--- title: "M&A Due Diligence Checklist: 150+ Items by Category [2026]" description: "Detailed due diligence checklist for M&A transactions. 150+ items organized by category, with reviewer assignments and guidance for resolving red flags before closing." canonical: "https://acquisitionstars.com/due-diligence-checklist" firm: "Acquisition Stars" practice: "M&A and securities law" office: "Novi, Michigan (serves clients nationwide)" contact: "consult@acquisitionstars.com | 248-266-2790" --- # M&A Due Diligence Checklist M&A Resource 171 items organized by category to structure review of an acquisition target, assign the right reviewer, and track follow-up questions. Updated August 25, 2026 171 Total Items 104 Critical Items 8 Categories View Full Checklist Jump to Category ## What Is Due Diligence in M&A? **Due diligence is the comprehensive investigation a buyer conducts before completing an acquisition.** It's the process of verifying everything the seller has represented about the business-and uncovering what they haven't disclosed. Think of due diligence as a thorough home inspection before buying a house, except the "house" is an entire business with employees, contracts, legal obligations, and hidden risks. The checklist helps the buyer organize requests and document findings, but it does not replace advisor judgment or transaction-specific follow-up. ### Verify Claims Confirm that the seller's representations about revenue, customers, and operations are accurate. ### Identify Risks Uncover hidden liabilities, pending litigation, customer concentration, and other deal-breakers. ### Protect Investment Inform deal structure, negotiate protections, and know what you're buying before closing. ## Assign each workstream Give each category a named owner, a reviewer, and a deadline for escalating findings. The buyer's deal lead should coordinate the workstreams without asking one advisor to review matters outside that advisor's discipline. 1 M&A counsel Legal review: ownership, authority, contracts, litigation, and compliance 2 Accounting advisors Financial and tax review: earnings, working capital, debt, and tax exposure 3 Buyer's team Operational review: customers, suppliers, facilities, processes, and integration needs 4 Appropriate technical advisor Specialist review: IT, cybersecurity, environmental, benefits, or industry-specific issues ## Jump to Category Financial Due Diligence (25) Legal Due Diligence (26) Operational Due Diligence (20) Human Resources Due Diligence (25) Technology & IT Due Diligence (25) Commercial Due Diligence (20) Environmental Due Diligence (15) Regulatory & Compliance Due Diligence (15) ## Complete Due Diligence Checklist 171 items across 8 categories. Items marked with Critical identify common priorities to evaluate when scoping the review. ### Financial Due Diligence Review financial statements, accounting practices, and fiscal health 25 items Audited financial statements (3 years) Critical Unaudited monthly financials (24 months) Critical Federal and state tax returns (3 years) Critical Quality of earnings analysis Critical Accounts receivable aging report Critical Accounts payable aging report Revenue recognition policies Critical Deferred revenue schedule Working capital analysis Critical Capital expenditure history and projections Debt schedule with terms and covenants Critical Bank statements (12 months) Inventory valuation and aging Fixed asset register Chart of accounts Intercompany transactions and balances Related party transactions Critical Contingent liabilities and off-balance-sheet items Critical Insurance policies and claims history Budget vs. actual variance analysis Financial projections and assumptions Critical Cash flow statements and projections Critical Break-even analysis Gross margin analysis by product/service EBITDA adjustments and add-backs Critical ### Legal Due Diligence Review corporate documents, contracts, and legal compliance 26 items Certificate of incorporation and amendments Critical Bylaws and operating agreement Critical Good standing certificates (all jurisdictions) Critical Board meeting minutes (3 years) Shareholder/member meeting minutes Capitalization table and equity agreements Critical Stock option plans and grants Critical Material contracts list Critical Customer contracts (top 20) Critical Supplier/vendor contracts (top 10) Critical Lease agreements (real estate) Critical Equipment leases Loan and credit agreements Critical Guarantees and security interests Critical Partnership and joint venture agreements Licensing agreements (in and out) Critical Distribution and reseller agreements Non-compete and non-solicitation agreements Critical Pending and threatened litigation Critical Litigation history (5 years) Regulatory correspondence and investigations Critical Consent decrees and settlement agreements Critical Change of control provisions in contracts Critical Assignment and consent requirements Critical Powers of attorney UCC filings and liens Critical ### Operational Due Diligence Review business operations, facilities, and processes 20 items Organization chart Critical Business process documentation Facilities list with square footage Critical Equipment and machinery list Maintenance and repair records Production capacity analysis Quality control procedures Critical Product/service delivery processes Supply chain overview Critical Vendor concentration analysis Critical Inventory management systems Logistics and distribution network Key operational metrics and KPIs Critical Capacity utilization rates Backlog and order pipeline Critical Product roadmap and development pipeline Manufacturing agreements Warranties and returns history Critical Business continuity and disaster recovery plans Critical Standard operating procedures (SOPs) ### Human Resources Due Diligence Review employees, compensation, benefits, and workplace matters 25 items Employee census with titles and tenure Critical Executive team biographies Critical Employment agreements (key employees) Critical Compensation structure and salary ranges Critical Bonus and incentive plans Critical Commission structures Health and welfare benefit plans Critical Retirement and pension plans Critical Stock option and equity compensation plans Critical Employee handbook and policies Offer letter templates Severance policies and agreements Critical Non-compete agreements (employees) Critical Non-disclosure agreements (employees) Independent contractor agreements Critical Contractor vs. employee classification review Critical Union agreements and labor relations Critical OSHA compliance and workplace safety records Workers' compensation claims history Employee turnover statistics Critical Pending employment claims or litigation Critical I-9 and work authorization compliance Critical Key person risk assessment Critical Succession planning Training and development programs ### Technology & IT Due Diligence Review technology systems, intellectual property, and cybersecurity 25 items IT infrastructure overview Critical Software and systems inventory Critical Software license agreements Critical Cloud service agreements (AWS, Azure, etc.) Critical SaaS subscriptions and contracts Data architecture and database documentation API integrations and dependencies Source code ownership and access Critical Technology development roadmap Patent portfolio Critical Patent applications pending Trademark registrations Critical Copyright registrations Trade secrets inventory Critical IP assignment agreements Critical Open source software usage Critical Cybersecurity policies and procedures Critical Data breach history Critical Penetration testing results SOC 2 or security audit reports Critical Data privacy policies (GDPR, CCPA) Critical IT disaster recovery plan Critical System uptime and reliability metrics Technical debt assessment IT budget and spending history ### Commercial Due Diligence Review customers, market position, and competitive landscape 20 items Customer list with revenue by customer Critical Customer concentration analysis Critical Customer retention and churn rates Critical Customer satisfaction scores (NPS, CSAT) Sales pipeline and forecasting Critical Win/loss analysis Pricing strategy and history Critical Discount policies and practices Sales compensation and incentives Marketing strategy and budget Brand and trademark assets Critical Website analytics and traffic data Market size and growth analysis Critical Competitive landscape analysis Critical Market share estimates Industry trends and outlook Regulatory environment impact Critical Geographic market coverage Channel partner relationships Customer reference calls (5-10) Critical ### Environmental Due Diligence Review environmental compliance, permits, and potential liabilities 15 items Environmental permits and licenses Critical Environmental compliance history Critical Phase I Environmental Site Assessment Critical Phase II Assessment (if triggered) Critical Hazardous materials handling procedures Critical Waste disposal practices and records Air and water discharge permits Underground storage tank records Critical Asbestos and lead paint surveys Contamination remediation history Critical EPA or state agency correspondence Critical Environmental insurance policies Sustainability and ESG programs Carbon footprint and emissions data Environmental litigation history Critical ### Regulatory & Compliance Due Diligence Review regulatory compliance, licenses, and government relations 15 items Business licenses and permits Critical Professional licenses (if applicable) Critical Industry-specific regulatory compliance Critical FDA, FCC, or other agency approvals Critical Import/export licenses and compliance Government contracts and compliance Critical Anti-corruption and FCPA compliance Critical Anti-money laundering (AML) compliance Data privacy and protection compliance Critical HIPAA compliance (if applicable) Critical PCI DSS compliance (if applicable) Critical SEC filings and compliance (if public) Critical Regulatory examination history Critical Consent orders or regulatory settlements Critical Lobbying and political contributions ## How to Use This Due Diligence Checklist 1 ### Customize for Your Deal Not every item applies to every transaction. Remove items that don't apply to your target's industry or size. Add industry-specific items as needed. 2 ### Prioritize Critical Items Critical items require early review because they can affect authority, closing feasibility, valuation, structure, or risk allocation depending on the transaction. 3 ### Record Owners and Deadlines For each item, record the workstream owner, reviewer, status, open questions, and deadline for a documented resolution. 4 ### Track in Data Room Use your virtual data room's checklist feature to track which documents have been provided, reviewed, and flagged for follow-up. #### Pro Tip: The Checklist Is Just the Start A checklist ensures you don't miss obvious items, but thorough due diligence requires follow-up questions, verification of claims, and judgment about what the documents reveal. The checklist gets you documents-analysis turns them into insights. ## Prioritize red flags before closing A flagged item needs more than a note in the data room. Prioritize ownership and authority; liens, litigation, and compliance; contract assignment and consent requirements; and cross-functional exposure. Assign an owner, identify the reviewer, and record a resolution path that can be reflected in the transaction documents. ### Ownership and authority **Reviewer:** M&A counsel reviews formation records, capitalization, transfer restrictions, and required board or equityholder approvals. **Resolution path:** The buyer's deal lead assigns corrective documents or approvals to the seller. Unclear ownership and authority can change price or structure and may become a closing condition. ### Liens, litigation, and compliance **Reviewer:** M&A counsel reviews lien searches, claims, investigations, licenses, and regulatory correspondence, with a specialist where the industry requires one. **Resolution path:** The assigned owner obtains releases, resolves a compliance item, or defines a specific indemnification. The finding may also support a price change or a closing condition. ### Contract assignment and change-of-control consent **Reviewer:** M&A counsel reviews material customer, supplier, lease, debt, and license agreements for assignment restrictions and consent requirements. **Resolution path:** The commercial owner confirms relationship risk while counsel prepares a consent plan. Missing consent can affect structure, become a closing condition, or require price or indemnification protection. ### IP, employment, and tax exposure **Reviewer:** M&A counsel reviews IP ownership and employment obligations, accounting advisors review tax exposure, and the appropriate technical advisor tests specialist issues. **Resolution path:** The workstream owner documents remediation, a purchase price adjustment, a structure change, a closing condition, or tailored indemnification based on the finding. ## Related Due Diligence Resources ### M&A Due Diligence Process Guide Complete walkthrough of the DD process from LOI to closing ### Due Diligence Red Flags Warning signs that may require escalation, additional protection, repricing, a closing condition, or termination depending on severity and resolution ### Acquisition Timeline Guide How long DD takes and what happens at each phase ### M&A Transaction Risk Factors Context for evaluating diligence findings and post-closing risk ## Frequently Asked Questions **What is a due diligence checklist?** A due diligence checklist is a comprehensive list of documents, information, and questions that buyers use to investigate a target company before completing an acquisition. It ensures systematic review of all material aspects of the business including finances, legal matters, operations, employees, technology, and compliance. **How many items should be on a due diligence checklist?** The right number depends on the target's industry, transaction structure, operating complexity, and known risks. This checklist provides more than 150 starting points, but the buyer and its advisors should add, remove, and prioritize requests for the specific transaction. **What are the main categories of due diligence?** The main due diligence categories are: Financial (statements, taxes, working capital), Legal (contracts, litigation, compliance), Operational (facilities, processes, supply chain), Human Resources (employees, benefits, key person risk), Technology/IT (systems, IP, cybersecurity), Commercial (customers, market, competition), and Environmental (permits, contamination, compliance). **Who is responsible for due diligence in M&A?** The buyer is primarily responsible for organizing due diligence. The seller's information and access obligations depend on the agreed diligence process and transaction terms. Buyers often engage specialists: M&A counsel for legal review, accounting advisors for financial and tax review, and technical advisors for operational or specialist matters. The buyer's deal team coordinates the workstreams. **How long does due diligence take?** The schedule depends on the target's complexity, the seller's responsiveness, regulatory requirements, and the issues found during review. The parties should set a realistic diligence period in the letter of intent and update the work plan as findings create follow-up requests. **What happens if due diligence finds problems?** When due diligence uncovers issues, buyers have several options: renegotiate the purchase price, require seller representations and warranties, demand escrow holdbacks for specific risks, include indemnification provisions, require issues to be resolved pre-closing, or walk away from the deal entirely. **What is a data room in M&A?** A data room (typically a virtual data room or VDR) is a secure online repository where sellers upload documents for buyer review during due diligence. Data rooms track who accesses what documents, maintain version control, and allow Q&A between parties. Common providers include Intralinks, Merrill, and Firmex. **What are common due diligence red flags?** Common red flags include customer concentration, key person dependencies, declining revenue trends, pending litigation, regulatory compliance gaps, off-balance-sheet liabilities, inconsistent financial records, high employee turnover, and reluctance to provide requested documents. ## Need Help with Due Diligence? A checklist is just the start. Acquisition Stars provides legal counsel for buyers navigating the due diligence process-from document review to issue negotiation to closing. [Request Engagement Assessment](https://acquisitionstars.com/consultation) [Read Our DD Guide](https://acquisitionstars.com/blog/ma-due-diligence-guide) This checklist is for educational purposes and general guidance. Every transaction is different-some items may not apply, and industry-specific items may need to be added. Consult with qualified legal, financial, and industry advisors for due diligence specific to your transaction. --- Source: https://acquisitionstars.com/due-diligence-checklist Markdown version generated for machine readers. Canonical HTML at the source URL.