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Due diligence is a prerequisite for any business purchase and sale transaction in Florida. There’s simply too much at stake not to take the time to thoroughly vet each area of the business you’re about to invest significant capital into. But just how long does due diligence take? The answer will depend on the scope and complexity of the transaction, but typically the process can take a few weeks to a few months. Here are some variables that can influence the timeline.
- Business complexity – The more complex the business operations, financials and legal structure, the longer due diligence typically takes. For example, a business with multiple subsidiaries, diverse revenue streams or complex intellectual property may require a more thorough investigation.
- Scope of due diligence – The scope of due diligence can vary based on the buyer’s requirements and the nature of the business. Conducting extensive financial, legal, operational, HR and environmental due diligence can take more time relative to a limited review.
- Availability of information – Things move faster when sellers are organized and have documentation readily accessible. Similarly, when buyers have available staff, advisors and other resources to assist with due diligence, the timeline may also be expedited.
- The need for third-party approvals – If there’s a need to obtain third-party approvals, such as regulatory clearances or consents from landlords, suppliers or key customers, this may slow down the due diligence process
These and other variables including the negotiation process between the buyer and seller can affect the due diligence timeline. Partnering with an experienced attorney can help ensure due diligence is thorough yet timely, so you can enter into the transaction with confidence knowing you have a clear understanding of the value and risks associated with the business.
If your company seeks to purchase or sell a business in Florida, let our team help you navigate the process. At Sirulnik Law, we’ve managed and negotiated a broad range of transactions, from relatively small private transactions to complex companies involving multi-state-based assets. We provide services from the early pre-due diligence stage through to transaction closing. Contact our team today to learn more about how we can help you.