July 2026
As the old saying goes, “You only get one chance to make a first impression.” While that is certainly true in a social context, it is also true in a business context, where the stakes are often much higher.
If you are considering a sale of your company, a major debt financing, or seeking outside investment capital, you can be sure that the counterparties will undertake a thorough “due diligence” examination of your company, including the business, financial, and legal matters impacting its business. Two things will shape their response to this due diligence examination: (i) the thoroughness and completeness of the response and (ii) the time it takes the company to deliver its response. To avoid future claims, the company’s response should include the good, the bad, and the ugly. However, if it takes the company an inordinate amount of time to deliver its response, the impression left can have a decidedly negative impact, even if the response reveals few, if any, areas of concern. An unreasonably delayed response raises concerns about the company’s management, internal systems, and controls. Those concerns in turn can impact deal terms and, in extreme cases, may result in a deal not going forward.
If your company is considering a sale, debt or equity financing, it is imperative that you are prepared to make a good first impression. This will involve a detailed internal review of items likely to be included in the counterparty’s due diligence requests. Have all your annual reports have been filed, thereby ensuring you are in legal existence and good standing? Have you qualified to do business everywhere you have an office, have employees conducting business, or have tangible personal property? Do you have complete, fully signed copies of all material contracts? Are your service providers properly treated as employees or independent contractors? If necessary, have all service providers signed confidentiality and assignment of invention agreements? Are there any tax audits or pending litigation?
We would be happy to provide a complimentary due diligence checklist to help your company prepare for a planned transaction so you can make a good first impression. Please contact Bill Miller at the Business Law Group, wmiller@bizlawma.com.
This memorandum is intended to provide general information of potential interest to clients and others. It does not constitute legal advice. The receipt of this memorandum by any party who is not a current client of the Business Law Group does not create an attorney-client relationship between the recipient and the firm. Under certain circumstances, this memorandum may constitute advertising under the Rules of the Massachusetts Supreme Judicial Court and the bar associations of other states.