Due Diligence Checklist Template for South Africa

A Due Diligence Checklist helps businesses and legal teams systematically investigate potential deals or investments in South Africa. It's a comprehensive tool that outlines key areas to examine - from financial records and compliance with the Companies Act to BEE certification status and environmental permits.

Legal professionals, business owners, and investors use these checklists to spot risks, verify claims, and ensure transactions meet local regulatory requirements. The checklist typically covers labor laws, SARS compliance, property titles, and other essential elements that could impact business decisions under South African law. It serves as both a roadmap and a record of the investigation process.

Use a Due Diligence Checklist when planning major business transactions in South Africa - especially during mergers, acquisitions, or significant investments. It's essential before signing binding agreements, taking on new business partners, or purchasing commercial property. The checklist becomes your safeguard against hidden liabilities and compliance issues.

This tool proves particularly valuable when dealing with complex regulatory requirements, such as BEE verification, Competition Commission approvals, or SARS clearances. Many legal teams start the checklist process at least three months before target completion dates, allowing time to address any discovered issues under the Companies Act or other relevant legislation.

• Financial Due Diligence Checklist: Focuses on company accounts, tax compliance, and financial obligations under SARS regulations
• Legal Due Diligence Checklist: Covers regulatory compliance, contracts, and litigation risks under South African law
• Operational Due Diligence Checklist: Examines business processes, assets, and operational licenses
• BEE Due Diligence Checklist: Specifically reviews Black Economic Empowerment status and compliance
• Environmental Due Diligence Checklist: Assesses environmental permits, compliance with regulations, and potential liabilities

• Legal Teams: Draft and customize the checklist based on transaction type and client needs, often leading the due diligence process
• Corporate Executives: Review findings, make decisions based on identified risks, and ensure compliance with Companies Act requirements
• Investment Firms: Use checklists when evaluating potential acquisitions or investments in South African companies
• Compliance Officers: Verify regulatory requirements, BEE status, and maintain documentation of the investigation process
• External Auditors: Assist in verifying financial information and compliance with SARS regulations during the due diligence process

• Define Scope: Identify the transaction type and specific areas requiring investigation under South African law
• Gather Documents: Collect company registration, financial statements, tax records, and BEE certificates
• Review Regulations: Check relevant legislation, including Companies Act requirements and industry-specific regulations
• Customize Template: Adapt our platform's legally-sound checklist template to your specific transaction needs
• Set Timelines: Create realistic deadlines for document collection, review, and verification processes
• Assign Roles: Determine who will handle each aspect of the due diligence investigation and reporting

• Company Information: Legal entity details, registration numbers, and shareholding structure as per CIPC requirements
• Financial Review: Sections covering financial statements, tax compliance, and SARS documentation
• Legal Compliance: Areas examining licenses, permits, and adherence to Companies Act regulations
• BEE Status: Verification of BEE certification and compliance documentation
• Asset Register: Comprehensive list of company assets, property titles, and intellectual property
• Employment Section: Review of labor law compliance, employment contracts, and workplace policies
• Signature Block: Clear identification of parties conducting and reviewing the due diligence process

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

• Purpose and Format: The checklist guides the investigation process with specific items to examine, while the report presents findings, analysis, and recommendations based on that investigation
• Timing of Use: The checklist comes first as a planning and investigation tool, while the report follows as the formal documentation of findings
• Legal Weight: The checklist serves as a procedural guide without direct legal implications, whereas the report becomes a formal document that can impact legal decisions and transaction outcomes
• Content Structure: Checklists use simple yes/no or completion status formats, while reports provide detailed narratives, risk assessments, and supporting documentation