Due Diligence Questionnaire (Business or Asset Purchase)

Updated for 2014

If you are considering buying a business, or substantial business assets, there are certain legal and commercial questions that you must raise with the seller in order to evaluate the business or assets.

This due diligence questionnaire sets out some of the questions that ought to be posed to the seller.

If you do not take the time to carefully evaluate any proposed acquisition of the business or its assets, you risk losing a large portion of the money you are proposing to spend. You may even lose all of it. Investment decisions should be made after prudent investigation and due diligence.

Further details are set out below.

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This legal due diligence questionnaire can be used by a person proposing to acquire a particular target business or business assets (the Target Business).

This due diligence questionnaire, while comprehensive, is designed for use in respect of all businesses generally. If there are specific issues relating to the Target Business that require specific investigation, you may need to add some additional questions to the due diligence questionnaire. For example, if the Target Business is a regulated financial business specific questions will need to be asked in relation to the business’s authorisations, licences and regulatory status. You should supplement the questions in this due diligence document where necessary to tailor it to the specific transaction in question.

This due diligence questionnaire contains a specific set of questions which a proposed buyer will raise with the sellers of the Target Business in order to obtain information and copy documents from the seller in relation to the Target Business.

The due diligence replies and information received by the buyer in response to the legal due diligence questionnaire will assist the buyer in assessing and evaluating the Target Business.

Where issues are identified in the due diligence replies, they will often be addressed by means of the inclusion of warranty or indemnity protection in the business purchase agreement or asset purchase agreement. For example, if there was a concern in relation to the holding of certain intellectual property rights by the Target Business, a warranty could be included pursuant to which the seller will warrant that the Target Business includes those specific rights. If it turns out post acquisition that the target doesn’t actually include those rights, the buyer will be able to take a warranty claim against the seller to recover any amount by which the value of the business is reduced due to it not having those intellectual property rights included. Similarly, if an indemnity is obtained from the seller, the buyer will simply be able to demand payment of any such amount from the seller without the need to prove a claim for breach of warranty in court.

Having completed the due diligence exercise, the buyer should be in a position to make an informed decision to either:

(i) proceed with the proposed acquisition on the terms tentatively agreed;
(ii) agree additional or revised terms in relation to the acquisition of the Target Business having regard to any legal issues identified from the due diligence exercise;
(iii) try to renegotiate the terms of the purchase to reflect any issues or liabilities identified during the due diligence process; or
(iv) withdraw from the transaction in its entirety.

For further information on due diligence, visit our learning centre.

Areas Covered by this Due Diligence Questionnaire:

- The Seller and the Business

- Business Assets

- Banking

- Business Commitments

- Trading Arrangements

- Business Contracts

- Permits / Grants / Licences

- Freehold and Leasehold Property

- Employees

- Pensions

- Intellectual Property

- Litigation

- Environmental

- Health and Safety

- Insurances

- Information and Communications Technology

- Stock and Suppliers

- Tax

- General

- Audited Accounts and Financial Statements
- Investments

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Solicitor Prepared Documents
You will be using documents which have been prepared, reviewed and pre-approved by solicitors with years of practical experience.
Compliant with Irish Law
You will be using tried and tested documents specifically tailored to comply with the various legal requirements applicable under Irish law
Advanced Features
Your documents will contain advanced solicitor approved provisions not usually found in standard run of the mill online documents
 
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