{"id":2327,"date":"2023-03-29T18:59:00","date_gmt":"2023-03-29T18:59:00","guid":{"rendered":"https:\/\/testsite.socialitemediamarketing.ca\/?p=2327"},"modified":"2023-04-25T18:38:55","modified_gmt":"2023-04-25T18:38:55","slug":"due-diligence-checklist","status":"publish","type":"post","link":"https:\/\/queenston.net\/fr\/due-diligence-checklist\/","title":{"rendered":"Due Diligence Checklist"},"content":{"rendered":"
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Due Diligence Checklist<\/strong><\/span><\/h3>

By Jerry Butler<\/strong><\/span><\/p>

NOTE: Both buyer and seller should perform due diligence on the other party. This checklist is not a complete list, but is intended to cover some of the more common steps other buyers and sellers have taken. Every transaction is unique and the due diligence process must be adapted to the situation by the buyer and seller. Please consult your attorney and CPA for additional information and due diligence steps.<\/p>

\u00a0<\/p>

INITIAL REVIEW<\/strong><\/p>

Obtain a written breakdown of the client base showing the number of clients, their cities of residence and the number of years each client has been with seller\u2019s practice.<\/p>

Obtain a breakdown or production record of the revenue sources to the seller\u2019s practice, including types and frequency of revenue generated.<\/p>

Determine the office\/business structure (sole practitioner, corporation, Limited Liability Company), including identification of any partners \/ owners and their ownership interest, employees or other persons licensed to work with seller\u2019s client base. Obtain copies of any business plans, descriptions of company, or brochures. Determine who will sign contracts and whether that person or\u00a0 people have authority to perform the proposed transaction.<\/p>

Review Certificate \/ Articles of Incorporation, Determination, or Organization (or similar documents), including any amendments thereto; By-Laws, Operating Agreements, Partnership Agreements (general or limited) or similar documents, including any amendments thereto; and Minute Books, Consents and Resolutions (since inception) for Shareholders, Members, Board of Directors, and any committees of the foregoing.<\/p>

Review seller\u2019s office manual, compliance manual and privacy policy.<\/p>

Determine if seller\u2019s reported gross income includes bonuses, awards, or other forms of nonrecurring revenues that will not be available to buyer after closing.<\/p>

Determine the amount of broker-dealer override. Similarly, if seller is an investment advisor, determine the annual fees typically charged, the amount of any broker-dealer override on the investment advisory accounts and whether fees are charged in arrears or advance.<\/p>

Identify any market niches that seller has developed that may prove beneficial to a buyer.<\/p>

Print and confirm that any information received about Seller\u2019s business represents reasonably accurate data \u2013 determine any material changes since the date of listing, and reasons for the changes.<\/p>

Confirm that seller will assist buyer after closing in transitioning the client base to buyer on at least a part-time basis for at least three to six months (larger and more diverse client bases may require additional seller support and transition time).<\/p>

\u00a0<\/p>

CLIENT PROFILE \/ TRANSFERABILITY ISSUES<\/strong><\/span><\/p>

In order to ascertain and address any potential transferability issues, obtain a description of the client base to be acquired, including pertinent factors such as:<\/p>