Ipo Due Diligence Questionnaire

Ipo due diligence questionnaire

– *updated August 30, 2015 –

Issuers are often required to engage in a due diligence review by their audit firms, legal counsel, underwriters and other outside third parties in anticipation of: (1) preparing audited financial statements and annual report; (2) a public or private financing transaction; (3) an initial public offering: (4) a merger or acquisition of the issuer’s business; (5) a significant commercial transaction such as a joint venture; (6) major bank financing; or (7) general risk management.

The due diligence process has several components.

Legal counsel and underwriters will usually start by conducting a business and media database review. They will then search various public records to independently confirm key information and then move on to direct contact with government and industry information sources such as court registries, Canadian Revenue Services, Workman’s Compensation, PPSA, Patent & Trademark Office etc.

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Some of the searches will require written consent from the issuer and may take a few weeks to be returned.

As part of the due diligence process, issuers will be asked to gather and provide a rather long list of documents and detailed written disclosure often referred to as a “due diligence check list”.

Directors, officers and major stockholders will also be asked to complete a detailed background questionnaire.

It can take a considerable amount of time for an issuer to get the required documents and information together forming a due diligence checklist.

It is one of the major stumbling blocks to moving a transaction along at a reasonable pace.

The cost associated with a transaction can also go up considerably when legal counsel is faced with an Easter egg hunt for information and documents delivered in 10 unmarked jumbled boxes with little input from management.

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Paying a lawyer $400 an hour to organize, gather information and identify the missing pieces in a due diligence check list is crazy unless an issuer has deep pockets and no staff on hand getting paid less than $425 an hour to organize things in-house.

Even if a law firm uses a law student or a legal assistant to organize this material for an issuer, they are going to charge $150 an hour for that student or assistant to sort out what would have cost that issuer 1/10th the cost if the work had been done by their own executive assistant or Jerry the temp.

IP Due Diligence Checklist: Everything You Need to Know

Of course, the choice is that of the issuer. Law firms will gladly accommodate the wishes of any client who wishes the law firm to do this type of work for them.

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Just expect to be charged accordingly.

Issuers can get jump on their audit or major transaction by gathering and organizing the material and information normally requested in a due diligence review. The list below is an example of a due diligence checklist which a technology or industrial company would likely receive in connection with a major transaction.

Ipo due diligence questionnaire

Resource companies would have a slightly different list focused on their specific industry. Each item in the list is required to be addressed.

Due Diligence Checklist

If an item is not applicable or the answer is “none” it should be noted in the notes column on the right hand side. Relevant documents referenced in the due diligence list should be flagged with a sticky that corresponds with the item number in the due diligence list.

If an answer requires more room than available in the notes column; a page with the item number at the top should be created  as a schedule and the answer provided in that schedule. Some of our clients like to place their due diligence package in a binder(s).

Business Finances

Other clients use a banker box with folders to keep the various items sorted. Either method is fine.

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What is important is that the information and documents are easy to find. Legal counsel can fine tune the due diligence package once the basics are in place.

An issuer who has a due diligence review package together, whether for audit or other purposes, will find it is relatively easy to update this package moving forward when it is needed for other uses.

Ipo due diligence questionnaire

It is getting the initial due diligence review package together that is time consuming. Issuers who are prepared will find the due diligence process a relatively painless experience with very few if any surprises.

The due diligence checklist below is presented as an example only.

Why Are Intellectual Property Due Diligence Checklists Important?

We  encourage you to contact your own legal counsel before using this checklist . Almost all attorneys and audit firms have their own version of a due diligence checklist. Please feel free, however, to instruct your legal counsel to adapt this form to your own use if you find it useful as a starting point.


Due Diligence Checklist

Please provide us with the documents referred to below for [NAME OF ISSUER] (“[NAME]”) and each of its subsidiaries and predecessors.(Unless the context otherwise requires, all references to the “Issuer” include [NAME] and each of its subsidiaries and predecessors.) Except where a list, schedule or description is requested, please provide us with a copy of the requested agreement, correspondence or other document.

Please do not provide any “privileged” documents; however, please indicate whether any “privileged” documents have been withheld. In addition, you do not need to provide any documents that have been filed on Edgar to the Securities and Exchange Commission (“SEC”) or on SEDAR to various Canadian Securities Regulators by the Issuer, as those documents are deemed to have been provided by you regardless of whether or not you otherwise deliver copies thereof.

Due Diligence Checklist

With respect to any requests below for a copy of an agreement and/or contract, you are not being asked to provide any agreements under which Issuer no longer has any material obligations, rights, or potential liability, as of 01.07.2019 except where we otherwise specifically request any such agreements and/or contracts.

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The articles on this website are not intended to create, and do not create, an attorney-client relationship.

You should not act or rely on information on this website without first seeking the advice of a lawyer. This material is intended for general information purposes only and does not constitute legal advice. You are advised to contact legal counsel prior to undertaking any securities transaction.

Due Diligence Questionnaire

Laws change and there are subtle nuances to the rules that may apply in your particular circumstance.

Alixe Cormick

Alixe Cormick is the founder of Venture Law Corporation in Vancouver, British Columbia and a member of Commercialization Advisory Board of the Life Science Institute at the University of British Columbia, the Advisory Board of the National Crowdfunding Association and two private tech companies.

She is also a member of the Pacific Northwest Keiretsu Forum, an association of accredited private equity angel investors, venture capitalists and corporate/institutional investors, and Vantech Angel Technology Network, a Vancouver angel group.

Ipo due diligence questionnaire

You can reach Alixe by phone at 604-659-9188, by email at [email protected], on twitter @AlixeCormick or on Google+.

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