Orange County business consulting attorneys often complete what is referred to as “due diligence.” This is a process in which attorneys review the relative health of a business, profit potential and possible risks so that they can advise their clients about the possibility of buying a particular business.
The most important aspect of due diligence is usually to assess the business finances. Orange County business consulting attorneys may analyze financial documents such as tax returns, balance sheets and profit and loss statements. They may also dig a little deeper to look at rates of unemployment in the business, sales tax, audit forms, accounts receivable and accounts payable.
A business may appear from the outside to be fiscally healthy. However, due diligence requires that consultants assess the debts that the business is attached to. A potential buyer should be aware of any liens against business property. Additionally, consultants should inspect the physical assets of the business to determine if they are properly valued.
Consultants can also investigate any legal filings that may affect the business. Consultants should check that the proper business filings were made to incorporate the business, if applicable. The consultants should also review documents that spell out how the business can be legally transferred, such as the operating agreements, resolutions and bylaws. The person who is attempting to sell the property must have the legal right to do so or chaos can ensue. The business should be listed as in good standing with the state.
For more information on due diligence, contact Orange County business consulting attorneys from Daily Aljian LLP.