A Due Diligence Checklist helps you check the facts before you buy a business. You’re looking for proof of money, contracts, staff, and legal risk. If anything feels unclear, treat it as a red flag until you see documents.
In This Article
1) Ownership and structure
Start by confirming the seller can actually sell what you’re buying. Ask for the company details and who owns the shares or assets. Look for anything that blocks a sale or adds extra steps.
Quick check:
Company registration details
Shareholders and share split
Any agreements that affect a sale
2) Financials
Don’t rely on a “good year” story. Your Due Diligence Checklist should focus on stable income, cash flow, and debt.
Review:
Accounts (last 2–3 years) and recent management accounts
Tax and VAT position
Loans, finance, and outstanding liabilities
Customer concentration (how much comes from the top customers)
3) Contracts
Contracts can change after a sale, or they can allow termination. Read them before you commit.
Focus on customer and supplier contracts, property/lease terms, finance agreements, and anything with a “change of control” clause.
4) Staff and working arrangements
People’s issues can hit you fast after completion. Check what you’re taking on, and what could turn into a dispute.
Key items:
Employment contracts and pay terms
Holiday, sick pay, and any unpaid amounts
Any active complaints, disciplinaries, or claims
5) Property, equipment, and assets
Be clear on what you own on day one. Sellers often assume “it’s all included”. Your Due Diligence Checklist should confirm it.
Look for proof of ownership, asset lists, maintenance history, and any hire purchase or leasing that still needs paying.
6) Legal, compliance, and disputes
Ask what’s happened, what’s happening now, and what might happen next. Then check the paperwork matches.
At minimum, review licences and permits, regulatory requirements (if relevant), and any current or threatened disputes. If the business holds customer data, check the basics of data handling too.
7) Brand and intellectual property
Sometimes the value is the name, website, and systems. Make sure the business owns them and can transfer them.
Check ownership of the domain, website access, trademarks (if any), logos, and key software licences.
8) Customers, suppliers, and reputation
A business can look fine in accounts and still have problems in the real world. Review where enquiries come from, how repeat business works, and how stable suppliers are.
Do a quick sense check on complaints, refunds, online reviews, and recurring service issues.
9) Insurance
Insurance gaps become your problem once you own the business. Ask what cover exists and what claims have been made.
Common types include public liability, employer’s liability, professional indemnity, and cyber (if relevant).
10) Deal protection
This is where you protect yourself if something turns out to be wrong later.
Your Due Diligence Checklist should end with warranties, indemnities, a non-compete, and a clear handover plan.
Your Next Step
Before you agree on a price or pay a deposit, get a solicitor to run through your Due Diligence Checklist with you. If you want a quick steer, book a free consultation and bring what you already have (accounts, heads of terms, lease, and key contracts).
Contact us today at 0121 268 3208 or via email at info@onyxsolicitors.com for a FREE consultation. Let us help you achieve the peace of mind that comes with having expert legal support on your side.
