Legal Due Diligence Support
What is legal due diligence? Legal due diligence is the review of a business's contracts, entity records, licenses, leases, employment matters and liabilities before you buy it. The Exit School gives buyers a legal diligence checklist, helps them gather the documents, and introduces them to an experienced deal attorney who reviews them and drafts closing documents.
Who it's for
- Buyers moving toward closing who need to know what legal risks come with the business and want an attorney who understands small business acquisitions.
What's included
- A legal due diligence checklist covering entity and ownership records, customer and vendor contracts, leases, licenses and permits, employment matters, intellectual property, and pending or past litigation
- Guidance on requesting documents from the seller
- Introduction to, a deal attorney experienced in small business acquisitions
- Follow-up with the attorney to keep the deal moving to close
- Help preparing closing schedules and disclosure lists
How it works
- Work through the legal items on your due diligence checklist.
- Gather documents from the seller into your closing folder.
- Meet the deal attorney and review findings.
- Prepare closing schedules, with negotiation support if needed.
- The attorney finalizes the purchase agreement and closing documents.
Important to know
- The Exit School is not a law firm and does not provide legal advice.
Frequently asked questions
Do I need a lawyer to buy a small business?
Yes. A deal attorney protects you in the purchase agreement and catches liabilities you might miss. We coordinate the process; the attorney provides legal advice.
What legal documents should I review before buying a business?
At minimum: formation documents, major contracts, the lease, licenses and permits, employee agreements, and any litigation history.
What is the difference between an asset purchase and a stock purchase?
In an asset purchase you buy selected assets and generally leave most past liabilities behind. In a stock purchase you buy the entity itself, including its history. Your attorney will advise which fits your deal.