When procuring documents on corporate law, take advantage of the many online services. Articles of association, amendments to the articles of association, extracts from the commercial register and incorporation documents are often just a few clicks away.

Digital copies of credit, leasing or mortgage agreements can be obtained directly from your bank advisor. The bank usually provides regular account or custody account statements via E-Banking. You can easily download these documents and store them in a structured way. If you have any questions or need more information, the UBS team will be glad to help you.

When it comes to tax matters and duty of retention, the tax authorities or your fiduciary are the best people to contact.

Provision of contracts depends on the type of contract. In particular, the focus is on the question of whether your company itself or another institution has drawn up the contract. If a contract is drawn up by your company, your company should also provide it. One example is the employment contract. If a contract is drawn up by your contractual partner, you will receive the associated documents from them. An example of this is contracts with suppliers.

You can request all the necessary documents from your insurance company or have them procured by the insurance broker.

Every company is different. That's why an M&A advisor is the best point of contact when it comes to the question of which documents are relevant for your company’s due diligence.

Company sale

Due diligence: how you can be best prepared

Q: Employees, social security, pension fund

You can order the digital delivery of current AHV documents as well as documents on pension fund solutions and information directly from the respective institution.

We explain how you as a seller can prepare professionally for the due diligence review.

28 Apr 2023 7 min read

Key points at a glance:

The company audit (due diligence) should be prepared before the sale of the company.
Prepare for a due diligence review by gathering all relevant documents in advance and filing them digitally in a well-structured manner.
Get professional support in the form of M&A advice during the company valuation and sale.

Due diligence – the technical term for a company audit – is probably one of the more complex phases in a sales process. It takes a lot of work to prepare all the data in advance so that potential buyers can view it later. However, the benefits that come with due diligence more than make up for this effort in the end. With a due diligence review, you offer your buyers maximum transparency, the best possible comfort and minimize their risk – which can have a positive influence on the purchasing decision and the design of the purchase contract.

Through early preparation and an accurate analysis, you as a seller ensure that any risks are detected at the preparation stage rather than during the examination by potential buyers. Complete and coherent data strengthens trust with your negotiating partner. Those who adequately prepare for the due diligence have the best prospects of a satisfactory result for both parties. The following five tips tell you what is important when preparing for due diligence.

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1. Get all required documents together in advance

Since due diligence is a time-consuming and labor-intensive process, it is advisable to start with the following before initiating the actual sale process

collection,
systematic filing,
analysis
and checking of the documents.

This gives you the certainty that you will be able to provide internal resources for the due diligence process in the long term. In order not to put additional strain on your already packed schedule, you should delegate less complex but time-consuming work. For example, an apprentice or an intern who takes care of the complete digitization of business-relevant files can be a great help.

Digitization of your filing does not just offer you immense benefits for an upcoming due diligence review. It also prepares your company well for the future. It therefore makes sense to transform the due diligence process into a complete internal digitization project. Involve different employees and define when they will work on the project.

Quick tip: If you combine the joint work on the due diligence project with regular get-togethers, you will not only advance the digitization of your documents, but also strengthen your team.

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2. Use external providers when preparing the documents

During the due diligence process, sellers of a company are sometimes required to provide documents that are not readily to hand. If you find that you are missing an important document in your filing cabinet, you must contact the authorities, partners or other companies that are subject to the corresponding duty of retention.

We’ve put together the most important contact points for you:

Corporate law

Bank documents

Taxes

Important contracts

Provision of contracts depends on the type of contract. In particular, the focus is on the question of whether your company itself or another institution has drawn up the contract.

If a contract is drawn up by your company, your company should also provide it. One example is the employment contract.
If a contract is drawn up by your contractual partner, you will receive the associated documents from them. An example of this is contracts with suppliers.

Properties

Official documents such as extracts from the land register and, in some cases, purchase and sale contracts are provided by the land registry office or notary's offices. For the procurement of “unofficial” documents such as construction plans, floor plans or market value estimates, you can contact the relevant architects, construction companies, real estate fiduciaries or real estate appraisers.

Employees, social security, pension fund

Insurance

Additional documents

3. Ensure structured digital filing of documents

Prepare early by making a digital copy of the signed copies when concluding new contracts. This applies to all types of contracts: with employees, internet providers, banks, insurance companies or other business partners. Once or twice a year, check the e-contracts to make sure they are up-to-date, and move those whose validity has expired to an archive folder.

When preparing for due diligence, there is no way around a complete, up-to-date and digital filing system. This ensures that you have all your documents at hand quickly and clearly for any checks or analyses. Two extra tips will make the procedure even easier:

Ask your fiduciary to provide you with the complete accounting documents in Excel and as a PDF file. The effort required for the digital filing of these documents is about 30 minutes per year. However, this measure gives you the opportunity to gain a complete overview at any time.
Attend regular training courses from your software provider to develop your skills in using your financial accounting, HR management or inventory management software. As a result, you will be able to use the tools efficiently and quickly access the information you need for due diligence.

4. Keep records beyond the legally required period

In your day-to-day business, the deadlines and duty of retention are based on the provisions of the Swiss Code of Obligations. This applies, for example, to the creation of minutes for meetings of the general assembly or board of directors.

However, it may be useful to retain certain information beyond the legally required period in connection with due diligence. In this way, you not only minimize the risks during the due diligence process, but also signal maximum transparency as a seller. A good example of this is the auditing of financial statements. Audited financial statements are valued much more highly by potential buyers than those that have not been audited.

5. Don’t just rely on checklists

There are many due diligence checklists on the internet that give you a sense of what documents to provide as part of a due diligence review. These lists provide a good orientation and offer an initial overview of the upcoming work to be done. However, they do not take into account the particularities of your company. The requirements for documentation depend on the type of company, industry, market environment and business model. It is therefore best to get advice from an M&A advisor at an early stage. This person will support you throughout the process of the company valuation and sale.

As due diligence approaches, it is advisable to bring additional advisors – such as trustees or lawyers – on board. They have the necessary expertise, support you in providing the required documents in a timely manner and make the entire due diligence process run much more smoothly.

Jürg Tauss

Transaction Manager M&A

Jürg Tauss has been active in M&A and corporate finance for over 20 years. In this time, he has supported numerous company owners and financial investors in the context of corporate transactions (acquisitions, sales and mergers). In his role at UBS, he is also responsible for the topic of corporate valuation.

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