Due Diligence Services: Corporate, Legal & Compliance

Due diligence refers to the process of assessing a particular company or business before performing some kind of major transaction. It entails more than receiving a Compliance Report from someone else as part of the transaction. When you go through our due diligence review service, you get access to all sorts of corporate documents, including corporate records, financial statements, contracts, property rights and even required compliance reports.

Our high-quality corporate due diligence services enable us to exert greater control over various inconsistencies, potential obligations and likely legal or regulatory risks. The nature of the business transaction, the company’s structure and what’s known about the prospective business partner will also determine how we customise the scope of our due diligence review.

Due diligence is an ordered examination of relevant facts and documents to be undertaken before a significant business transaction. This includes due diligence performed at the pre-process stage for an investment, acquisition, merger, reorganization, partnership, etc.

The goal of business due diligence is to provide an overall understanding of the corporation, such as ownership details, contracts, legal records, licenses, litigation history, compliance issues, etc., which might have potential risk factor on transaction or further cooperation.

Due diligence gives the chance to understand the operational and legal status of the company before entering a deal and find information that cannot be found from financial statements or even from talking with management.

A Proper review can help you:

• Find out legal and regulatory threats

• Confirm corporate ownership and structure

• Examine statutory documents

• Check crucial contracts

• Reveal compliance obligations

• Inspect charges and liabilities

• Revise licenses and permits

• Identify discrepancies in the company’s records

• Support investments and acquisitions

The scope of corporate due diligence depends on the number of transactions and the level of review required. On the whole, the task is to analyze the corporate identity, ownership, management, and corporate documents of the company.

The scope may include the examination of:

• Certificate of Incorporation

• Memorandum and Articles of Association

• MCA master data

• History of share capital

• List of directors

• Board of directors and general meeting resolutions

• Legal documents

• Annual financial statements

• Pledges registered with Companies House

• Contracts with partners

• Key contracts

• Licenses

• Court cases in progress, if any

• Compliance issues

Compliance due diligence is the assessment of whether a business complies with its regulatory obligations. It helps to point out which documents are missing, overdue, and not submitted in time.

The review encompasses both filed documents and compliance records. If there are any violations, it is necessary to take the steps and fix the issues before the transaction is completed.

Legal due diligence services assess the legal information related to the transaction or business in question. The scope of the review will depend on what is involved in the company and the transaction in hand.

A legal due diligence review may assess:

• Corporate documents

• Dominance and shareholding

• Essential contracts

• HR documents

• Intellectual property

• Licenses and permits

• Shares and pledges

• Court judicial information

• Legislative obligations

• Contracts with main parties

The goal is to detect the legal risks related to the transaction.

Legal compliance review implies investigating if a company’s documents meet the relevant restrictions defined in the initial contracts.

Thus, experts can check out the company’s records and see how they correlate with the law and see what corrections have to be made. It is impossible to substitute a legal compliance review with specific legal advice where the particular dispute does require a specific legal evaluation.

The type of documents will be driven by the scope of the review. Some required documents may be:

• Certificate of Incorporation

• Memorandum of Association and Articles of Association

• MCA filings

• Financial statements

• Annual returns

• Details of shareholders

• Information on directors

• Minutes of board and other meetings

• Statutory registers

• Important contracts

• Loan and charge documents

• Certifications and registrations

• Regulatory approvals

• Lawsuits

• Tax documents and compliance records in some cases

There are several steps that you need to follow to complete corporate due diligence. Given below are the details:

Step 1: Understanding the Scope

First you need a clear understanding of the transaction being proposed and identifying the relevant areas to be examined.

Step 2: Collect Records

Then you need the corporate, legal, and compliance documents and records relevant to your business.

Step 3: Verification of Information

Review the available records and compare the information among the documents, as appropriate, and report the corresponding findings.

Step 4: Identifying Risks

You need to keep a record of the possible discrepancies, missing information, outstanding compliance issues, and other issues.

Step 5: Recording Findings

In this step, the findings are put into order based on their importance. You can take help from a due diligence consultant to collate all the findings.

Step 6: Discussing Remedial Actions

At last, you can evaluate the issues raised and understand whether you would like to provide further documents or clarifications before proceeding with your transaction.

The timeline depends on the size of your business, the number of records, and the scope of review.

The cost of Due Diligence depends on the scope of the business, size, number of documents required, and complexity of the transactions.

Note: Apart from the professional fee you may need to pay, government charges that may vary. There is no universal government fee for every due diligence. For the latest fees, contact Companyregister.co.in

Once the research is completed, the report includes the results of the process and analysis of reviewed documents. Findings in the report may include known dangers, data omitted, gaps in compliance and issues that require more action.

The report should be kept along with the other documents reviewed. The report can serve as a reference point when negotiating the terms of the deal or deciding whether it is necessary to conduct further research.

There is no universal validity period for a due diligence report. Its findings are related to the information and records reviewed for the specific period covered.

If the company has made changes after the review, then you will need to update the assessment. The conclusions depend on the specifics of the situation described in the report.

A thorough renewal is not needed since due diligence is done for each case in most of the cases. However, a new review might be required in case a deal is substantially delayed or there are changes in important facts or circumstances.

When Should a Fresh Review Be Performed?

After the ownership, directors, finances, ongoing lawsuits, agreements, expiry of required licenses, or other important business changes occur, it is advisable to consider conducting a new due diligence.

A review will be able to reveal issues requiring corrective actions. Depending on the results of the review, there might be a need to either correct or file any corporate documents or changes in MCA.

In situations that require specialised advice from a lawyer or regulator, obtaining such comments before the steps are taken is necessary.

There are some common risks that you need to be aware of. Given below are the possible risk factors, they include:

• Missing legal documents

• Missed deadlines for filing returns

• Inconsistent information about the firm

• Unregistered or wrongly recorded encumbrances

• Incomplete ownership documentation

• Expired regulations

• Lost agreements

• Unresolved violations

• Inadequate disclosures

• Conflicting information between documents

We provide help to businesses from Delhi, Maharashtra, Karnataka, Gujarat, Tamil Nadu, Telangana, Uttar Pradesh, Haryana, Rajasthan, Punjab, West Bengal and others.

Although corporate regulations are determined by federal laws, the review may capture necessary registrations, permits and rules at the state level, considering the applications of various businesses.

We help companies in the following sectors:

• Manufacturing

• Information technology

• Healthcare

• Education

• E-commerce

• Trade

• Transport

• Real estate rental

• Construction

• Consulting

• Professional services

The scope of our work can be increased if your industry requires more licenses or has specific requirements.

Our experts at Companyregister.co.in offer you a systematic approach to any corporate, legal and compliance review you need to undergo before carrying out any important business transaction. We can assist you in arranging documents, searching for potential gaps, and preparing results based on the agreed terms.

We can also help coordinate related ROC Records, compliance reports, and FEMA requirements where it is necessary for carrying out the whole transaction review.