A due diligence check list provides attorneys with a framework to collect, understand and assess information received through simple or complex legal processes. A due diligence checklist can be useful for M&A activities such as vendor onboarding, due diligence for customers to help support anti-money laundering compliance (AML) and Know-Your-Customer (KYC). It can improve efficiency, provide a better client service, and ensure that vital information is not lost.
A thorough due diligence checklist focuses on the main areas of a transaction with a business and the documents relevant to each. This will allow the examiner to identify legal issues that could arise from the merger or acquisition and decide whether the deal is worthy of proceeding.
Due diligence should include an examination of intellectual properties, contracts and compliance with the laws. It should also consist of a thorough examination of the financial stability and capacity of the vendor. This includes checking statements and credit reports and evaluating their firm’s capabilities and capacity. A due diligence checklist for a company must also look at the treatment of employees. This includes examining the amount of pay, benefits, and vacation time accrued, or provided, and determining if the company complies to environmental standards.
Due diligence should also include screening third parties against the lists of law enforcement agencies like Interpol or the FBI or the National Crime Agency of the UK and all countries which are linked to them to look for signs of money laundering, terrorist crime or corruption. This is virtual due diligence rooms especially important when dealing with high-net worth individuals, also referred to as PEPs. Interviews with key suppliers and other stakeholders are important to conduct a thorough due-diligence. This will help you learn about the culture of the business and its issues.