Investing in a Business? Due Diligence is Your First Investment

In the world of business due diligence is a must. The most obvious reason for performing due diligence is to avoid bad business transactions. What many investors don’t know is that due diligence can also protect them from numerous unexpected legal liabilities. All American Documents Services performs thorough research covering financial, legal, and property related liabilities.

Business Due Diligence

Failure to perform due diligence can have severe consequences in business acquisitions, business investments, and business lending. By performing comprehensive due diligence prior to buying a business, the purchaser is:

Evaluating the strengths and weaknesses of the target business to determine if it is worth the investment

Identifying critical obligations and liabilities that must be discussed prior to acquiring the business

Bringing unidentified and unseen risks (like environmental violations, court judgments, etc.) to light

Indemnification vs. Due Diligence

Purchasers and investors should acquire carefully drafted purchase or loan agreements that include favorable warranties and indemnifications, but it’s important to remember that these provisions do not take the place of proper due diligence. Indemnification is only worth as much as the value of the indemnifying party. If they lack a valid title to certain assets involved in the transaction—including real property—then indemnification will fall far short of being a curative solution.

Complete and Total Due Diligence

All American Document Services helps lenders, investors, and business owners perform comprehensive due diligence on businesses, individuals, and properties. If you’re involved in a business transaction, All American Document Services can give you a complete picture of the asset side and the legal liability side of the seller. We ensure due diligence with accurate and timely on-site searches and retrieval of business, real property, tax, and legal documents. Our searches include current owner searches, commercial searches, bankruptcy, civil and criminal records, UCC judgments, and mechanics liens.

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