Business Due Diligence Checklist for BC Buyers

Organize the request before reviewing documents

Due diligence is easier when the buyer, seller and advisers use one request list and one consistent review period. Begin by confirming what is being purchased, which records are available, who can answer questions and when each condition expires.

The scope should fit the business and transaction structure. A restaurant, franchise, licensed retailer, industrial operation and professional service firm will not have identical risks. Your lawyer and accountant should tailor the request to the proposed purchase.

• Proposed asset or share-purchase structure
• Corporate ownership and authority to sell
• Complete list of included and excluded assets
• Condition dates, advisers and document owners
• Secure method for sharing confidential records

Reconcile financial performance to source records

Review multiple completed fiscal years plus current year-to-date results. Compare financial statements and tax returns with the operational systems that created the revenue and the bank activity that received it.

Test owner adjustments rather than accepting a summary. Separate recurring operating costs from one-time or owner-specific items, and model realistic wages, rent, debt service and working capital under your ownership.

• Financial statements and corporate tax returns
• POS, invoicing or booking-system reports
• Bank and merchant-processor statements
• GST, PST and payroll remittance records
• Accounts receivable, payables and aged balances
• Owner adjustments with supporting documents

Review the premises, people and operating assets

For a leased business, the lease can determine whether the acquisition works. Review the remaining term, options, full occupancy cost, use clause, assignment or change-of-control provisions, security and landlord requirements with legal counsel.

Confirm which employees, contractors, equipment, inventory, permits, digital assets and supplier relationships are expected to transfer. Inspect material equipment and search for financing or liens through the appropriate professional process.

• Lease, amendments and landlord correspondence
• Employee roles, compensation, vacation and obligations
• Equipment register, ownership and maintenance records
• Inventory count and valuation method
• Material customer and supplier contracts
• Licences, permits, insurance and claims history

Turn findings into conditions and a closing plan

Due diligence is not complete when the documents have merely been received. Record unresolved questions, test whether the proposed price and terms still make sense, and decide which matters must be resolved before condition removal or completion.

The purchase agreement, closing adjustments, consents, training, employee communication and transfer of systems should be coordinated with qualified advisers. This checklist is a starting point, not legal, tax, accounting, lending or investment advice.