LEGAL DUE DILIGENCE CHECKLIST

1. Is the company organized as a corporation?

2. Is the company legally registered to do business in the relevant jurisdictions?

1. Are customer contracts legally sufficient and enforceable?

2. Do customer contracts limit the liability of the company in relation to customer or third-party damages?

3. Do customer contracts contain "act of God" clauses to exempt the company from performance agreements when events occur that are beyond the company's control?

1. Is the company's operations in compliance with environmental laws and regulations?

2. Are there any outstanding environmental law suits or court rulings involving the company?

3. Is a system for documenting environment protection compliance in place at the company?

1. Are the company's financial reports audited by an independent CPA?

2. Does the company's financial position (capital structure, debt ratio, liquidity, and so forth) meet investment requirements?

4. Is the company's earning potential sufficient to meet investment criteria?

1. Are the company's HRM procedures in writing?

2. Is the company in compliance with all federal, state, and local human resource laws and regulations?

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ts exist for which the company is or could become liable for the payment of damages or fines. Further, it is important that the company have in place a system that documents environmental compliance should it ever become necessary for the company to defend itself against environmentally-related charges. Financial Position and Performance For the protection of a venture capital firm, it is essential that the financial reports of a company targeted for possible investment be audited by a licensed, certified, independent public accounting firm. Audited financial reports provide a basis for assumptions of validity and reliability in relation to such records. The financial position and the financial performance of a company targeted for potential investment must meet the minimum financial standards established by the venture capital firm for such investments. If the company's financial position does not meet the venture capital firm's investment criteria, there exists an immediate risk to the integrity of any investment in the target company. If the company's current financial performance and future potential do not meet the venture capital firm's criteria for investment, there is a risk that the company's opportunity cost of in
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Approximate Word count = 1583
Approximate Pages = 6 (250 words per page)

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