Seller Due Diligence Checklist

Federal and state business tax returns. Buyers and lenders require these to verify reported income.

Monthly or annual P&L statements showing revenue, expenses, and net income trends.

Current assets, liabilities, and equity. Shows the financial health of the business.

Primary business bank account statements to verify cash flow and revenue deposits.

Current AR and AP reports showing who owes you money and who you owe.

List of all outstanding loans, lines of credit, and their terms. These get paid at closing.

Shows actual cash moving in and out of the business, separate from accrual accounting.

State and local sales tax filings verify reported revenue independently of income tax returns.

941 filings, W-2s, and 1099s for the past 3 years. Confirms employee costs.

If the business owns real estate or significant personal property subject to tax.

Proof that all taxes are current and the business is in good standing with state/federal agencies.

Current lease with remaining term, renewal options, and assignment clause. A transferable lease is essential.

Articles of incorporation, operating agreement, bylaws, or partnership agreement.

Active contracts, service agreements, and recurring revenue arrangements with customers.

Key vendor contracts, supply agreements, and pricing arrangements that will transfer.

Business licenses, professional licenses, health permits, and industry certifications.

Trademarks, patents, copyrights, domain names, and any IP assignments.

Any current lawsuits, past settlements, or potential legal claims. Buyers will ask.

General liability, professional liability, workers comp, and key person policies.

Written processes for day to day operations. Proves the business can run without you.

Inventory of all equipment, vehicles, furniture, and fixtures with condition and value.

All software, subscriptions, websites, and technology systems used by the business.

If applicable, a detailed inventory count with values. Often done at closing.

Who does what, reporting structure, and key person identification.

Names, positions, hire dates, and compensation for all employees.

Offer letters, non compete agreements, non disclosure agreements for key employees.

Health insurance, retirement plans, PTO policies, and other benefits.

Top 10 to 20 customers by revenue, showing concentration and relationship history.

How revenue splits across different products, services, or business lines.

Customer retention rates, repeat purchase rates, and churn metrics.

Current pending deals, proposals, or contracted future work.