How long does due diligence take?

For a small to mid-sized Texas business, two to six weeks is typical, depending on how organized the seller’s records are and whether the Comptroller needs to audit before issuing tax clearance.

Who pays for due diligence?

The buyer generally bears the cost of investigating the business, including attorney and accountant fees. Sellers invest in “sell-side” preparation — organizing records and resolving issues early — to keep the deal on track and the price firm.

What is the most overlooked check in a Texas deal?

Tax clearance. Buyers focus on the financials and forget that under Section 111.020 they can be on the hook for the seller’s unpaid state taxes. Requesting the Certificate of No Tax Due before closing closes that gap.

Can due diligence change the price?

Yes. Diligence routinely uncovers issues — deferred maintenance, customer concentration, a pending claim — that justify a price adjustment, an escrow holdback, or a specific indemnity in the purchase agreement. Buying or selling a Texas business? Reidel Law Firm runs buyer and seller due diligence and drafts the agreement on a flat fee, with direct attorney access throughout — see how the business sale package works.

TEXAS BUSINESS LAW

Due Diligence for a Texas Business Sale: A Guide

Schuyler 'Rocky' Reidel July 22, 2024 6 min read