Due Diligence Checklist 2022

Due diligence is not only important in major business transactions, but it is also mandatory in some cases, such as real estate dealings, M&A deals, and other types of capital investments. Yes, the due diligence process may vary in different industries, but certain types of documents are a mandatory part of due diligence.

One of the biggest challenges for firms is preparing a comprehensive due diligence checklist to ensure all the corporate records are easily available during acquisitions, mergers, and other similar transactions.

Need a little help with preparing a helpful checklist in 2022? Well, not only are we going to mention some important things about the due diligence checklist, but you will be amazed to know how technology, such as virtual data rooms, can help you with it.

Virtual data rooms and due diligence

Virtual data rooms and due diligence

The due diligence process is complicated, but it is also a lengthy one. Depending on the type of transactions, such as initial public offerings (IPOs), mergers and acquisitions, joint ventures, etc., the process may take months to complete.

However, with an electronic data room (aka data room software) coming into play, the due diligence process has become faster and a lot easier. A dataroom allows corporations to upload and store their business documents in a highly secured online repository that is easily accessible 24/7.

Firms or companies can then organize all the documents in folders and subfolders according to their categories. Moreover, data room services make it easy to retrieve any document just by searching it with a keyword or file name.

We’ll talk more about online data room software to help businesses in the due diligence process; but before that, let's talk about the due diligence checklist in 2022.

What is the due diligence checklist?

Due diligence checklist is simply an organized way to systematize all the necessary corporate documents that are necessary during mergers and acquisitions, initial public offerings, joint ventures, fundraising, etc.

This checklist helps both parties (sellers and buyers). Sellers can use the due diligence checklist to arrange all essential documents in a suitable sequence. On the other hand, buyers can prepare a checklist to know where to start and what documents must be evaluated.

Due diligence checklist for 2022

Note; this checklist is not a final verdict but only a few recommendations to make things easy for corporate teams. Here are the corporate documents that must be part of any checklist.

1. Company’s general information

General information includes;

  • Articles Of Association (AOA)/Articles of Incorporation
  • Meeting minutes book
  • List of subsidiaries, partnerships, joint venture agreements, etc.
  • Corporate bylaws or any amendments
  • Certificate of good standing
  • List of all jurisdictions where the entity is legally permitted to conduct business

2. Organization and ownership information

  • Organization chart
  • List of company’s directors and officers
  • Records related to grants of options, stocks, warrants, etc.
  • Detailed listed to company’s shareholders
  • Complete documentation of past as well as current shareholders’ rights, agreements, etc.

3. Administration and real estate

  • A complete list (with detail) of the company's business locations that may include any or all leased or owned properties where the company runs business operations and maintains its employees
  • All copies of zoning approvals, title policies, real estate leases, mortgages, and deeds

4. Accounting and financial records

  • All quarterly and annual audited financial statements of the last three years (at least)
  • A copy of the general ledger of the corporation
  • Financial statements (unaudited)
  • Strategic plans’ descriptions
  • Future financial projections
  • Budget plan
  • Credit agreements, loan agreements, compliance certificates, etc.

5. Taxation

  • Local, foreign, state, and federal income tax returns (at least last three years)
  • Last three years’ sales tax returns
  • Documents related to any tax settlements or liens
  • Last three years’ excise tax filings
  • Last three years’ employment tax filings

Apart from that, other significant documents that must the part of the due diligence checklist include

  • Documents of legal affairs such as litigations, law suits, decrees, settlements, judgments, etc.
  • Regulations and compliance documents such as governmental consents, permits, and licenses, copy of the compliance policy of the company, etc.
  • A list of all physical assets
  • Documents related to intellectual properties
  • A detailed list of the company's assets and their details.

Furthermore, there can be documents related to customers, human resources, employees, etc., that should be part of the due diligence checklist.

Advantages of a virtual data room in significant financial ventures


Here is how data room software makes things easier in M&As, IPOs, joint ventures, etc.

  • Virtual data rooms act as secure data repositories and virtual platforms where sellers can upload corporate documents and give access to potential bidders by adding them to the data room. Data room security features allow the VDR administration to avoid data thefts or leaks.
  • Data room administration can monitor every single activity in the data room. This ensures maximum transparency during the deals.
  • Company management can simultaneously add multiple potential buyers in the data room to speed up the deal process.

However, it is highly recommended to use the services of the best virtual data room providers in the market that comply with all the security protocols. One easy and reliable way to compare virtual data rooms is to visit reliable internet sources such as Capterra, G2, etc.

Final words

Due diligence checklist is one great way to prioritize or categorize documents to evaluate in M&As, joint ventures, or other similar financial transactions. It saves your time during the process but also helps you avoid future uncertainties.

Besides, getting help from modern business software, such as the best data rooms on the market, can minimize the chances of human errors, while speeding up the process significantly.

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