Drafting a Resolution of the Board of Directors: A Step-by-Step Guide
A due diligence checklist provides attorneys with a system to gather, comprehend and assess information received in simple or complicated legal procedures. A due diligence checklist is useful for M&A activities and vendor onboarding as well as due diligence of customers to aid in anti-money laundering compliance (AML) and Know-Your-Customer (KYC). It will increase efficiency, provide better customer service and ensure that important information is not misplaced.
A due diligence checklist that is effective will focus on the key areas of a deal and the documents that pertain to each. This allows the reader of the due diligence checklist to spot any legal issues that may arise from the purchase or merger and decide if the transaction is worthwhile.
Due diligence should include a thorough examination of intellectual properties, contracts and compliance with the law. It should also include checks of the financial stability and capacity of the vendor. This includes looking over statements and credit reports as well as assessing their business’s capabilities and capacity. A due diligence checklist for companies should also include a review of the way employees are treated, including examining pay and benefits accrued or granted vacation time, and determining whether the company complies with environmental standards.
The due diligence process must also include screening third parties against lists compiled by law enforcement agencies, such as Interpol or the FBI or the National Crime Agency of the UK and any other countries that are connected to them, for signs of money-laundering, corruption or terrorist activity. This is particularly important in dealing with high-net-worth people also known as PEPs. Interviews with key stakeholders and vendors are also essential to conduct a thorough due diligence. This will allow you to get to know the company’s culture and the issues it faces.