Glossary · Doing the deal
Legal due diligence
In short
This is the process of thoroughly reviewing all legal aspects of a business, including contracts, permits, intellectual property, and potential litigation. It aims to identify legal risks and liabilities.
What it means in a deal
Your attorney conducts legal due diligence to ensure the business is legally sound, all agreements are transferable, and there are no hidden legal problems. This protects you from inheriting legal disputes or unforeseen obligations post-acquisition.
Related terms
Common questions about Legal due diligence
- How does declining revenue during due diligence impact loan approval?
- What environmental due diligence is mandatory for real estate collateral?
- What if the acquired business has environmental contamination issues discovered during due diligence?
- What if the seller is unwilling to provide sufficient financial documentation during due diligence?
- If key employees resign during due diligence, could this kill the SBA loan approval?
- What due diligence is required for a franchise not on the SBA Franchise Directory?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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