Due diligence checklist UK

What due diligence is for

Due diligence is the investigation a buyer carries out before deciding whether and on what terms to complete a purchase. It can cover financial, legal, commercial, tax and operational matters. The scope depends on the business, transaction and risks the parties identify. A checklist provides an organised starting point, not a statement that the list is complete or that every issue has been checked.

For a seller, preparation means knowing where records are, which statements can be supported and which gaps need explaining. For a buyer, it means asking relevant questions and involving the right advisers. The Sale Pack does not perform due diligence or certify a business. Its data room index helps organise information for the process.

Financial records

Gather annual accounts, management records and current trading comparisons with clear periods. Keep evidence for the turnover, gross margin and profit figures shown in the IM. Include the owner-pay breakdown and the basis for replacement costs or other adjustments. A bank statement alone does not explain profitability, and a turnover increase does not prove that cash collection or margin improved.

Depending on the proposed deal, advisers may ask about cash, borrowings, tax balances, stock, debtors, creditors and working capital. Record what the figures represent and their dates. Do not mix a balance-sheet date with a later cash estimate without saying so. A seller-only indicative valuation is separate from the factual records given to buyers.

Company, customers and contracts

Company and ownership records should support the proposed share transaction where relevant. Check the share register, company details and material agreements. Customer information may begin in anonymised form before identifying records are shared through the confidentiality process. Customer concentration, recurring contracts and repeat orders each need their own evidence.

Collect material customer and supplier contracts, order information and any restrictions relevant to the transaction. Do not assume that a relationship transfers merely because the business has used it for years. The solicitor should check assignment, novation, change-of-control and consent issues against the actual agreements. The product does not make those legal conclusions.

Premises, staff and operations

A premises folder might contain the signed lease, rent records, plans and relevant correspondence. Equipment records may cover ownership, finance, maintenance and licences. Software and intellectual property records should show who owns or may use them. Growth ideas in the IM are not a substitute for capacity records or evidence of demand.

Staff information needs care. Begin with what is relevant and avoid unnecessary personal details. Employment contracts, pension information, leave and other records may need controlled disclosure and adviser review. If staff are unaware of the sale, decide the communication plan separately. Do not use a buyer enquiry as a reason to approach employees without the seller’s consent.

Manage the questions and completion list

A data room index should distinguish a suggested folder from a supplied document. Mark missing items and explain them. Use clear names and dated versions. Answer questions accurately, and record corrections rather than quietly replacing a document that a buyer may already have downloaded. The seller chooses whether a room answer is private or published to approved buyers.

The agreed offer and Heads of Terms help define the timetable and conditions. After those are reviewed, the completion checklist follows the chosen share or asset sale. Your solicitor should confirm the legal deliverables. A tick in a product checklist is not evidence that a transfer, consent or payment has happened. Keep the actual completion records.

Build free, pay when you are ready

The Sale Pack starts with your own answers and accounts. You check the figures, explain the business and decide what is included in the proposed sale. You can see the indicative valuation and marketing documents in a protected preview without paying. Legal documents are named in the preview contents, rather than shown as free legal drafts. Pay £495 only when you are happy, then download and use the documents. No VAT is charged. There is no broker commission.

The price is for one business and one deal. It does not include finding buyers, negotiation, portal listing fees or professional advice. Your solicitor and accountant remain separate from the product. The service is self-serve. Support is limited to payment, login, upload faults and data requests. No one checks the commercial merits of your proposed deal for you.

Keep control of the information

A public advert or blind teaser should not name your business or give away identifying details. The named Information Memorandum can contain more information, but it belongs behind the confidentiality process you choose. Website-sourced logos, colours and photographs are restricted to that named document. Do not put them in a blind teaser. A buyer room is a paid feature and the seller controls access after email verification and a signed NDA.

Before sharing a pack, read every document and check it against your records. A tidy layout is not evidence that a statement is correct. Explain gaps rather than filling them with guesses. Keep seller-only valuation information out of documents sent to buyers. Ask your own advisers about tax, legal effect, employee matters and any regulated part of the transaction. The product does not rank buyers or tell you which offer to accept.

Common questions