When an organization is considering a major strategic development, such as seeking new investors or perhaps even selling the business, there are critical corporate housekeeping and due diligence steps needed to prepare. But it is also a good idea to go through a diligence exercise regularly, to get ahead of issues that may arise and develop a plan to address them.
Dave Clar, leader of the Harris Beach Corporate Practice Group, and John Buhrman, Corporate Practice Group team member, provide an overview of the importance of thorough legal housekeeping and due diligence, the typical triggers that prompt the exercise as well as the numerous and varied elements included.
Having a regular cadence of meetings with your attorney to walk through these components is a great first step. Legal issues uncovered during due diligence can negatively impact valuation, raise concerns for a counterparty or compromise a transaction or business opportunity. Even for issues that cannot be resolved before due diligence, being aware and having an answer ready is better than being caught flat-footed.