Final Due Diligence: What to Verify Before You Sign the Purchase Agreement

Once a letter of intent (LOI) is signed, diligence shifts from checking whether the deal is worth pursuing to checking whether it's safe to actually close. A quality of earnings (QoE) report covers the financial side of that work. Final due diligence covers everything else: the legal, operational, and account-level details that don't show up in a profit and loss statement but can still sink a deal or leave you exposed after closing.

What final due diligence actually covers

• Legal and corporate structure. Confirming the seller actually owns what they're selling, that the business entity is in good standing, and that there are no liens, judgments, or pending lawsuits attached to it. This is also where you confirm which deal structure you're actually closing. An asset purchase buys specific assets and leaves the seller's legal entity, and its liabilities, behind. An entity (or equity) purchase buys the legal entity itself, including its liabilities. Most small online business deals, Amazon FBA stores, Shopify stores, and content sites, close as asset purchases, since a buyer typically wants the website, inventory, and customer list without inheriting whatever the seller's LLC was on the hook for. An entity purchase shows up more often when a platform account or contract can't legally be reassigned to a new owner, so keeping the original entity intact is the only way to retain it. For an asset purchase, confirm exactly which assets and liabilities transfer and which stay with the seller.
• Contracts and agreements. Supplier agreements, affiliate agreements, software licenses, and any contractor or employee agreements, checked for change-of-control clauses that could let a counterparty terminate or renegotiate once ownership changes.
• Platform and account transferability. Whether the Amazon seller account, ad accounts, payment processor, domain registrar, and hosting provider actually allow ownership transfer, and what each platform requires to do it without disrupting the account's history or standing.
• Intellectual property. Confirming the seller actually holds the trademark, domain, and any custom code or content they're selling, rather than licensing it from someone else.
• Employee and contractor status. Who's on payroll versus contract, whether any key person is planning to leave at closing, and what it would take to retain the people the business actually depends on.
• Insurance and liabilities. Whether the business carries the coverage it should, and what liabilities (warranty claims, refund obligations, unresolved chargebacks) could follow the business past closing.

Who does this work

A transactional attorney typically handles the legal and contract review, and for an SBA-financed deal, the lender's own underwriting requires much of this documentation anyway. For a small online business acquisition, a buyer often does the platform and account verification themselves, since no outside professional knows the specific quirks of an Amazon account or a Shopify store better than a hands-on buyer willing to log in and check.

The asset purchase agreement (APA) itself doesn't always need to be written from scratch. Brokered marketplaces like Empire Flippers and Flippa provide their own standard APA template as part of the sale process, and most deals just add or adjust a handful of clauses on top of it rather than drafting one from nothing. For an off-market deal with no broker involved, a buyer sometimes drafts the APA themselves using a template, or brings in a lawyer to draft or review it. For a small acquisition, a lawyer's fee to draft a custom APA often isn't worth it when a broker's template or a solid generic template covers the deal, though it's still worth having a lawyer at least review whatever version you end up signing.

Red flags that come up at this stage

• A contract with a change-of-control clause that lets a key supplier or affiliate partner walk away or renegotiate the moment the business changes hands.
• A platform account that can't be transferred cleanly, only recreated, which can mean losing years of sales history, reviews, or search ranking in the process.
• Undisclosed liabilities, like an unresolved dispute with a customer or platform that didn't show up in the financials but shows up in a contract or account history.
• A seller who resists giving direct account access for verification, even under a signed non-disclosure agreement, which is a reason to slow down rather than push through.

What happens with what you find

Findings from final due diligence feed the same negotiation that quality of earnings findings do. A contract that doesn't transfer cleanly, or a liability the seller didn't disclose, is a legitimate basis to adjust price, request a holdback, or ask for specific representations and warranties in the purchase agreement that put the risk back on the seller if it turns out to be worse than disclosed.

Next: once final due diligence and any resulting negotiation are settled, the APA gets signed, and transfer execution is where the business actually changes hands.