Due Diligence for Business Acquisitions in Florida: The Complete 2026 Checklist

Due diligence is the buyer's systematic investigation of a target business before committing to close an acquisition. For buyers in the Tampa Bay market and across Florida, this phase is your one opportunity to verify the seller's representations, surface hidden liabilities, and confirm that the business is what you are paying for. Once you close, you own the problems.

Most business acquisitions that turn out badly - overpaid, unexpected liabilities, revenue that disappeared after closing - trace back to inadequate due diligence. This checklist covers every major category of review for a Florida business acquisition in 2026.

Financial Due Diligence

Financial diligence is the core of any acquisition review. Its goal is to verify that the business earns what the seller says it earns, that the financial statements are accurate, and that the purchase price multiple is justified.

• 3-5 years of federal and Florida state tax returns (business and personal if the business is a pass-through)
• Monthly profit and loss statements for the last 24-36 months
• Current balance sheet and historical balance sheets
• Accounts receivable aging schedule - how old are outstanding invoices?
• Accounts payable aging schedule - are there undisclosed vendor obligations?
• Revenue breakdown by customer - identify concentration risk
• Owner addbacks and adjustments to verify seller's SDE or EBITDA claims
• Bank statements for the last 12-24 months to reconcile against reported revenue
• Any outstanding loans, lines of credit, or equipment financing
• Capital expenditure history - what maintenance spending has been deferred?

Legal and Compliance Review

Legal diligence identifies the obligations, rights, and risks embedded in the target company's legal relationships and compliance history.

• Entity formation documents: Articles of Organization or Incorporation, operating agreement or bylaws, and any amendments
• Ownership records: Membership interest ledger or stock ledger confirming the seller actually owns what they are selling
• All material contracts: Customer contracts, supplier agreements, distribution agreements, software licenses, and service contracts
• Assignment restrictions in contracts: Identify contracts that require counterparty consent to assign to the buyer
• Pending and threatened litigation: Any demand letters, lawsuits, arbitration proceedings, or regulatory investigations
• Florida tax compliance: Florida Department of Revenue clearance for sales tax and reemployment tax; any outstanding assessments or audits
• Federal tax compliance: IRS transcripts, any outstanding assessments, payroll tax filing history
• Business licenses and permits: Verify all state, county, and city licenses are current and transferable
• Regulatory compliance history: OSHA records, DBPR inspection history, health department records, and any regulatory violations or consent orders
• UCC lien search: Run a UCC search with the Florida Secretary of State to identify any security interests in the target's assets that must be released at closing

Operational Assessment

Operational diligence confirms that the business can actually run after the seller leaves and that there are no hidden operational risks that would require unexpected capital investment.

• Key employee identification and retention risk - which employees are critical and what are their retention plans?
• Customer concentration - do the top 5 customers represent more than 30% to 40% of revenue? Would those customers stay after an ownership change?
• Supplier concentration - are there single-source suppliers, and what are the backup options?
• Equipment condition reports or maintenance records
• Technology systems review - what software is in use, what contracts support it, and what are the migration or upgrade requirements?
• Standard operating procedures - are processes documented, or does the business run on the seller's institutional knowledge?
• Current pipeline and backlog - what confirmed future revenue exists at the time of closing?

Intellectual Property Audit

IP diligence is critical for any business where brand, technology, or proprietary processes are value drivers.

• Trademark registrations: Confirm registration status and ownership with the USPTO; identify any pending applications or disputes
• Domain names and social media handles: Verify ownership and that registrations are in the company's name, not the founder's personal accounts
• Software and code ownership: Review contractor IP assignment agreements; identify any open-source components with restrictive licenses
• Patent filings: Confirm any patents or patent applications are owned by the company, not individual inventors
• Trade secrets and confidentiality practices: What measures has the company taken to protect confidential information - NDAs with employees and contractors, access controls, documented policies?
• Third-party IP licenses: What licensed technology does the business depend on, and do those licenses transfer in an acquisition?

Employee and HR Review

• Employee headcount, job titles, compensation, and tenure
• Employment agreements, offer letters, and any non-compete or non-solicitation agreements with employees
• Independent contractor classification review - any misclassification risk?
• Payroll tax compliance history - any outstanding IRS payroll tax deposits?
• Florida reemployment (unemployment) tax filing history
• Benefits programs - health insurance, retirement plans, and any unfunded benefit obligations
• Workers' compensation claims history
• Any pending EEOC charges, FLSA claims, or Department of Labor complaints

Environmental and Real Estate Review

For businesses that occupy physical premises or work with hazardous materials, environmental diligence protects the buyer from inherited cleanup obligations.

• Review the commercial lease - term, renewal options, assignment provisions, and any co-tenancy requirements
• Obtain landlord consent to lease assignment (if required - most commercial leases require it)
• Phase I Environmental Site Assessment for businesses that have used or stored hazardous substances, or for SBA-financed acquisitions of real property
• Florida Department of Environmental Protection records for regulated industries
• Real property title search if any real estate is included in the transaction

Key Red Flags to Watch For

• Revenue is highly concentrated: A single customer representing 50%+ of revenue that may not stay post-closing
• Financial statements do not reconcile to bank statements: Suggests unreported income or inflated expense addbacks
• The seller owns personally what you thought the business owned: Key equipment, domain names, or IP in the seller's personal name
• Undisclosed pending litigation or regulatory investigation
• Key employee has already resigned or plans to leave after the sale
• Licenses or permits cannot be transferred to the buyer and must be reapplied for
• Significant deferred maintenance or capital expenditures the seller has been avoiding
• Contracts contain change-of-control termination rights that major customers can exercise