Incorporation - If you are acquiring the shares of the company ensure that the incorporation of the company meets all legal and registration requirements.
Bonds & Deposits - A lot of businesses, especially those that are licensed require bonds and/or cash deposits placed with government agencies in order to maintain licenses. If bonds or deposits are currently in place are you going to reimburse the current owner for their value?
Corporate By-laws - Do the corporate by-laws allow for the sale of the business?
Share Registry – Is the corporate share registry up to date?
Registered Agent – Is the Registered Agent of the company the owner, a legal firm or another entity? Determine fees if any and if a change will be necessary if and when you acquire the business.
Date of Ownership – has the seller owned the corporation from its inception? If the current owner has not owned the corporation for at least five years, what are the terms and conditions of his Purchase Agreement with the previous owner especially with regard to liabilities?
Banking – Ensure that you are aware of and have performed your due diligence on all the company’s bank accounts. If the company that you are considering acquiring does business in foreign markets check to see if there are bank accounts in foreign currencies and if there are foreign bank accounts. If foreign bank accounts are present then you must determine the conversion value that was utilized on all financial statements to account for any foreign currency transactions.
It is not uncommon for even the smallest of companies to have numerous bank accounts such as a current account, money market account, payroll account and a petty cash or warehouse account. Companies that operate in a global market may maintain accounts in other currencies especially if they will have an ongoing use for the funds in that currency (trade shows, sales trips, other local expenses such as warranty service), this avoids any costs in foreign currency translations.