Most deals that disappoint were not badly priced. They were badly understood. The buyer paid for a version of the business that existed in a pitch deck, a summary profit figure and a founder’s confidence — and inherited a different one the morning after closing.
The gap between the two is almost always visible before signature. It sits in the filings, the bank confirmations, the tax notices, the customer contracts and the fine print of the agreement itself. It rarely announces itself. It has to be looked for, deliberately and in a set order, while you still have the leverage to walk away or adjust the price.
The checklist below is that order. Thirty confirmations, grouped the way a buy-side team would work through them: who owns it, what it earns, what it owes, what it owes the tax authorities, who it is bound to, and what you are actually signing. Every item is a question a seller should be able to answer with a document — not an assurance.
Part 1 — Ownership and standing
| # | What to confirm | Why it matters |
| 1 | The seller legally owns what they are selling — ownership records match the claim | Verbal ownership stories and the register disagree more often than buyers expect |
| 2 | The entity is in good standing: registrations live, annual filings current, no strike-off or dormancy flags | A non-compliant entity can be expensive to revive and awkward to finance |
| 3 | Constitutional documents and any restrictions on transfer, pre-emption rights or consents needed | One dissenting minority holder can stall or kill a signed deal |
| 4 | The group structure — which entity you are buying, and what quietly sits outside it | Key assets, staff or licences are often parked in a company not included in the sale |
| 5 | Operating licences, permits and approvals, and whether they survive a change of ownership | Some approvals lapse on transfer; the business stops the day you take over |
Part 2 — Financial position and earnings
| # | What to confirm | Why it matters |
| 6 | Which accounts have been independently audited and which are management-prepared | Unreviewed numbers are a starting point for questions, not a basis for price |
| 7 | How much of the profit is recurring, and how much is one-off, non-operating or owner-driven | You are buying future earnings, not last year’s best moment |
| 8 | When revenue is recorded against when the work is delivered and the cash arrives | Aggressive timing can pull tomorrow’s profit into today’s valuation |
| 9 | A normal level of working capital for the business through a full cycle | Set it wrong and you fund a cash hole out of your own pocket after closing |
| 10 | Cash balances confirmed directly by the banks, not taken from the books | Book cash and bank cash are not the same number |
| 11 | Every form of debt: loans, leases, deferred payments, overdue statutory dues | Debt-like items reduce what the equity is worth, item by item |
Part 3 — Liabilities you may inherit
| # | What to confirm | Why it matters |
| 12 | Guarantees, indemnities and claims that are pending rather than provided for | These sit off the balance sheet and land on the new owner |
| 13 | Committed spending: purchase orders, capital projects, minimum contract volumes | Commitments made before you arrive still have to be honoured |
| 14 | Transactions with owners, family and related businesses, and their terms | Below-market arrangements vanish after closing and profit falls with them |
| 15 | Whether provisions for bad debts, warranties and slow inventory are realistic | Under-provisioning is the simplest way to flatter a balance sheet |
| 16 | Personal guarantees given by the sellers to lenders, and how they will be released | Lenders may demand your own guarantee, or call the facility |
| 17 | Insurance cover, claims history and uninsured exposures | An uninsured past event can surface years into your ownership |
Part 4 — Tax
| # | What to confirm | Why it matters |
| 18 | All returns filed on time, and returns reconciled back to the books | Small differences signal larger problems in the underlying records |
| 19 | Open assessments, notices and disputes, with a realistic worst-case number | Tax exposure follows the entity, not the person who created it |
| 20 | Indirect tax registrations, credits claimed and returns matched to reported revenue | Wrongly claimed credits are recovered later, with interest and penalty |
| 21 | Withholding obligations on regular payments — and on the purchase consideration itself | Buyers are frequently the party legally responsible for withholding on the deal |
Part 5 — Contracts, people and disputes
| # | What to confirm | Why it matters |
| 22 | Customer concentration, contract length and change-of-control clauses | The largest customer may have the right to leave the moment you sign |
| 23 | Supplier terms, leases and premises rights, including renewal and notice | Losing the site or a sole supplier removes the business you bought |
| 24 | Live litigation and regulatory matters, with the expected cost and timeline | Disputes settle on their own schedule, usually after closing |
| 25 | Employment terms, unpaid dues, retirement benefit obligations and key-person retention | People are the asset most easily lost between handshake and handover |
| 26 | Who owns the brand, the intellectual property and the customer data, and on what basis | If the IP sits with a founder personally, you have bought the trading, not the value |
Part 6 — Assets, systems and the agreement itself
| # | What to confirm | Why it matters |
| 27 | Physical assets exist, are in working condition and are free of charges | Charged or absent assets are common and easy to verify |
| 28 | Inventory is real, saleable and valued sensibly | Obsolete stock is a cost you pay for twice |
| 29 | Software licences, system ownership and how data is held and protected | Unlicensed systems and weak data practice become your liability at closing |
| 30 | The agreement: price mechanism, escrow or holdback, warranties, indemnities, conditions, and what may change between signing and closing | This is the only document that turns everything above into protection |
Where SRC Chartered Accountants fits
Each line above is work, not reading. SRC Chartered Accountants performs it as a service: financial and tax due diligence, quality of earnings analysis, working capital and debt-like item assessment, statutory and compliance review, valuation support, and advice on how the findings should be reflected in the price, the escrow and the warranties.
We are usually brought in at the point where a buyer has agreed the shape of a deal and wants to know what they are actually buying. That is the right moment — early enough to change the terms, late enough to be worth the cost.
Talk to SRC before you sign, not after.