A due diligence checklist provides attorneys with a structure for collecting, understanding and evaluating the information they receive during complex or simple legal processes. It can be utilized for M&A and vendor onboarding or customer due diligence activities supporting anti-money laundering (AML) and know-your-customer (KYC) compliance A due diligence checklist can improve efficiency, deliver better customer service and ensure that important information is not left unnoticed.
A comprehensive due diligence checklist is focused on the key areas of a business transaction and the documents that are relevant to each. This will allow the user of the due diligence checklist to spot any potential legal issues that could arise from the purchase or merger and determine if the purchase is worth it.
The due diligence process must include an examination of contracts, intellectual property rights and compliance with the law. It should also consist of a thorough examination of the financial stability and capabilities of the vendor. This includes examining credit reports and statements and evaluating their firm’s capabilities and capacity. A due diligence checklist for a company should also examine the manner in which employees are treated. This includes looking at pay, benefits, vacation time accrued or given, and determining if the company complies with environmental standards.
Due diligence should also include a screening of third parties against lists of law enforcement agencies, such as Interpol or the FBI, or the National Crime Agency of the UK and all countries that are associated with them to look for signs of money laundering, terrorist activity, or corruption. This is especially important when dealing with high net-worth individuals who are referred to as PEPs. Interviews with important suppliers and other stakeholders are essential to conduct a thorough due-diligence. This will allow you to learn about the culture of the company and the issues it faces.
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