Due diligence can uncover unknown information, so thorough due diligence is important regardless of the transacting parties’ relationship, goodwill, or trust.
When considering acquiring another nonprofit, there are two types of acquisitions that are typically considered “ an asset purchase and a merger transaction. Several factors, including due diligence, payment of consideration, assumption of liability, assignment of contracts (including endowment agreements), existence of planned gifts, future operating goals and applicable state and federal laws, should be considered in determining the structure of the potential transaction.
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