The investigation of a business before the signing of any binding contract is known as Due Diligence. The process includes examining past tax returns, viable contracts, and any employee or contractor agreements. Legal documents such as filings, articles of incorporation, and any past or pending lawsuits should also be considered.
These are three steps that should also be considered part of the Due Diligence process, as they should be completed before entering into any business agreements or transaction.
- Obtain all the necessary licenses and permits needed for your business to operate. The amount required depends on your industry and the state in which the business is located. The Small Business Association offers a licenses and permits finder tool to get a listing of federal, state and local permits and licenses you will need to run your business.
- Look into any applicable zoning requirements which may affect your business depending on its type and where you are intending to operate. You can check Stamford’s Zoning Regulations online documentation for a complete list of the regulations within the city.
- Check on any environmental concerns if you are acquiring real property along with the business acquisition. Visit EPA’s Small Business Gateway for more information on any environmental regulations.