Due diligence is the phase of a business sale where deals are won or lost. A buyer who receives a complete, well-organised due diligence package moves faster, offers more confidently, and chips the price less. A seller who cannot produce basic documents on request signals disorganisation — and buyers price that risk directly into their offer.
This is the complete checklist of what buyers will ask for when purchasing an Australian business. Not every item applies to every business, but you should be able to produce everything on this list before you go to market.
Financial documents
- Tax returns for the past three financial years (business and, for sole traders, personal)
- Profit and loss statements for the past three years — prepared by your accountant
- Balance sheets for the past three years
- BAS lodgements for the past two years
- Current year management accounts (year-to-date P&L)
- Aged debtors and creditors reports
- Bank statements for the past 12 months
- Details of any loans, finance facilities, or equipment leases
- Payroll records and superannuation compliance documentation
Legal and compliance documents
- Business registration documents (ABN, ACN, business name registration)
- Lease agreement — current lease, all options, any side letters or variations
- Licences and permits relevant to the business (liquor licence, food safety, trade licences)
- Franchise agreement (if applicable)
- Insurance policies — public liability, professional indemnity, workers compensation
- Any outstanding litigation, disputes, or regulatory matters
- Workers compensation claims history
Operational documents
- List of all employees — names, roles, employment type (full-time, part-time, casual), tenure, and remuneration
- Employment contracts for key staff
- Supplier agreements and key supplier contacts
- Customer contracts or service agreements
- Revenue breakdown by customer (top 10 customers, revenue concentration)
- Asset register — plant, equipment, vehicles, fit-out
- Inventory valuation (if stock is included in the sale)
- IT systems and software licences
- Operations manual or documented procedures (if they exist)
What buyers look for in the documents
Buyers are not just checking that the documents exist — they are looking for specific things. In the financials, they are looking for consistency between the tax returns, the P&L, and the BAS lodgements. Unexplained discrepancies between these three sources are a red flag. In the lease, they are looking for remaining term and options — a lease with less than two years remaining and no option is a serious problem. In the employee list, they are looking for key-person risk — if one or two people are critical to the business and their employment is not secured, that is a risk buyers will price in.
Preparing before you go to market
The best time to prepare your due diligence documents is before you engage a broker — not after a buyer has signed an NDA and is waiting for information. A seller who can produce a complete due diligence package within 48 hours of a request signals professionalism and gives buyers confidence. A seller who takes three weeks to find their lease agreement signals the opposite.
Your accountant can help you prepare the financial documents. Your solicitor can help you locate and review the legal documents. Your broker will tell you what the specific buyer pool for your business will focus on — and that focus varies by sector.
