A due diligence checklist provides lawyers with a system to collect, understand and evaluating the information they Drafting a Resolution of the Board of Directors: A Step-by-Step Guide receive in simple or complex legal procedures. A due diligence checklist can be useful for M&A activities and vendor onboarding as well as customer due diligence to support anti-money laundering compliance (AML) and Know-Your-Customer (KYC). It will increase efficiency, provide a better client service, and ensure that vital information is not lost.
A due diligence checklist that is effective will focus on the most crucial areas of a deal and the documents relevant to each one. This will allow the reviewer to identify potential legal issues that may arise from the merger or acquisition and assess whether the deal is worth pursuing.
Due diligence should include a thorough examination of intellectual properties, contracts and compliance with the law. Also, it should include checks on the financial stability of the vendor, including credit and checking statement reports, as well as evaluating a capacity and capabilities of the company. A company due diligence checklist should also include a review of how employees are treated including examining pay and benefits accrued or granted vacation time, and determining if the company adheres to environmental standards.
Due diligence should also include screening third parties against the 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 for indications of money laundering, terrorist activities or corruption. This is particularly important when dealing with high-net-worth individuals, also known as PEPs. Interviews with important suppliers and other stakeholders are essential for conducting a thorough due-diligence. This will help you get to know the culture of the company and the issues it faces.