Law Offices of
BUSINESS PURCHASE-A Business Checklist of Questions to Ask the Seller
- Listing of the 10 largest customers and the approximate sales thereto for the latest fiscal year.
Also indicate how long each has been a customer and provide the names of any major accounts lost in the last two years with the sales volume lost therewith.
- Listing of the 5 largest competitors showing name, address and estimated sales volume.
- Describe facilities occupied, including approximate square footage devoted to warehouse, offices, other.
Also provide a copy of any leases of personal or real property.
- Provide details relating to any stockholder loans, including rate, monthly payment, term, security and purpose.
- Names of any affiliated companies, i.e. other companies owned by the owners of target company or by directors, etc., and nature of such businesses.
- Describe nature of employee benefit plans in effect, including information as to who is covered, approximate cost to the company, etc.
- Describe nature of products sold and service activities as is most logical to divide into major components, and approximate gross sales relating to each major component.
- Describe advertising activities.
- List the 5-10 largest suppliers and approximate dollar volume of purchases from each for the latest fiscal year end.
- Describe any commission arrangements with in-house or with outside sales people, including any representative or distribution agreements.
- Describe the nature of any pending lawsuits.
- Provide names and addresses of:
- Company attorney, including name of individual responsible for work;
- Company accountants, including name of individual responsible for work;
- Company bank and banker;
- Company insurance agency and agent.
- Contact each for checks on good standing, credit, timely return filings, etc.
- Prepare a brief narrative history of the company, ownership changes, growth, location changes, position in the industry relative to competition, including qualitative (reputation) factors, etc.
- Indicate business hours open.