Existing user? Sign in
Share your needs with us, get contacted by law firms.
Free. Takes 2 min.
Or refine your search by selecting a city:
Refine your search by selecting a city.
Due diligence is the process of thoroughly investigating and evaluating a business, individual, or asset before entering into a legal or financial transaction. In Illinois, due diligence is most commonly associated with real estate, mergers and acquisitions, business purchases, and investment scenarios. The core purpose is to uncover and assess potential risks, liabilities, and benefits so that informed decisions can be made. In the legal context, due diligence may involve reviewing financial records, corporate structure, compliance with local and federal laws, zoning restrictions, and ongoing litigation. Illinois law does not have a single statute on due diligence, but various legal requirements and standards are imposed in specific contexts to protect both parties in a transaction.
Legal counsel is invaluable during due diligence because even seemingly straightforward transactions can hide complex legal issues. Lawyers are skilled at spotting hidden liabilities and confirming details that laypersons might overlook. Common scenarios where you might need legal help with due diligence in Illinois include:
A lawyer will help create tailored due diligence checklists, coordinate with experts like accountants or inspectors, review and prepare closing documents, and ensure compliance with applicable Illinois and federal laws.
Illinois law impacts the due diligence process in several important ways. The Illinois Business Corporation Act governs disclosures required for the sale and purchase of businesses. The Illinois Human Rights Act may raise compliance issues when investigating employment and discrimination claims. For real estate transactions, the Illinois Residential Real Property Disclosure Act requires sellers to disclose known material defects. Environmental due diligence is guided by both state and federal statutes, overseen in part by the Illinois Environmental Protection Agency. Title searches, zoning reviews, and building code compliance are essential due diligence steps in property transactions, with procedures established by local ordinances and county recorders.
In addition, courts in Illinois expect parties to act in good faith and take reasonable steps to investigate and disclose material information, particularly in business deals. Failure to perform adequate due diligence might result in legal claims like fraud, misrepresentation, or breach of contract.
Due diligence is a comprehensive investigation or audit of a potential investment, purchase, or arrangement to confirm all material facts and identify risks before a transaction occurs.
Due diligence is required whenever a transaction involves significant assets or liabilities, such as business or real estate deals. In some cases, Illinois law mandates specific disclosures or investigations.
Due diligence in real estate includes title searches, property inspections, reviewing zoning and building codes, checking for liens or unpaid taxes, and verifying environmental compliance.
Commonly reviewed documents include financial statements, tax returns, contracts, incorporation documents, employment records, intellectual property registrations, and litigation history.
Typically, the buyer or party seeking information pays for due diligence costs, but payment responsibilities can be negotiated as part of the transaction agreement.
While some research can be done independently, hiring lawyers, accountants, or inspectors is highly recommended to uncover issues you might miss and ensure compliance with Illinois laws.
Yes, transaction agreements often specify a due diligence period. Missing the deadline may impact the ability to renegotiate or withdraw from the deal without penalty.
Risks include uncovering hidden debts, legal claims, or regulatory violations after the transaction, which could result in financial loss or legal action for breach of contract or fraud.
Environmental concerns are significant in Illinois, particularly for industrial or commercial properties. Phase I Environmental Site Assessments and reviews of Illinois EPA records are common steps.
Work with qualified legal professionals, maintain thorough documentation, negotiate for access to necessary records, and clarify the scope and timeline of your due diligence investigation in writing.
For further information and assistance with due diligence in Illinois, consider the following resources:
If you require legal assistance with due diligence in Illinois, begin by outlining your goals and gathering available documents. Seek a qualified attorney with experience in the relevant area, whether business, real estate, or investments. Schedule a consultation to discuss your specific needs, and ask for a tailored due diligence checklist. If your matter is time sensitive, clarify the timeline and deadlines with your legal team. Remember that thorough due diligence is critical for protecting your interests and making informed decisions in any significant transaction.
