INSIGHT

M&A due diligence checklist 

Craig Hamm • June 16, 2025

Services: Due Diligence

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Mergers and acquisitions transform businesses, but success hinges on thorough preparation during the due diligence phase. You need comprehensive documentation to evaluate risks, validate assumptions and negotiate fair terms. Without proper organization and complete records, deals stall, parties lose confidence and opportunities disappear.  

8 categories of documentation due diligence checklist must include 

This article will outline the eight essential categories of documentation you need and explain why each component matters for successful M&A transactions. 

1. Corporate structure and legal foundation

 Start with your corporate documents, as these establish the legal framework of your business. You’ll need current articles of incorporation, bylaws and shareholder agreements that define ownership structures and voting rights. Board and shareholder meeting minutes reveal governance patterns and decision-making processes that impact operations. 

Stock certificates, capitalization tables and any preferred stock agreements show exactly who owns what percentage of the company. These documents prevent surprises during discussions and help buyers understand potential complications in ownership transfer.  

2. Financial performance and health  

Financial records paint the clearest picture of business performance over time. Compile three years of financial statements, including balance sheets, income statements and cash flow statements. Monthly management reports provide granular detail that annual statements might obscure. 

You’ll also need bank statements for all business accounts, credit agreements and documentation of outstanding debts or liabilities. Accounts receivable aging reports show collection patterns, while accounts payable details reveal vendor relationships and payment practices. 

Working capital analysis helps buyers understand seasonal fluctuations and cash requirements. Include budget forecasts and variance reports that demonstrate management’s planning accuracy and operational control. 

3. Tax compliance and obligations 

Tax documentation extends far beyond basic returns. Gather federal and state tax filings for the past three years, plus any correspondence with tax authorities regarding audits, disputes or settlements. Property tax assessments and payments show real estate obligations that transfer with ownership. 

Document any tax credits, incentives or special agreements that reduce tax burdens. Buyers need to understand whether these benefits continue post-acquisition or require renegotiation with local authorities. 

4. Revenue streams and market position 

Sales documentation validates growth claims and market positioning. Organize revenue data by customer, product line and geographic region to show diversification and concentration risks. Large customer dependencies become apparent through this analysis. 

Include sales pipeline reports, conversion rates and customer acquisition costs that demonstrate business development effectiveness. Customer contracts, especially multi-year agreements, provide visibility into future revenue stability. 

Marketing materials, competitive analysis and market research support growth projections and strategic positioning claims. SWOT analyses reveal management’s understanding of market dynamics and competitive threats. 

5. Human capital and organizational structure

People drive business success, making human resources documentation critical for integration planning. Compile employee lists with roles, compensation levels and reporting relationships. Organization charts show decision-making hierarchies and potential redundancies between merging entities. 

Employment agreements, especially those with key personnel, contain retention provisions, non-compete clauses and change-of-control triggers that affect post-acquisition operations. Benefits summaries help buyers calculate ongoing personnel costs and integration challenges. 

Document any pending employment disputes, discrimination claims or regulatory violations that create legal exposure. Union agreements and collective bargaining arrangements require special attention in unionized environments. 

6. Intellectual property and competitive advantages 

Intellectual property often represents the most valuable business assets in M&A transactions. Create comprehensive inventories of patents, trademarks, copyrights and trade secrets. Include pending applications and renewal schedules that require ongoing attention. 

License agreements, both inbound and outbound, define usage rights and revenue streams that may not appear in standard financial reports. Joint development agreements and research partnerships create shared ownership situations that complicate valuation and transfer. 

7. Technology infrastructure and security 

Technology systems enable modern business operations and require detailed documentation. Inventory all hardware, software licenses and cloud services with associated costs and renewal dates. Vendor contracts reveal dependencies on third-party providers and potential integration challenges. 

Cybersecurity policies, incident reports and audit results show risk management maturity. Data backup procedures, disaster recovery plans and business continuity protocols demonstrate operational resilience that buyers evaluate carefully. 

Document any security breaches, regulatory compliance issues or pending technology upgrades that require capital investment. Integration planning depends on understanding system compatibility and modernization needs. 

8. Regulatory compliance and risk management 

Industry-specific regulations create compliance obligations that buyers must understand and maintain. Compile all regulatory filings, inspection reports and correspondence with oversight agencies. Environmental assessments and remediation costs represent significant potential liabilities. 

Insurance policies, claims history and risk assessments help buyers evaluate ongoing coverage needs and potential exposures. Professional liability, product liability and general liability coverage gaps could create unexpected costs. 

Working with BPM for due diligence

Successfully navigating M&A due diligence requires meticulous preparation and professional guidance throughout the process. BPM provides comprehensive transaction advisory services that help you organize documentation, identify potential issues and present your business in the best possible light to prospective buyers or partners. 

Our transaction advisory team works alongside your existing advisors to ensure nothing falls through the cracks during this critical phase. We help streamline the due diligence process, address buyer concerns proactively and position your company for successful deal completion. To discuss how our transaction advisory services can help you achieve your strategic objectives, contact us.