What documents should you review when buying a business?

When buying a business, assemble a comprehensive due diligence package. Key documents include balance sheets and financial statements, operating agreements, official organizational documents, inventory catalogues, business tax returns, corporate filings and income statementshttps://www.rbcwealthmanagement.com/en-us/insights/interested-in-buying-a-business-heres-what-you-need-to-know#:~:text=Carefully%20examine%20important%20documents. Review the letter of intent (LOI), contracts, leases, licenses and permitshttps://www.rbcwealthmanagement.com/en-us/insights/interested-in-buying-a-business-heres-what-you-need-to-know#:~:text=,Contracts%2C%20leases%2C%20licenses%20and%20permits. Carefully examine overhead and look for duplicative functions; understanding the company’s accounts receivable and payable helps identify synergies and potential cost savingshttps://www.rbcwealthmanagement.com/en-us/insights/interested-in-buying-a-business-heres-what-you-need-to-know#:~:text=Stern%20adds%20that%20a%20careful,%E2%80%9D. Involve a banker, accountant and attorney early to uncover red flags and negotiate a fair pricehttps://www.rbcwealthmanagement.com/en-us/insights/interested-in-buying-a-business-heres-what-you-need-to-know#:~:text=Assemble%20a%20team%20to%20help,with%20the%20process. Your team should specialise in the industry to properly investigate documents and spot issues such as inaccurate numbers, short track records, falling profits or narrow customer baseshttps://www.rbcwealthmanagement.com/en-us/insights/interested-in-buying-a-business-heres-what-you-need-to-know#:~:text=%E2%80%9CYour%20team%20members%20should%20specialize,narrow%20or%20incomplete%20customer%20base. We guide you through evaluating opportunities and conducting due diligence with a supportive, customer-first approach.