Run due diligence on a company to buy

When to use

Someone proposes acquiring a Latvian company — its shares, its assets, or its team — and a decision must be made on facts, not on the seller's deck. Not for a routine yearly check on a company you already deal with — use company.registry-watch. Not for researching a stranger company with no deal attached — use agents.research-company. Not for valuing your own company for investors — use growth.valuation-xray.

Before you start

• The owner has named the target, the deal shape (shares vs assets) and a price ceiling.
• The purpose is decided — it decides which checks are blocking (a licence deal dies on licence status; a team deal barely cares about the balance sheet).
• If the seller will share internal documents, an NDA is signed first — use documents.nda. The agent never signs it.

What a run requires2

The trail10 steps

1. S1

   Fix the scopeownerneeds approval · owner

   Approval · S1 · owner — the run stops until a named person records the decision

   Owner states: target, shares or assets, purpose, price ceiling, and the three questions the report must answer.

   Done when the scope is written in the task (bc tasks add) and the agent works from it.

2. S2

   Pull the registry pictureagent

   From ur.gov.lv and the company-intel module: registration data, board members with start dates, share capital, beneficial owners, registered encumbrances and pledges.

   Done when every field has a date and a source; anything changed in the last 12 months is flagged.

3. S3

   Pull the financial recordagent

   Last three filed annual reports from VID's report register; compare revenue, profit, equity and debts year over year.

   Done when three years of figures sit in one table, each with the report's filing date. ⚠ verify whether reports are filed or overdue — check the filing status on vid.gov.lv, do not assume.

4. S4

   Check tax standingagent

   Query the VID tax debtor list and the VAT payer register for the target's registration number.

   Done when the tax-debt status and VAT status on the date of checking are recorded, with the date.

   ⛔ A clean debtor list today says nothing about unpaid declarations — record the date, and re-check before signing.

5. S5

   Check the people and the licencesagent

   Cross-check board and beneficial owners against other companies they hold; check whether the business needs a licence or permit and whether it is active.

   Done when each person and each licence has a one-line status with source. ⚠ verify the licence list for the target's industry — check likumi.lv or the sector regulator, not the seller's word.

6. S6

   Map what transfers and what does notagent

   For a share deal: everything transfers, including liabilities. For an asset deal: list every contract, employee, IP right and lease that must be reassigned or novated, and who must consent.

   Done when a two-column list exists: transfers automatically / needs consent or new contract.

7. S7

   Draft the valuation summaryagent

   Using the value module: range based on filed figures, the purpose premium (why this target and not a hiring ad), and the price ceiling comparison.

   Done when the summary states a range, the ceiling, and the gap between them.

8. S8

   Write the red-flag reportagent

   One page: each red flag, its severity (deal-blocking / price-changing / acceptable), and the source. No claim without a source; unknowns are listed as unknown, not smoothed over.

   Done when every line has a source or is marked "unverified — needs seller documents".

9. S9

   Decideownerneeds approval · owner

   Approval · S9 · owner — the run stops until a named person records the decision

   Agent presents the report and the red flags. Owner chooses: proceed to offer, renegotiate on the red flags, or walk away.

   Done when a decision record exists (management.decision-record) naming the choice, the date, and who decided.

10. S10

    Record and hand offagent

    File the report and evidence pack against the task; if proceeding, hand off to sales.check-new-customer logic in reverse — the seller is now the counterparty — and set a re-check of tax debt for the week before signing.

    Done when the report and evidence pack are filed against the task and, if proceeding, the tax-debt re-check is set for the week before signing.

Checks — how we know it worked

• Every factual claim in the report names its primary source and the date it was read.
• Registry board list matches what the seller claims; any mismatch is in the red flags, not a footnote.
• The share-vs-asset list in S6 covers every contract the purpose of the deal depends on.
• The decision record exists and names a person, a date and a choice.

If it goes wrong

What each step leaves behind

1. S1the scope is written in the task (bc tasks add) and the agent works from it.
2. S2every field has a date and a source; anything changed in the last 12 months is flagged.
3. S3three years of figures sit in one table, each with the report's filing date. ⚠ verify whether reports are filed or overdue — check the filing status on vid.gov.lv, do not assume.
4. S4the tax-debt status and VAT status on the date of checking are recorded, with the date.
5. S5each person and each licence has a one-line status with source. ⚠ verify the licence list for the target's industry — check likumi.lv or the sector regulator, not the seller's word.
6. S6a two-column list exists: transfers automatically / needs consent or new contract.
7. S7the summary states a range, the ceiling, and the gap between them.
8. S8every line has a source or is marked "unverified — needs seller documents".
9. S9a decision record exists (management.decision-record) naming the choice, the date, and who decided.
10. S10the report and evidence pack are filed against the task and, if proceeding, the tax-debt re-check is set for the week before signing.

Evidence to keep

Registry extract with date · report figures with filing dates · VID debt and VAT check with date · the S6 transfer list · the red-flag report · the decision record id · the seller documents received, if any.

How this playbook improves

After every 3 runs ask: how many days from ask to decision, and which wait dominated? Did any red flag surface only after signing — and which check should have caught it? Did the share/asset split in S6 match what actually had to be reassigned? A new version changes the missed check or the slowest step, and says so in its change note.