How Do You Create a Due Diligence Checklist?


Quick Answer

To make a due diligence checklist, create a list of important areas to evaluate, divide every item on the list into specific components, and record all items using a spreadsheet or tracking process, instructs the Houston Chronicle. An extensive checklist allows you to confirm a company's financial status.

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Full Answer

A due diligence checklist typically includes the company's finances, human resources, legal matters, taxes and licenses, notes the Houston Chronicle. Ask your financial adviser or attorney for a due diligence checklist template, and personalize the template or add items as necessary.

Seek advice from experts who can give you an idea of the crucial operational areas in the upcoming acquisition, recommends the Houston Chronicle. Expand the list by adding particular files or materials that can help with your assessment. For example, create a Corporate Issues header, under which you can list stock records, shareholder agreements, tax returns, company bylaws and other similar items. When creating a spreadsheet, add a column to mark and date every completed item.

A due diligence checklist refers to a complete list of relevant queries, valuable documents and other information to examine before acquiring another business, explains the Houston Chronicle. It helps you recognize existing legal and operational problems, discover other policy-related issues and verify whether a company is in good standing as certified by the local secretary of state.

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