Anchored to UK statute. Last verified 21 June 2026. View source-of-record.

maduediligencechecklist.co.uk

The UK M&A Due Diligence Checklist

Deal structure

Asset-purchase due diligence asks

On an asset purchase the buyer cherry-picks assets and assumed liabilities, but inherits the workforce by operation of TUPE 2006. Diligence shifts emphasis to Schedule VI (employment), Schedule X (real estate landlord consents) and Schedule IV (contract novation). The seller entity retains historic tax, litigation and contingent exposures.

Direct answer

Asset-purchase due diligence emphasises TUPE 2006 employee-transfer consultation, contract novation and assignment consents, landlord-consent letters for leasehold property and the employment-related ELI obligation. Historic tax and litigation stay with the seller entity but uninsured pre-completion liabilities still need indemnity coverage in the asset-purchase agreement.

Items emphasised on asset deals

Schedule IV - Commercial

  • IV.1
    Obtain top-10 customer revenue concentration for the last three years.
    Severity A
  • IV.2
    Test annual customer churn (logo and revenue) over the last three years.
    Severity A
  • IV.4
    Sample top-20 customer contracts for term, renewal, change-of-control and exclusivity.
    Severity A
  • IV.6
    Confirm change-of-control consent requirements in top-customer contracts.
    Severity A
  • IV.12
    Test ARR / NRR / GRR by cohort over the last 24 months.
    Severity A
  • IV.13
    Confirm logo and net-revenue retention against an explicit cohort definition.
    Severity A

Schedule VI - Employment

  • VI.1
    Obtain employee census: headcount, role, location, FT/PT, start date.
    Severity A
  • VI.3
    Confirm right-to-work checks held for every employee and contractor.
    Severity A
  • VI.6
    Identify any current grievance, disciplinary or tribunal claim.
    Severity A
  • VI.7
    Confirm bonus, commission and LTIP arrangements and accrued liabilities.
    Severity A
  • VI.8
    Review EMI option grants, vesting and any accelerated-vesting trigger on the transaction.
    Severity A
  • VI.11
    Confirm DB scheme status (if any): funding position, recovery plan, s.75 debt.
    Severity A
  • VI.14
    Identify any TUPE transfer in or out within the last six years and ELI compliance.[TUPE 2006]
    Severity BAsset-purchase only
  • VI.15
    Confirm TUPE consultation strategy for the proposed transaction (asset deal).[TUPE 2006]
    Severity AAsset-purchase only

Schedule X - Real estate

  • X.1
    Obtain schedule of all freehold and leasehold property held by the group.
    Severity A
  • X.3
    Review each lease: term, break, rent review, alienation, change-of-control.[LTA 1954]
    Severity A
  • X.5
    Obtain landlord consents required for change of control or assignment.
    Severity A
  • X.13
    Review fire-risk assessment and Building Safety Act 2022 compliance where relevant.[BSA 2022]
    Severity A
Reviewed by Oliver Wakefield-Smith, Founder, Digital SignetLast verified 21 June 2026

This page is anchored to UK primary legislation and named regulator guidance only. Not legal advice. Confirm position with your appointed adviser before signing.