or provided, and determining if the company is in compliance to environmental standards.
Due diligence should also include screening third parties against the databases of law enforcement agencies like Interpol or the FBI, or the National Crime Agency of the UK and any other countries which are linked to them for evidence of terrorist crime or corruption. This is especially crucial when dealing with high-net-worth people who are referred to as PEPs. In addition to reviewing the documentation an exhaustive due diligence should also include interviews with key suppliers and stakeholders to learn about the company’s culture and the challenges facing it.