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3 essential due diligence questions about technology and information

On Behalf of | Sep 15, 2020 | Business Law |

Due diligence checks are one of the best ways to protect your company when buying another business. In today’s market, technology is an increasingly important part of these checks. What questions should your due diligence check answer about a company’s technological investments?

What are the company’s existing assets?

From a company’s existing intellectual property to the investments they have made in specialized software or technological equipment, the technology that a company holds can be one of its most valuable assets. Reviewing these assets allows you to know the value of intangible assets, whether intellectual property has been properly protected and whether you will need to make any upgrades after purchasing the company.

What steps has the company taken to protect those assets?

This review should also include the company’s information security precautions and policies. As All Business notes, it is important to review the steps that this company has taken to protect customer information, intellectual property and other information. Do they have the necessary non-disclosure agreements in place? Do their policies for confidential information offer the protection that the information needs? Have they experienced intellectual property breaches in the past? Proper protection can defend your edge in the market and prevent the need for future litigation.

What technology or information has the company licensed?

If the seller’s company licenses intellectual property created by someone outside the organization, you should review that licensure. How is the business allowed to use that intellectual property? When will the license need to be renewed? Is this product or material the best fit for the direction you want for the business?

By asking questions about the technology and information that a company uses, you can protect your business’s future interests during the mergers and acquisitions process.