A due diligence check list provides lawyers with a structure to collect, comprehend and evaluate the information they receive during complex or simple legal processes. 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 can improve efficiency, provide a better client service, and ensure that important information is not lost.
A good due diligence checklist is focused on the main areas of a business transaction and the documents that pertain to each one. This allows the person who is reviewing of the due diligence checklist to determine any https://datasquare.blog/how-vdrs-enhance-data-security-and-business-continuity/ legal issues that could arise from the merger or purchase and determine whether the deal is worthwhile.
Due diligence should include an examination of intellectual properties, contracts and compliance with the laws. Additionally, it should consist of checks of the financial stability as well as capability of the vendor. This includes checking accounts and credit reports and evaluating their firm’s capabilities and capacity. A due diligence checklist for a business should also include a review of the treatment of employees. This includes examining the benefits, pay, vacation time accrued or given, and determining if the company adheres to environmental standards.
The due diligence process should also include a thorough screening of third parties against lists provided by law enforcement agencies, like Interpol, the FBI or the National Crime Agency of the UK, and any countries that are connected to them looking for evidence of money laundering, corruption or terrorist activity. This is particularly important in dealing with high-net worth individuals, also referred to as PEPs. Interviews with important suppliers and other stakeholders are crucial to conduct an extensive due-diligence. This will allow you to get to know the company’s culture and the challenges it faces.