What is a due diligence checklist for Swiss SME acquisitions?

Due diligence (DD) is the buyer's systematic investigation of a target company before closing. For Swiss SMEs, the process typically takes 4-8 weeks and covers financial, legal, tax, commercial, and operational dimensions. Preparation is the seller's biggest lever. ### Technical Explanation #### 1. Financial Due Diligence * Audited financial statements (3-5 years) * Quality of Earnings (QoE) analysis: normalized EBITDA bridge * Working capital analysis: NWC trend and seasonality * CapEx requirements: maintenance vs. growth * Debt schedule and off-balance-sheet obligations * Hidden reserves identification and quantification * Cash flow analysis and forecasting reliability #### 2. Legal Due Diligence * Corporate documents: Handelsregister extract, articles, shareholder agreements * Material contracts: customer, supplier, lease, employment * Litigation: pending and threatened claims * IP: patents, trademarks, trade secrets, software licenses * Regulatory compliance: industry-specific permits and certifications * Real estate: Grundbuch entries, zoning, environmental assessments #### 3. Tax Due Diligence (Swiss-Specific) * Tax ruling history and open assessments * Transfer pricing documentation * Indirect partial liquidation (IPL) risk assessment * Cantonal tax status and inter-cantonal allocation * VAT compliance and import duties * Withholding tax on prior distributions #### 4. Commercial Due Diligence * Customer concentration and churn analysis * Revenue quality: recurring vs. project-based * Market position and competitive landscape * Pipeline and backlog analysis * Key customer interviews (if seller permits) #### 5. Operational Due Diligence * Key person dependency assessment * Employee analysis: tenure, costs, critical roles * Technology and IT infrastructure * Process documentation maturity * ESG compliance and sustainability