Due Diligence Made Simple: What Buyers Will Ask For

Due diligence doesn’t have to be overwhelming. Here’s what buyers typically request and how to prepare so the process stays on track.

The due diligence process is a critical phase in every business sale. It provides both the buyer and the seller with clarity, confidence, and transparency before completing a transaction. Kelly Business Advisors manages this process from start to finish, giving you secure access to an organized, encrypted data room where all documents are stored, shared, and monitored throughout diligence.

Your full transaction team — including your M&A Advisor, accountant, financial professionals, and subject‑matter experts — will be engaged to ensure every aspect of the review is thorough, accurate, and aligned with your goals.

Buyer Due Diligence Checklist

What a buyer may want to inspect when evaluating a business can vary widely. Some buyers review only high‑level information, while others conduct a deep review. While providing this information can feel burdensome, the more complete and organized the information, the lower the risk of post‑sale claims or disputes. We have had many transactions where the buyer has spent very little on this, and we have had some where the buyer has spent more than a million dollars.

Areas buyers may consider when in due diligence:

1. Financial Due Diligence
2. Legal Due Diligence
3. Operational Due Diligence
4. Commercial / Market Due Diligence
5. Environmental and Regulatory Due Diligence
6. Real Estate and Physical Assets
7. Miscellaneous

Seller Due Diligence on the Buyer

What a seller should evaluate about a buyer before closing:

1. Financial Capability
2. Buyer Reputation and Track Record
3. Ability to Close
4. Strategic Fit and Post‑Close Intentions
5. Contingencies and Deal Structure
6. Cultural Fit (Especially Important in the Lower‑Middle Market)

Typical Ancillary Agreements (In Addition to an Asset or Stock Purchase Agreement)

Corporate / Transactional

• Bill of Sale
• Assignment and Assumption Agreements
• Intellectual Property Assignment Agreement
• Stock Power (for stock transactions)
• Closing Certificate
• Officer and Secretary Certificates

Employment and Related Agreements

• Employment agreements for key employees
• Non‑compete agreements
• Non‑solicitation agreements
• Offer letters and retention agreements

Transition Agreements

• Transition Services Agreement (TSA)
• Training or consulting agreements
• Lease assignment or new lease agreements

Financing and Risk

• Promissory note (if seller financing)
• Security agreement
• Subordination agreement
• Escrow agreements
• Indemnification agreement

Governance and Intellectual Property

• Shareholder agreement (if rollover equity)
• Operating agreement for new entities
• Trademark and patent assignments
• Software license agreements
• Data processing and privacy agreements

Other Possible Documents

• Customer or vendor consent forms
• Board resolutions
• Confidentiality or non‑disclosure agreements
• Bulk sales law filings (where applicable)

Kelly Manages the Workflow End to End

Kelly Business Advisors oversees due diligence, ensuring efficiency, minimizing operational disruption, and keeping you informed as the buyer receives large volumes of information. You will have continuous access to the secure data room, receiving a complete downloadable copy at the transaction’s close. With Kelly managing the workflow and your transaction team engaged, you can confidently move toward closing, knowing all critical details are professionally reviewed and documented.

Detailed diligence can sometimes concern sellers; remember that attorneys and experts are protecting their clients. Maintaining perspective and humanizing the process can help keep the deal on track.

If you want help building a diligence‑ready plan for your business, contact us.