Can a Due Diligence Report be e-signed?

Yes. Electronic signatures generally are valid under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided the parties consent, intent is demonstrable, and the record is retained in reproducible form.

When is notarization required?

Not all Due Diligence Reports require notarization. Specific attached affidavits, deeds, or power-of-attorney documents may need notarization or witnesses under state law; verify requirements with the relevant Secretary of State or notary statutes.

How should PHI be protected?

If the report includes protected health information, ensure workflows satisfy HIPAA rules and execute a Business Associate Agreement where required. Limit access, encrypt data at rest and in transit, and retain records in accordance with 45 CFR §164.530(j).

What makes an e-signature enforceable?

An e-signature is enforceable when intent is demonstrable, parties consent to electronic transactions, signature attribution is clear, and the record is retained and reproducible, aligning with ESIGN and UETA criteria.

How do you correct errors after signing?

Corrections require an explicit amendment or corrected exhibit signed by all parties, or re-execution of the amended report. Preserve change history, retain prior versions for audit trails, and document the correction reason for regulatory or contractual scrutiny.

Are remote notarizations acceptable?

Many states permit Remote Online Notarization with identity-proofing and audio-video recording requirements; rules vary. Confirm state RON status and follow applicable recordkeeping and technology standards before relying on a remote notarization.

Due Diligence Report

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DUE DILIGENCE REPORT

Recitals

WHEREAS, Client Name: engages Consultant Name: to perform due diligence in connection with the Proposed Transaction described below.

WHEREAS, the purpose of this Due Diligence Report is to document the scope, findings, material risks, and recommendations arising from Consultant's review of the Target Entity and related materials for Client in connection with the Proposed Transaction.

WHEREAS, Consultant's findings are based upon documents provided and interviews conducted during the engagement period and are subject to the assumptions, limitations and qualifications set forth in this Report.

Engagement Details

Target Entity Client Contact Engagement Start Date Report Date

Scope of Work

The Consultant shall perform the due diligence activities described below, which constitute the agreed Scope of Work. The scope may include document review, interviews, site visits, data analysis, and preparation of this Report. Consultant will not provide legal or tax advice unless separately engaged to do so.

Documents Reviewed

Please indicate which categories of documents were provided and reviewed during the engagement.

Documents Financial statements and audit reports Material contracts and agreements Corporate records and governance documents Pending or threatened litigation and legal opinions Employment, benefit and compensation records Other Documents

Executive Summary

Provide a concise summary of material findings, areas of concern, and overall recommendation regarding the Proposed Transaction.

Findings

Financial Findings Legal & Regulatory Findings Operational Findings Compliance & Environmental Findings

Risk Assessment & Recommendations

Summarize key risks identified, likelihood and impact ratings, and prioritized recommendations for mitigation.

Recommendations

Payment Terms

Client agrees to pay Consultant the fees described below in consideration for the due diligence services provided under this engagement.

Fee Amount Payment Schedule Late Fee

Term and Termination

This engagement begins on Start Date: and will continue until End Date: unless earlier terminated as provided below.

Either party may terminate this engagement for convenience upon written notice to the other party delivered not less than Notice Period (days): prior to the effective termination date. Termination shall not relieve Client of its obligation to pay fees for services performed and expenses incurred prior to termination.

Confidentiality

Consultant and Client each acknowledge that in the course of performance they may receive or have access to non-public, confidential or proprietary information of the other party. Each party agrees to hold such information in confidence and not to disclose it to third parties except as required by law or with the other party’s prior written consent. Consultant will use confidential information solely for the purpose of performing the services described in this Report. This obligation survives termination of the engagement for a period of three (3) years, except that trade secret information will be protected for as long as it qualifies as a trade secret under applicable law.

Governing Law

This Report and the engagement shall be governed by and construed in accordance with the laws of Jurisdiction: without regard to conflict of laws principles.

Limitations and Disclaimers

The conclusions set forth in this Report are based on the documents, representations and information made available to Consultant as of the date hereof. Consultant has not conducted an audit nor verified independently all information provided. Consultant makes no warranty, express or implied, and disclaims liability for any loss arising from reliance on the Report, except to the extent caused by Consultant's gross negligence or willful misconduct. Client acknowledges that unobserved or undisclosed matters may materially affect conclusions.

Entire Agreement

This Report, together with any engagement letter executed by the parties, constitutes the entire agreement between Consultant and Client with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written. Any amendment or waiver must be in writing and signed by both parties.

Preparer Certification

The undersigned certifies that, to the best of their knowledge after reasonable inquiry, the statements and findings contained in this Report are true, accurate and complete as of the Report Date, subject to the limitations set forth herein.

Preparer Name Preparer Title/Role Preparer Contact Information

Client Printed Name:

Client Signature:

Date:

Consultant Printed Name:

Consultant Signature:

Date:

What a Due Diligence Report Is and why it matters

A Due Diligence Report documents the factual, legal, financial, operational, and compliance-related findings collected during an investigation of a business, transaction, property, or counterparty. Typical reports summarize background research, financial statements, contracts, regulatory filings, litigation and tax exposures, intellectual property status, and key operational risks. The report records source documents, analysis methods, outstanding issues, and recommended mitigations or conditions to closing. Organizations use it to inform investment decisions, mergers and acquisitions, lending, vendor onboarding, or regulatory compliance reviews and to create an audit trail of investigative steps.

Why a clear Due Diligence Report reduces uncertainty

A Due Diligence Report clarifies material risks, supports valuation assumptions, documents compliance gaps, and provides decision-makers with evidence to accept, renegotiate, or terminate a transaction. It also creates a record useful for regulators, auditors, and legal defense.

Who prepares and relies on these reports

Typical roles that request, prepare, or review Due Diligence Reports include internal legal, finance, and operations teams, external counsel, and lenders.

Corporate development teams standardized document checklists, consolidated source files, and reduced reviewer time for investor due diligence.
Lenders and underwriters evaluating borrower creditworthiness, collateral quality, and covenant compliance.
Private equity, investors, and acquirers documenting exposures prior to closing.

Smaller companies, compliance officers, insurance carriers, and government reviewers may also request tailored due diligence depending on industry and transaction size.

Typical report authors and approvers

Prepared By

Senior associate or external analyst who conducts document review, interviews key personnel, and compiles findings. Typically responsible for source verification, risk scoring, and drafting sections on financials, contracts, and regulatory compliance for review by senior counsel or deal team.

Approver

C-level executive, general counsel, or credit committee member who reviews the report, weighs identified risks against strategic objectives, and signs off on recommended actions. Approval often conditions final transaction terms, indemnities, or escrow arrangements.

Core sections to include in a professional report

A professional Due Diligence Report organizes findings into standard sections so reviewers can quickly evaluate risks, verify sources, and justify transaction decisions.

Executive Summary

Concise overview of material findings, key risks, and recommended deal points. Should state transaction context, valuation impact, critical unresolved issues, and any conditions recommended for closing to inform senior decision-makers.

Scope & Methodology

Define parties, timeframe, data sources, and methods used for verification including third-party confirmations, interviews, and database searches. Explicit scope reduces disputes about omitted issues and clarifies the limits of the review.

Financial Analysis

Detailed review of historical financials, adjustments, working capital, cashflow forecasts, and accounting policies. Reconcile bank records and identify one-time items, off-balance-sheet liabilities, and contingent exposures affecting valuation.

Legal & Contract Review

List material agreements, assignability, change-of-control provisions, indemnities, pending litigations, and restrictions. Highlight clauses that could impair operations or require consent, and note missing or unsigned counterparts.

Regulatory & Compliance

Summarize licenses, permits, regulatory filings, ongoing investigations, data privacy obligations, and industry-specific compliance matters such as HIPAA or environmental permits. Identify corrective steps and potential agency penalties.

Risk Matrix

Prioritize risks by likelihood and impact, estimate potential financial exposure, and propose mitigation measures, escrow amounts, or contract representations and warranties to address residual risk before closing.

Stepwise workflow to prepare a complete report

Follow a structured sequence to collect documents, verify facts, analyze findings, and produce a clear, referenced Due Diligence Report.

01

Gather Documents: Collect contracts, financials, licenses, and filings
02

Verify Identities: Confirm parties via ID, corporate filings, and ownership records
03

Analyze Risks: Assess financial, legal, regulatory, tax, and operational exposures
04

Draft Report: Summarize findings, cite sources, and recommend actions

Configure an efficient online workflow

Basic workflow settings streamline collection, verification, routing, and archival for Due Diligence Reports across stakeholders.

Field	Configuration
Magic Fields	Enable automatic data extraction from PDFs
Conditional Fields	Show fields only when thresholds are met
Signer Authentication	Choose Email, SMS, or KBA per signer
Bulk Send	Use for standardized reports to many recipients

Where to send the completed report

Prepare routing instructions and identify recipients, filing destinations, and storage locations when finalizing the Due Diligence Report.

To Counsel: Send PDF with source documents and appendices
To Lender: Provide redacted financials, summary, and risk matrix
To Regulators: Submit required reports per regulatory instructions
To Data Room: Upload signed report and indexed source files

Delivery formats and integration considerations

Consider integrations, file formats, and authentication when choosing eSubmission channels for the Due Diligence Report.

File Formats: PDF, DOCX, and searchable PDF
Integrations: Salesforce, NetSuite, Google Workspace, Box
Authentication: Email, SMS code, and optional KBA

How eSignature vendors compare for executing Due Diligence Reports

Pricing and feature differences among eSignature vendors affect the cost and compliance of executing Due Diligence Reports.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes

Essential data elements to collect

Entity Legal Name: Full legal name on government filings

Tax ID / EIN: Employer Identification Number (EIN) or TIN

Primary Contact: Name, title, phone, and email

Financial Statements: Most recent three years' audited or reviewed

Material Contracts: Copies of key agreements and amendments

Regulatory Filings: Licenses, permits, and compliance history

Common preparation pitfalls to avoid

Omitting third-party verification such as auditor letters, bank confirmations, or UCC searches results in incomplete risk assessment and unforeseen liabilities.
Relying on unaudited or stale financial statements without reconciling recent transactions distorts valuation and covenant analysis.
Failing to identify pending litigation, regulatory investigations, or environmental liabilities can create post-closing exposure and significant financial impact.
Insufficient chain-of-custody for documents or unsigned worksheets undermines evidentiary value in audits or disputes and increases litigation risk.

Consequences of inaccurate or incomplete reports

Tax Filing Penalties: Incorrect tax info can trigger IRC §6721 penalties

Contract Rescission: Material misstatements may void agreement

Lender Remedies: Loan denial or covenant default risk

Regulatory Fines: Enforcement actions for compliance failures

Indemnity Claims: Post-closing liabilities and cost shifts

Reputational Damage: Loss of trust, client and market impact

Typical timelines and response windows

Key deadlines include document requests, response windows, and closing milestones tied to the transaction schedule.

Document Request:

Typically 5–10 business days to respond

Follow-Up:

Allow 3–5 business days for clarifications

External Confirmations:

Banks and auditors may need 7–14 days

Closing Conditions:

Remedial items must be cleared before closing

Regulatory Filings:

Agency deadlines depend on filing type and jurisdiction

Practical examples from real organizations

Real examples show how Due Diligence Reports support remote closings, compliance, and integration for varied industries.

Optica Ventures

Optica Ventures standardized document checklists, consolidated source files, and reduced reviewer time for investor due diligence.

Resulted in faster decision cycles.
They reported that standardized reports improved transparency for investors and reduced time spent reconciling documents, supporting clearer negotiation points and smoother closings without repeated requests for missing materials.

Martin Properties

Martin Properties replaced manual checklists and paper files with electronic due diligence reports across its portfolio acquisitions.

Enabled fully remote closings and faster approvals.
They noted end-to-end electronic processes allowed secure signature capture, mobile execution, and consistent compliance documentation, reducing turnaround time and easing coordination among stakeholders in different locations.

How a Due Diligence Report differs from related documents

Compare Due Diligence Reports with adjacent document types to clarify scope, depth, and intended recipients.

Criteria	Due Diligence Report	Vendor Risk Assessment	Audit Report
Primary Focus	transaction risk	vendor continuity	financial accuracy
Typical Depth	high	medium	high
Primary Recipient	buyers/investors	procurement teams	auditors/regulators
Verification	contracts and filings	questionnaires	audit evidence

Frequently asked questions about Due Diligence Reports

Answers to common questions about execution, e-signatures, notarization, PHI, and recordkeeping for Due Diligence Reports.

Need help? Contact support

Can a Due Diligence Report be e-signed?
Yes. Electronic signatures generally are valid under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided the parties consent, intent is demonstrable, and the record is retained in reproducible form.
When is notarization required?
Not all Due Diligence Reports require notarization. Specific attached affidavits, deeds, or power-of-attorney documents may need notarization or witnesses under state law; verify requirements with the relevant Secretary of State or notary statutes.
How should PHI be protected?
If the report includes protected health information, ensure workflows satisfy HIPAA rules and execute a Business Associate Agreement where required. Limit access, encrypt data at rest and in transit, and retain records in accordance with 45 CFR §164.530(j).
What makes an e-signature enforceable?
An e-signature is enforceable when intent is demonstrable, parties consent to electronic transactions, signature attribution is clear, and the record is retained and reproducible, aligning with ESIGN and UETA criteria.
How do you correct errors after signing?
Corrections require an explicit amendment or corrected exhibit signed by all parties, or re-execution of the amended report. Preserve change history, retain prior versions for audit trails, and document the correction reason for regulatory or contractual scrutiny.
Are remote notarizations acceptable?
Many states permit Remote Online Notarization with identity-proofing and audio-video recording requirements; rules vary. Confirm state RON status and follow applicable recordkeeping and technology standards before relying on a remote notarization.

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