A due diligence checklist gives lawyers a framework to collect, understand and evaluate the information they receive during simple or complex legal procedures. A due diligence checklist can be 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 boost efficiency, offer a better client service, and ensure that crucial information is not misplaced.

A thorough due diligence checklist focuses on the most important areas of a business transaction and the documents that are relevant to each one. This allows the person who is reviewing of the due diligence checklists to pinpoint any legal issues that might arise from the merger or purchase and determine if the purchase is worth it.

The due diligence process should include a review of contracts, intellectual property, and compliance with the laws. It should also include checks on the financial stability of the vendor, including checking statements and credit reports, as well as evaluating the capabilities and capacity of the company. A company due diligence checklist should also look at the way employees are treated, including analyzing pay and benefits and accrued vacation time, and determining whether the company is in compliance with environmental standards.

The due diligence process should also include a thorough screening of third parties against lists provided by law enforcement agencies, such as Interpol or the FBI or the National Crime Agency of the UK as well as any other countries associated with them looking for evidence of money-laundering, corruption or terrorist activities. This is particularly important in dealing with high-net worth individuals also known as PEPs. Along with reviewing documentation, a thorough due diligence should also include interviews with key suppliers and stakeholders to understand the company’s culture and the challenges it faces.

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