Due diligence services for buying a small business: what to search first and what to ask
By Grig Kochedykov · . Legal points and fees reviewed against the official sources listed below on 27 October 2026.
A paid due diligence check on a small business should answer three questions, each from a named and dated source: who has the right to sell it, which debts can follow it to you, and whether the lease and the permits pass to you. Before you pay anyone, run the searches the government registers offer. Then ask the provider the five questions below.
General information, not legal or tax advice. Rules differ by country, state and contract.
What you are paying for
Due diligence means checking, before you commit, what you are really buying. For a small business the work has two parts.
The first part is searching: the company register, the records of loans against the equipment, the court and insolvency records. Much of this you can do yourself.
The second part is reading those results against the rules of the place where the business is. Which of the seller's debts pass to a buyer there? Does the lease go with the business, or does the landlord decide? Does the permit belong to the premises or to the person? A register search does not answer these questions. This reading is the part a service should sell you.
The full list of what to look at, with the papers to ask for, is in our due diligence guide.
What you can search yourself, before you pay anyone
Four examples from official sources, opened on 27 October 2026:
- UK companies. Companies House gives some details about a company for free: its officers, its charges (loans recorded against its assets), previous names and insolvency information (GOV.UK).
- Personal insolvency in England and Wales. You can search the Individual Insolvency Register by name or by trading name. Records are usually removed within 3 months of a case ending, so an older bankruptcy of the person selling may not show (GOV.UK).
- Loans against equipment in the US. Search the state where the company was formed, not only the state where the shop is. The Uniform Commercial Code says that a registered organization, such as a corporation or an LLC, organized under the law of a state "is located in that State" (UCC 9-307(e)).
- US federal court records. PACER charges $0.10 per page. A case document, such as a docket or a court order, costs no more than $3, but search results have no cap. If you spend $30 or less in a quarter, the fees are waived (PACER). It holds federal bankruptcy cases and federal lawsuits, so search the company and the owner by name. State and county courts keep their own records.
Write down what each search showed and the date you ran it. A result without a date is hard to use later, in a letter to the seller or in a talk with your lawyer.
Where your own search stops: one debt, three rules
Which of the seller's debts can pass to a buyer is set by local law. Here is one debt, the seller's unpaid tax, in three places:
| Where | What can pass to the buyer | What limits it | Source |
|---|---|---|---|
| Florida, US | A buyer of more than 50 percent of a business, its assets or its stock of goods is liable for the seller's unpaid tax from running that business, such as sales tax (corporate income tax is excluded), up to a cap set in the statute | A receipt or certificate of compliance from the state's tax department showing the seller has no notice of audit, filed all returns and paid the tax shown on them, and no insiders in common between seller and buyer; or an audit in which the department finds the seller not liable | Florida Statutes 213.758(4) and (6). More on the Florida certificate |
| United Kingdom | If HMRC registers you in the seller's place, under the seller's VAT number, the seller's duty from before the transfer to file returns and pay VAT becomes yours | The rule applies only where you are registered in place of the seller, on an application made by both of you (reg. 6(1) and 6(3)) | VAT Regulations 1995, reg. 6 |
| Spain | Whoever takes over a business is jointly liable for the tax debts the seller ran up in it. There are exceptions, for example a purchase in insolvency proceedings | With the seller's consent, ask the tax office for a certificate of the tax debts tied to the business; your liability is then limited to what it lists. The office has three months to issue it; if it does not, you are released from this liability | Ley General Tributaria, arts 42.1.c and 175.2 |
These debts usually do not show up in a company register search. You find them by knowing the local rule and asking for the right paper before the deposit. Some debts appear in no register at all, such as money owed to suppliers. Those you can only ask about, in writing.
Five questions to ask any due diligence provider
- Which sources will you read, and will each line show its source and date? Without that, you cannot tell a finding from an opinion.
- Whose rules will you apply? The debts, the lease and the permits follow the law of the place where the business is.
- Will you read the seller's own papers, or only public records? Public records do not show whether the takings are real. That needs the tax returns or the filed accounts.
- Will you contact the seller or the broker? You may want your answers before anyone but you speaks to the seller.
- What will the report leave out, and will it say so in writing? Every check has limits. A useful report names them.
Be careful with any promise that a business owes nothing. A register shows what was recorded. It cannot show a debt that was never recorded.
How our two reports answer those questions
Here are the answers for Provenance Diligence, from our pricing page:
- Sources: "Every line in the report carries its source and the date it was taken."
- Local rules: "€550: from the public records, which debts can follow the business under the rules that apply where it is, and what decides whether the permit and lease pass to you".
- The seller's papers: The €950 report reads the seller's own papers, tax returns or the accounts the company filed, and sets the seller's figures against them. You send the papers first. You pay for the €950 report only after we have read them and they are enough for the report.
- The seller: We do not contact the seller. The €550 report works from the public records; the €950 report also reads the seller's papers that you send us.
- Limits: "What you do not learn: whether the takings match the seller's own papers; at €550 we do not read them."
- Language: "Your report comes in your language: any of 181, chosen on the order form."
Start with the listing, then decide
- The listing. With the free extension: "Open a business-for-sale listing and press “Download PDF”. You get a report on the 12 things a check of the business needs: what the listing says about each, and which ones it does not say." Get the free extension.
- Your account. "Everything about your check, from the request to the report, lives in your account." Create my account.
- The check. The €550 report reads the public records: Start for €550. The €950 report adds the seller's papers: Start for €950. "You pay only if we take it on." Within 12 weeks of receiving the €550 report, pay the price difference for the €950 report: what you paid counts in full.
Sources
- GOV.UK, Get information about a company (Companies House) (retrieved 27 October 2026)
- GOV.UK, Search the bankruptcy and insolvency register (retrieved 27 October 2026)
- Uniform Commercial Code § 9-307(e), Legal Information Institute, Cornell Law School (retrieved 27 October 2026)
- PACER, Pricing: how fees work (retrieved 27 October 2026)
- Florida Statutes 2026, § 213.758, Transfer of tax liabilities (retrieved 27 October 2026)
- The Value Added Tax Regulations 1995 (SI 1995/2518), regulation 6 (retrieved 27 October 2026)
- Ley 58/2003, General Tributaria, arts 42.1.c and 175.2 (BOE, consolidated text) (retrieved 27 October 2026)