Due Diligence Checklist Template for Nigeria

A Due Diligence Checklist helps Nigerian businesses systematically review and verify important details before making major decisions like mergers, acquisitions, or investments. It acts as a comprehensive guide to examine crucial areas including financial records, legal compliance with Companies and Allied Matters Act (CAMA), tax obligations, and intellectual property rights.

This structured tool protects organizations by uncovering potential risks, liabilities, and compliance gaps early in any transaction. Legal practitioners and business executives in Nigeria use these checklists to ensure thorough investigation of assets, contracts, permits, and regulatory requirements under bodies like the Corporate Affairs Commission (CAC) and Securities Exchange Commission (SEC).

Use a Due Diligence Checklist when planning major business transactions in Nigeria, especially before mergers, acquisitions, or significant investments. It's essential during the early stages of negotiations, before signing binding agreements or transferring funds. The checklist becomes particularly important when dealing with high-value assets, complex corporate structures, or companies with multiple regulatory obligations.

Nigerian businesses need this tool when expanding into new markets, purchasing property, or forming strategic partnerships. It's vital for transactions requiring Corporate Affairs Commission approval, Securities and Exchange Commission clearance, or compliance with the Companies and Allied Matters Act. The checklist proves invaluable during pre-IPO preparations and when evaluating potential joint venture partners.

• Financial Due Diligence Checklist: Focuses on reviewing financial statements, tax compliance, and financial obligations under Nigerian accounting standards
• Legal Due Diligence Checklist: Examines corporate documents, contracts, and compliance with CAMA and other Nigerian regulations
• Operational Due Diligence Checklist: Reviews business operations, licenses, permits, and industry-specific requirements
• HR Due Diligence Checklist: Evaluates employment contracts, pension schemes, and labor law compliance
• Environmental Due Diligence Checklist: Assesses environmental compliance, permits, and potential liabilities under Nigerian environmental laws

• Corporate Lawyers: Lead the due diligence process, draft checklists, and coordinate investigations across different areas
• Investment Bankers: Use checklists during mergers and acquisitions to evaluate target companies and assess financial risks
• Company Directors: Review and approve checklist findings, make informed decisions based on due diligence results
• Compliance Officers: Ensure thorough examination of regulatory requirements and corporate governance standards
• External Auditors: Verify financial information and documentation outlined in the checklist
• Business Consultants: Support specialized aspects of due diligence like market analysis and operational assessment

• Transaction Details: Gather basic information about the deal type, size, and industry sector
• Corporate Documents: Collect CAC certificates, board resolutions, and shareholding structure
• Regulatory Framework: Identify applicable Nigerian laws and sector-specific regulations
• Scope Definition: Outline specific areas requiring investigation based on transaction type
• Timeline Planning: Set realistic deadlines for document collection and review phases
• Team Assignment: Designate responsible parties for each checklist section
• Review Process: Establish clear procedures for documenting findings and raising red flags

• Corporate Structure Review: Verification of CAC registration, shareholding patterns, and board composition
• Financial Assessment: Analysis of audited statements, tax compliance, and financial obligations
• Legal Compliance: Review of licenses, permits, and compliance with CAMA requirements
• Asset Verification: Documentation of owned and leased properties, intellectual property rights
• Contractual Obligations: Analysis of material contracts, employment agreements, loan documents
• Regulatory Compliance: Confirmation of industry-specific requirements and governmental approvals
• Risk Assessment Section: Identification of potential liabilities and mitigation strategies

A Due Diligence Checklist differs significantly from a Due Diligence Report in both purpose and timing. While they work together, each serves a distinct function in Nigerian business transactions.

• Purpose and Structure: The checklist outlines investigation areas and questions to explore, while the report presents findings, analysis, and conclusions from the investigation
• Timing of Use: The checklist comes first as a planning tool, guiding the investigation process. The report follows after completing the due diligence exercise
• Legal Weight: The checklist serves as a procedural guide without legal binding effect, whereas the report becomes a formal document that can have legal implications under Nigerian law
• Content Focus: Checklists contain questions and information requirements, while reports provide detailed answers, risk assessments, and recommendations