Record company details

The first thing you want to do when investigating stocks to purchase is to record the details of the company you are examining. Do so by filling out the form fields below.

Organization and Good Standing:

Copies of Company's Articles of Incorporation and Amendments

This includes the following:

  • 1
    Corporation's Name and Address
  • 2
    Corporate Objectives
  • 3
    Corporation's Registered Agent
  • 4
    Stock Information (authorized number of shares, issued number of shares designation of classes of shares and value of each share)
  • 5
     Incorporators and signatories of the articles of incorporation and the board of directors

Copies of Company's By-Laws and Amendments

This includes:

  • 1
    Time and place of shareholder and director meetings. 
  • 2
    Name and Address of the Company's Shareholders and directors and the procedures used in safekeeping of corporate records. 
  • 3
    Corporate Powers granted upon Company's Officers Directors and Shareholders.
  • 4
    The number of directors in the board of directors and their term length.

Documents on Pending and Threatened Litigation

Lawsuit Documents on Pending and Threatened Litigation should be reviewed carefully in order to assess their legal implications on the business operation.

Table of Organization:

Reports on Current Employment Status of Employees and Officers of the company

Report on their current employment status should be carefully reviewed in order to find out its implications should retrenchment be pursued in cases of management takeover.

Reports on Recent and Pending on promotions and demotions

Changes in employee ranking should be carefully studied to determine its impact on succession planning in case of management takeover.

Reports on Current Rankings from Rank & File up to Managerial positions

Current rankings are one of the important considerations to be reviewed because of its implications on separation pay before a new management will take over the business.

Reports on Job Rotation and Upgrading Programs

The current job rotation and upgrading programs could be used for reference when changes in management occur.

Reports on Under-utilized and Redundant Workforce

Reports on underutilized and redundant workforce could be used as one of the basis for any planned workforce reduction.

Reports on Service Pay and Productivity Incentives

Reports on service pay and productivity incentives could be used as one of the reference-points when negotiations takes place as soon as a new management assumes power.

Reports on Successions and Retrenchment Plans

Current succession and retrenchment plans are one of the considerations that could be used in case a downsizing of employees would be decided upon by the new management.

Reports on Shareholders and their Shareholdings:

Names, Current addresses and Contact Information of these Stockholders

It is very important to be able to identify and communicate with shareholders who are willing to sell their shareholdings to a prospective investor.

Shares of Stocks documents

Access to shares of stocks documents is an important consideration in planning an acquisition, in order to find out which group of shareholders should be given the most attention in the negotiations.

Attendance Sheets on Annual Stockholders' Meeting

Knowing who are the most active stockholders in annual meetings is a very important piece of information when considering an acquisition. Negotiating with them plays a crucial role in the success of a management takeover.

Cash and stock dividends forms

Examining cash and stock dividend documents could be one of the deciding factor in acquisition because dividend pay-outs could either encourage or discourage investors from taking over the business.

Documents on Agreements on Options, Warrants, Subscriptions and Convertible Securities

An investor should have a good grasp of these contracts before making a decision on an acquisition because they reveal the benefits or risks that apparently could not be seen without conducting an in-depth investigation.

Documents on Leased or Owned Properties:

Property Valuations Forms

Property valuations could be one of the major considerations that could play a crucial role in an acquisition; over-valuation or under-valuation of properties could encourage or discourage an investor to take over the business.

Mortgages Reports from the company's creditor banks

Discussing with creditor banks about the company's mortgages could spell the difference between success and failure in an acquisition. It could reveal otherwise undisclosed indebtedness of the business.

Financial Information:

Due Diligence examines the financial information by checking and verifying the accuracy of comparative audited financial statements, including attached documents such as assets / debt-equity securities valuation forms, comparative audited statements of stockholders' equity.

Copies of Audited Balance Sheets for the last three years

Review copies of comparative audited balance sheets in order to determine the latest valuations of assets-debt-equity portfolios of the business concern.

Stock purchase of a business concern depends upon the assets-debt-equity valuations.

Copies of Assets Valuation Forms

Review copies of assets valuation forms in order to determine the fair market values of the asset holdings of the business concern.

Copies of Audited Statement of Stockholders Equity for the last three years

Review copies of audited statement of stockholders' equity for the last three years in order to determine its core components such as common stock, preferred stock, treasury shares, dividends paid in cash or in stock.

These items serve as reference in acquiring a business through stock purchase.

Copies of Debt-Equity Securities Valuation Forms

Review copies of debt-equity securities valuation forms in order to explore the debt-equity swap mechanism of the stock purchase.

Every dollar of debt paid, via the issuance of commercial paper in the debt market through the banking community, can be converted into equity or a percentage stake or controlling interest in the business concern.

Intellectual Properties:

Patents Clearance Documents

Reviewing patents makes a lot of business sense when an investor would like to size up the intangibles of the business because it could disclose potential benefits that would bring it more revenues in the coming years.

Trade Secret Documents

Access to trade secret documents could be a game-changer in an investing decision because it could give business insight to the investor in terms of long-term growth and profitability.

Contracts, Permits Licenses and Environmental/Safety Issues:

Copies of Permanent Employee/Contractual Employee Agreements

Reviewing employee contracts is vital in conducting due diligence as it discloses the aggregate costs of labor-related expenses to the investor. Management takeover could take place or not depending on high or how low the total labor expenditure compared to the total revenues of the business.

Copies of Renewable Services/Supply Contracts

Renewable contracts on supply and services could give the investor a good perspective on the outsourcing activities of the business. Higher costs of outsourcing activities would discourage business takeover.

Copies of Agreements on Subsidiary and Joint Ventures and Partnerships

Getting hold of copies of these major contracts are usually advisable when conducting due diligence on big business under which subsidiaries and affiliates are operating. An acquisition may not occur if the core business is being undermined by the operations of its subsidiaries and affiliates.

Copies of Promissory Notes, Loan Agreements and Credit Lines

Obtaining copies of such contracts enables the investor to take a good look over the debt management policies of the business. The investors will use this information whether the business concern is heavily indebted to creditors.

Copies of Mortgages, Collateral Pledges, Security Agreements and Indentures

It gives the investor a bird's eye view of the debt management direction of the business. More mortgages and collateral pledges implies that the business is heavily relying on creditors to finance its operations. This would discourage management takeover.

Copies of Governmental Licenses, Permits and Regulations

Knowing the scope & limitations of these licenses/permits and regulations could help the investor in planning an acquisition. The prospective investor would know if business efficiency is improved or not due to these licenses/permits and other regulatory practices.

Copies of Non-Government Regulatory Agencies

Industry associations have regulations that makes business more effective in attaining long-term growth. This would encourage an acquisition.

Copies of Environmental Audits of Company's Properties

An investor would like to know if the business properties are compliant with environmental regulations. No business takeover would take place if these properties are not environment-friendly.

Copies of Employee Safety and Hazards Reports and Employee Work-related Accidents Reports

The prospective investor would not take over the business if work-related accidents are too frequent in the workplace. Poor safety standards discourages management takeover.

Copies of Materials Safety Data Sheet (MSDS)

Business takeover on a manufacturing business would not happen if their raw materials/supplies do not have materials safety data sheet because it is an indication that they have sub-standard safety regulations. It poses health risks to its workers and bring more harm to the environment.

Taxes & Insurances:

Copies of Tax Declarations Documents

Tax declarations could be intentionally done with the connivance of tax authorities. Authenticity of such declaration is important to the prospective buyer otherwise the planned acquisition would become a fraudulent act.

Life and Non-Life Insurance Coverage

It is very important to review the insurance coverage of a business because the prospective investor would want to know if its employees and operations are adequately protected against actual and potential risks. Non-life insurance coverage includes fire insurance, accident insurance, etc..

Real Property Insurance

An investor would want to take over a business if its property, plant and equipment are sufficiently protected against risks. If the business takes seriously its risk management obligations, chances are, investors would want to take over such business.

Product Lines or Services:

Copies of Product Lines and Services Reports

Reviewing the product lines and services of a business concern should be undertaken in order to determine if these lines of business are adequately supported with local distributors/dealership contracts along with agreements from principals for indent orders transactions in order for such business concern to provide product and service warranties, improving its after-sales services and product support offerings.

Copies of Professional Services Contracts

Reviewing the professional services contracts of a business concern is very important in a planned business acquisition because the investor needs to know if these outsourced professional services such as accounting, legal and technical services are contributing to the long-term growth of the business or not.

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