Due Diligence Report – Real Estate and IP – proving your net worth

posted in Compliance Management, Contract Management, Entity Management, General Counsel, How-to, Reporting

Think you could turn around a prompt and thorough due diligence report verifying your company’s net worth if a potential investor or buyer came along?

It is estimated that every year 7.5% of all company documents are lost and 3% are misfiled at a huge aggregate cost to businesses to locate or recreate these files. Not to mention that failure to provide complete information could cost your company the deal. So don’t let this be you!

A large part of proving your company’s net worth includes real estate, assets and all intellectual property and this needs to be chronological, up-to-date and accurate. As a CEO, CFO or Legal Counsel, you might have most of this information on hand, but it doesn’t hurt to consolidate what you do have and areas you may need to address.

Proving Net Worth of a Company

Real Estate for Due Diligence

How quickly could you provide the below items related to the real estate and assets held by your company and its subsidiaries?

  • Summary of real estate assets owned or leased, including expiration and material terms
  • Copies of all agreements concerning purchase or lease of real estate assets, including documentation regarding mortgages and tax appraisals
  • Summary of equipment owned or leased and the expiration date and material terms
  • Copies of all material agreements concerning the management and/or operation of properties or facilities, including joint venture or partnership agreements.

 

Intellectual Property for Due Diligence

Related to the IP of the company and its subsidiaries, here is some of what you may need to provide. Are they easily accessible to you?

  • A schedule of all material patents, patent application, trademarks, service marks, trade names, brands, designs and copyrights and any license agreement relating to any of the foregoing and any pending applications relating to such assets.
  • Any licenses or agreements of any kind with respect to the company’s or others’ patent, copyright, trade secret or other proprietary rights, proprietary information or technology

While Real Estate and IP are both crucial for estimating your company’s net worth, other types of assets such as cash, investments, accounts receivable and inventory will help paint the full picture. Find out more in our post: Due Diligence Reporting – commercial records, contracts, claims and compliance.

Many legal counsels are turning to legal software like effacts to aid them through the due diligence process. Being able to track and easily locate meta data like contract values, business registration, addresses, dates of acquisition, expiration dates helps them perform better at their daily job and dedicate more time to strategic matters. What’s more, data is cross-referenced so teams can compile, present and share the information quickly and securely, making the company more attractive to a potential investor.

For more information about Due Diligence, including a checklist to assess your readiness, download our free Beginner’s Guide to Due Diligence.

 

Due diligence checklist - proving net worth