This process can vary from a brief review of a company's statutory books of record to a lengthy review of the whole of a business' past history, involving multi-disciplinary teams of professionals.

The level of detail required depends on a number of factors:

• The age of the business - young businesses have had less time to build up a history.
• The type of business - a business consisting of an idea, with few staff, no premises and no stock, requires much less investigation than one with a developed product, manufacturing plant and hundreds of employees.
• The level of investment - acquiring a shell of a company for £1 from the liquidators generally requires little due diligence effort, but acquiring a large manufacturer for £20M funded by debt from your bankers will necessitate considerable investigation.
• The level of the buyer's familiarity with the seller's business area.

The type of work involved varies dramatically depending on the assets and (real and potential) liabilities of the business.  For example:

• Employee intensive businesses - detailed investigation of the contracts of employment of the staff, when they joined, what their terms of engagement are (i.e what is the potential redundancy cost if all went badly), how does it fit with the buyer's terms. If the business is being acquired as assets and liabilities rather than shares in a company, have the requirements of the transfer of employment regulations (TUPE) been observed, have all the PAYE obligations been met, are there any outstanding employee claims for dismissal or injury.
• Property intensive business - does the business really own the property, if it is leased, are the lease terms acceptable, how was the purchase financed, are there outstanding mortgages, is the business permitted to transfer the property.
• Technology businesses - does the business own the rights to do what it does, does anyone else have overlapping rights, are there any competitors already using the businesses rights, have all the rights been properly recorded and registered.
• All businesses - are the tax and VAT payments correct and up to date, has the business complied with all relevant statutory and regulatory compliance requirements, is there outstanding or threatened litigation, are the directors prohibited from acting as such, do any of the prime movers have conflicts of interests.

Each transaction is unique and we at VSH are experts at tailoring our due diligence effort  to the client's needs.